Scripps Health to adopt regional CEO model in effort to trim $30M in corporate costs: 4 things to know

San Diego-based Scripps Health will eliminate the CEO position in its four hospitals in favor of two regional CEOs and another in charge of ancillary services.

Here are four things to know about the changes at Scripps.

1. A new CEO for the northern region will oversee San Diego-based Scripps Green Hospital, Scripps Memorial Hospital Encinitas (Calif.) and Scripps Memorial Hospital La Jolla (Calif.). The CEO of the southern region will supervise Scripps Mercy Hospital Chula Vista (Calif.) and Scripps Mercy Hospital San Diego, the same hospital with two distinct campuses. Chief operations executives will be in charge of day-to-day operations of the hospitals.

2. In addition to the change in leadership structure, Scripps Health plans to implement corporate services reductions with the aim of lowering costs by $30 million. A joint leadership dyad model will be established between hospital administrators and physician leaders to align the objectives of both groups.

3. The reorganization comes as Scripps failed to achieve its operating budget last fiscal year for the first time in 15 years. The changes are set to begin in the next 30 to 60 days.

4. "Scripps remains one of the strongest systems in California. But given reimbursement changes for government sponsored patients, potential elimination of the mandatory purchase of health insurance and the many other regulations pushed on hospitals - plus the consolidation of the commercial insurance market, it's clear we will need to change proactively or we will certainly have to change down the road reactively," said Chris Van Gorder, CEO of Scripps Health. "We choose to be proactive."

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