Nearly every CEO taking over a struggling organization confronts the same question, Fortune reported Aug. 31: How much time do they get to turn things around?
Research suggests immediate transformation is unrealistic, Fortune reported. Spencer Stuart’s research has described the first year of a new CEO’s tenure as a “launch period,” when a leader diagnoses inherited problems and sets priorities. The second year becomes a period of “calibration,” when boards look for early movement in metrics like operating performance. By around year three, those early decisions should increasingly show up in revenue, margins and returns. McKinsey research cited by Fortune found that about half of a transformation’s value tends to come to fruition in the first 18 months, with the rest arriving later.
“A turnaround does not have to be complete for a leader to make the case for more time,” Fortune reported. “There should, however, be evidence that the decisions made early in the process are producing results.”
A handful of health systems offer a look at what that arc can look like in practice.
Erik Wexler became CEO of Renton, Wash.-based Providence in January 2025. He recently described the system as emerging from a “polycrisis” of overlapping economic, regulatory and environmental pressures, and pointed to five changes driving the system’s operating income improvement of $400 million year over year — from a $225 million operating loss to $175 million in operating income.
Those changes included reducing management layers, concentrating on core services while scaling back underutilized programs, adding services tied to community health needs, transferring or partnering on services better suited to other organizations and reducing reliance on agency staffing. Mr. Wexler also described a more disciplined approach to new investment, including delaying a planned skilled nursing program with Select Medical, telling Becker’s, “We are much more focused and disciplined on the places where we will invest.”
Similar work is underway at West Reading, Pa.-based Tower Health, where the incoming CEO is inheriting a recovery already in progress rather than starting one from scratch. Michael Stern, who joined the system in 2022 as executive vice president and COO, was named president and CEO in February 2025, succeeding Sue Perrotty, a 30-year banking industry veteran who served as interim CEO and led the system’s initial financial recovery following a $440 million loss in 2020; she transitioned back to Tower Health’s board. Mr. Stern has described his priorities as emphasizing “acting as one” system rather than rapid expansion, along with workforce stability, high-quality care delivery and growth in behavioral health and women’s health services.
Elsewhere, a leadership transition can mark a turnaround entering a later stage rather than an early one. Mike Dandorph has served as president and CEO of Burlington, Mass.-based Tufts Medicine since January 2020 and is stepping down Sept. 30, alongside CFO Andrew DeVoe, as the system moves into what Board Chair Phil Lembo called “the next phase” of its financial turnaround. The transition comes as Tufts Medicine’s operating margin fell to -3.4% for the nine months ended June 30, from -2.3% during the same period a year earlier, with the third quarter alone posting a -4.1% margin, down from -0.8% a year earlier. The system reported a $79.5 million operating loss on $2.4 billion in revenue for the nine-month period, as expenses grew faster than revenue. COO Phil Okala has been named acting president and CEO while Tufts Medicine searches for permanent successors.
Taken together, the three systems track roughly with the timeline Fortune lays out: a CEO past the one-year mark working through “launch period” changes, one inheriting a recovery already midstream, and one entering a new phase of its turnaround under new leadership as the work continues.
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