Beebe chairman says CEO departure about new ideas, moving more quickly

Herbert: No improprieties – Fried served well; transition could have been smoother
April 12, 2019

Beebe Healthcare Chairman Dave Herbert, over the past month, gathered members of the board for at least two special meetings. Those meetings culminated in the termination of Jeff Fried’s employment as hospital president and chief executive officer, a position he held for the past 24 years.

Fried’s sudden departure surprised the community and raised questions. Beebe’s public relations department announced his departure in a press release. A few days later, Fried and his wife, Sherry, took a final walk down the administrative corridor of Beebe as he left Beebe’s main campus facility in Lewes for the last time as chief executive. Hundreds of Beebe employees lined the corridor and expressed their appreciation for his leadership.

Herbert said a national search has begun to find a replacement for Fried. “We’ve put out requests for proposals from three firms we’re considering to help with the search. We’re told the whole process should take six or seven months. Hopefully, we will hire him or her by the end of this year.”

In a recent interview, Herbert was asked whether, reflecting on the events of the past couple weeks, he would have changed anything.

“I wish that I could have changed the approach - that it could have happened differently. There were absolutely no improprieties on Jeff’s part. Jeff was a dedicated champion for Beebe and did nothing wrong. He served the organization in a great manner, and we are grateful for his leadership. The board absolutely wanted Jeff to leave with dignity, honor and respect. We still do and will do everything we can to make that a reality.”

No precipitating incident

Herbert said there was no precipitating incident leading the board to seek Fried’s termination. “It might have appeared rapid, but it was not. I, as board chair, have had several discussions with Jeff over the past few months.” He said it would be inappropriate to comment on whether Fried had an opportunity to address the board before a vote was taken, what the results of the board vote were, and whether all members of the board were present when the vote was taken.

Fried said he was not present when the vote was taken, nor was he given an opportunity to address the board. “I think the reason for their action was that the board wanted to go in a different direction with a different leader. Clearly they reached a point in time when they felt different leadership was needed to support the board's vision,” Fried said.

What’s next for Jeff Fried? “I’ve always wanted to play in the NBA, but if that doesn’t work, I’m looking at other options,” he said. “My first priorities will be Sherry, my family and friends, and doing what I can to serve others in the community. I’m proud of what’s been accomplished at Beebe during my time there – all my great associations with so many good people. But I know there’s a strong foundation and a strong team at Beebe in place to continue to move forward.”

Jan McCarty, a former Beebe Healthcare chairperson, echoed Herbert’s thoughts about Fried. “Jeff Fried has shown outstanding leadership over 24-plus years. I think his vision – with the support of the executive team and the board – to take healthcare to our patients outside of our Lewes campus has been a real master stroke. And the introduction of robotics surgery? That in large part is due to Jeff’s perseverance and vision.”

McCarty said Fried put together one of the best executive teams she has seen in Beebe’s history. “And I have great confidence in Rick Schaffner as interim CEO. Beebe is in good hands, and our mission won't waver. But Jeff will be missed by many.”

Herbert said Beebe’s $200 million expansion plans are in place and moving forward as planned. “We want to propel the organization forward more quickly. We are looking for new ideas, creative thinking. Timing is important. Healthcare costs as we know them are unsustainable for the nation, for Medicare, for businesses, for all of us. All the mergers we’re seeing across the country are resulting from Medicare squeezing healthcare systems on reimbursements and reductions in remuneration. We will never see higher remuneration from Medicare than we’re seeing now. It’s all resulting in pressure to reduce costs and improve value. We are at an inflection point. Healthcare has to change.”

Herbert said Beebe’s board wants to be sure the organization is employing processes and techniques to get Beebe to the next generation of care. “We need to move at a rate that makes us competitive with other hospitals. We have to make sure Beebe is an early adopter of proven technologies to see that we’re on top. Not bleeding-edge technologies. We can’t afford that as places like Hopkins and Jefferson can. But it’s important to bring in new experiences and new capabilities which will be different.”

Rick Schaffner, Beebe’s chief operating officer, has been named interim chief executive. “”I’ve worked with Jeff for seven years, and we’ve been friends that whole time. He has never had anything but the best interests of the community in mind. I think it’s time now to expand existing programs, embrace different ideas, evaluate them and see what will work.”

“We have to look at new systems,” said Herbert, “to improve quality and reduce costs. We have to grow to be sustainable centers of excellence. We have to look at things like using nursing school students, second-year medical students and pharmacy students as care coordinators.”

Competition not a concern

Despite Bayhealth’s new healthcare center in Milford and another outpatient facility planned on Route 9 in the next couple of years, as well as the recent announcement of a merger between Peninsula Regional Medical Center in Salisbury and Nanticoke Memorial in Seaford, Herbert said competition wasn’t a factor in the Fried termination. He also said there have been discussions with other healthcare facilities over the past months about the possible advantages and disadvantages to the community and Beebe of possible mergers. But he characterized those discussions as “nothing significant.”

He said Beebe’s board is totally committed to remaining independent. “We are strong and committed to the sense that the best thing for our community is for Beebe to remain independent. We feel we can react to the needs of the community faster if we’re not part of a larger organization, but only if we can provide higher-quality services and the best value.

“I think we can achieve these things. I know we can achieve these things,” said Herbert. “We’re going to beat them at their own game – we’re going to be better by ourselves than being combined with others. As we look ahead, it is important to focus on leading the organization to a higher-performing future. We must focus on the future and moving the organization ahead.”