Analyst: Next University Hospitals CEO Will Face Major Hurdles

The retirement of University Hospitals CEO Thomas Zenty in 2021 will come as the regional health care provider tries to navigate a changing healthcare industry.

Zenty took over UH in 2003 and expanded the system from three to 18 hospitals during his two decades at the helm.

But, according to Tom Campanella, director of the Health Care MBA program at Baldwin Wallace University, there’s major change stirring in the industry.

“Every sector has faced disruption, like the auto industry back in the 80s,” Campanella said. “The banking industry, the steel industry, every sector has gone through it and in many ways the hospital sector or the healthcare sector has been sort of late to the game.”

But change is coming to hospitals now, too.

Between 2005 and 2014, there was a 6.6 percent decrease in the number of hospitalizations nationwide, according to the federal government’s Agency for Healthcare Research and Quality.

Campanella said that trend is likely to continue with the growing use of telehealth and in-home care and with decreased payments from Medicare and Medicaid.

“When you think about it, in the outpatient arena and home setting, hospitals face many more competitors,” said Campanella.

There’s also more pressure for transparency on pricing. Hospitals, with the large fixed cost of all those beds and facilities, are at a disadvantage on pricing, according to Campanella.

“Some hospitals will be closing,” Campanella said. “The services on the inpatient side will be limited to certain services because the demand just isn’t there anymore and there will probably be consolidation in other areas.”

Zenty announced his retirement as CEO this week, and a replacement won’t take over until 2021, when his contract expires. Campanella said allowing enough time for a smooth transition to next CEO is a good plan for UH, considering the challenges that lay ahead.