St. Jude Medical Center’s new chief executive has the weight of a billion dollars on his shoulders.
Former chief financial officer Lee Penrose is taking the top spot at the Fullerton hospital, the county’s fourth-largest and one of three local facilities owned by St. Joseph Health System, an Orange-based Catholic nonprofit.
He takes over this week for Robert Fraschetti, who officially retires next month.
Penrose will oversee the hospital’s $1 billion-plus “master plan” makeover that involves adding some buildings and retrofitting existing ones to make them compliant with California’s hospital earthquake safety law.
Penrose won the chief executive job some four weeks ago, after St. Jude conducted a search that involved a national executive recruiting firm and external candidates.
“I would say it’s probably an understatement to say that I interviewed with 20 different people,” Penrose said.
But he said he was prepared for the rigors when he tossed his hat in the ring for chief executive around the time Fraschetti announced his retirement last October.
Penrose said he expects that Fraschetti, who served as St. Jude’s chief executive for 12 years, will continue to be engaged with the hospital after he retires.
“I have all of his phone numbers and I plan to use them,” he said.
Meanwhile, St. Joseph officials are pleased with their choice:
Penrose “simply doesn’t offer excellence himself, he inspires it in his peers and develops it in his employees,” said Joe Randolph, the health system’s chief operating officer, in a release.
Penrose’s staff will have to maintain business as usual as it moves into a new $126 million tower, which will house heart catheterization labs, an emergency room, an intensive care unit, labor and delivery and postpartum services. The hospital plans to take its first patients in the tower in early 2009.
“We’re going to be moving while we’re continuing to conduct business,” Penrose said.
St. Jude has raised some $44 million of the $50 million in charitable donations needed for the tower.
It plans to pay for the remaining part of the plan through operations and debt. St. Jude recently borrowed $90 million to help with funding of the tower as well as retrofitting.
Retrofit vs. Build
The hospital also is choosing to retrofit its existing complex to earthquake-safety standards, rather than starting over with a new primary patient tower because of space constraints.
“The only alternative would have been to start over from scratch with a brand-new piece of land,” Penrose said. “The thought of picking up St. Jude and moving it to another location would have been pretty difficult to fathom.”
The hospital has to retrofit medical-surgical areas in three buildings on its campus, spread among various floors. St. Jude is working with California regulators on streamlining the process, Penrose said.
And St. Jude is researching the possibility of building what Penrose called a southeast tower, which would be built on the site of the current hospital’s parking lot.
If the southeast tower’s completed by 2013, “We may be able to use it as a substitute for space that’s currently in need of retrofit,” Penrose said.
The project also includes an expansion of the St. Jude Medical Plaza medical office building that is scheduled for completion in 2010. That expansion includes more medical imaging facilities, a home for St. Jude Heritage Medical Group doctors and an outpatient surgery center.
St. Jude ranks No. 4 among local hospitals by net patient revenue. St. Joseph Health System’s other hospitals, St. Joseph Hospital-Orange and Mission Hospital down in Mission Viejo, also are among the county’s largest.
St. Jude, which has some 2,290 workers and 359 beds, had $349.1 million in net patient revenue in the 12 months ended September 2007.
Penrose came to St. Jude in 2000 as the hospital’s chief financial officer. His career includes two years as vice president of finance for St. Jude Heritage and a stint at Orange Coast Managed Care Services Inc.
During his time as chief financial officer, Penrose led projects to improve patient care, productivity and information technology.
He said one of his first chief executive tasks is to find his chief financial officer replacement.
“I’m doing a lot to close out some loose ends with my existing responsibilities,” he said. “I hope to conclude (a search process) as soon as possible so that I can get on to doing just one job.”
Valeant Gets Boost From Drug Results
Shares of Valeant Pharmaceuticals International closed up about 10% last week on positive trial results for retigabine, an anti-epilepsy drug.
In a release, Aliso Viejo-based Valeant said retigabine showed statistical significance in reducing seizures in trial participants.
Valeant’s study looked at a pair of daily doses of retigabine in patients who also were taking other anti-epileptic drugs.
The drug maker, which had a recent market value of $1.4 billion, is developing retigabine as an additional treatment for adult epileptics whose seizures don’t respond to other drugs.
Epilepsy is a common and chronic neurological disorder characterized by seizures.
Valeant said it was planning to submit a new drug application for approval of retigabine to the Food and Drug Administration and European Union regulators before year’s end.
Retigabine, which Valeant gained in 2005 through a $280 million buy of Xcel Pharmaceuticals Inc. of San Diego, is one of the drugs that Valeant is counting on to reverse slowing growth.
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Vita Reed
Advanced Medical: FDA OKs Device
Santa Ana-based Advanced Medical Optics Inc. said last week the Food and Drug Administration approved a laser for use in vision correction surgeries.
The company’s iFS Advanced Femtosecond laser is set to be offered as part of Advanced Medical’s iLasik products for vision surgery.
Advanced Medical’s made a big push into laser vision correction, including its $800 million buy of Irvine-based IntraLase Corp.
The iFS uses technology from IntraLase.
Advanced Medical said in a release that the iFS laser is capable of cutting a flap into a patient’s cornea in less than 10 seconds.
Cutting the cornea is the first step in laser vision surgery. Advanced Medical’s lasers have been gaining market share over metal blades.
Chief Executive James Mazzo called the new device “a tangible example of our commitment to not only maintain a substantial advantage over competing systems, but also to provide technologies that advance the standard of vision care medically.”
The laser is set to be shipped to U.S. eye surgeons in the third quarter.
,Vita Reed
