CEO, CFO both out in Altru Health System leadership shakeup

Two executives were let go Monday morning in a move that a board member says is “a proactive response for our future."

Altru Health System's Chief Operating Officer Brad Wehe leads a presentation Monday to the Grand Forks City Council on Altru's plans for development of a new complex on Columbia Road. photo by Eric Hylden/Grand Forks Herald
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GRAND FORKS — Two top leaders at Altru Health System were fired by the company's board on Monday.

CEO Brad Wehe and CFO Sara Lusignan were informed of the decision Monday morning. Steven Weiser, Altru's president, will take on expanded duties indefinitely.

The announcement marks a sudden departure for Wehe, who became CEO on Jan. 1, 2019, after previously serving as COO; Lusignan joined the company in February 2019, according to a company internet page that, as of Monday afternoon, was no longer directly accessible. The news is the latest negative headline for a health care company that, within the last six months, has changed course on a major hospital construction project and twice had the ratings on its revenue bonds downgraded.

Lonnie Laffen, the board’s vice chairman, delivered the news to the Herald during the noon hour, moments after employees were informed about the change in an internal email. That email did not wade into specific reasons for the change, and Laffen declined to go much further, calling it only a "board decision."


The announcement was provided to the Herald by Laffen shortly after it was sent to employees. The announcement also was sent to the Herald by a source within the health care company.

“It’s not criminal, it’s not personal, it’s not any of that," Laffen told the Herald. "But we need to be positioned for the changing health care future, and that’s what we’re doing. Health care’s changing quickly."

"Over the next several months, we will be evaluating our organization's leadership needs to ensure our executive team is positioned for success," the internal email, which was signed by board chair Kris Compton, states. "At that time, we will begin a recruitment process as appropriate."

According to a prepared release from Altru, Craig Faerber, a career financial expert and accountant, is joining Altru to work as interim CFO. According to a LinkedIn page, Faerber was the CFO of Kaiser Health Plan of Georgia until August, a position he held for eight years.

“It is a proactive response for our future,” Laffen said of the changes. “It is a proactive change.”

A major hospital upgrade project on the Grand Forks Altru campus officially broke ground in early June, and was launched as a seven-story, 528,000-square-foot building. But it was publicly reported in December to have since been reduced to a five-story, 420,000-square-foot endeavor, with a commensurate slash in price from $305 million to $250 million. Altru leaders explained then that the hospital was shifting to meet a future where outpatient services are much more frequently in demand.

Both times that Altru has had its revenue bonds downgraded, ratings agencies have taken a mixed or pessimistic view of its finances. Fitch Ratings released a December report that took a sunny view of Altru's likely path to improved performance, for instance, but noted that the company is expected to take on additional debt in 2020. Fitch ultimately rated company revenue bonds with a negative outlook.

Moody's, another financial ratings firm that downgraded Altru bonds, also took a dim view of the company's future in its own ratings report, which was released in August. That report noted that the company’s “days cash on hand” — which portrays the time it could operate solely on its bank account — had dwindled from 141 days at the end of the 2017 fiscal year to 111 as of mid-2019. Altru officials have pointed out that the new hospital project — a major, one-time expense — has contributed to that decline.


“The downgrade … reflects a number of ongoing challenges," the report stated , "including declining operating performance, declining liquidity, and weakening debt measures that we anticipate will continue over the near term."

The Moody’s report also noted that turnover among the company’s leadership was likely a factor in the company’s “poor operations in 2018 and continuing into 2019,” which raises further questions about the immediate impact of Wehe and Lusignan’s departure.

The executives’ dismissals come in the midst of a Herald investigation into Altru Health System's finances and internal operations, spurred by rumors of layoffs and reorganizations within the company. Laffen, along with Altru spokesperson Annie Bonzer, addressed those rumors on Monday, pushing back on the suggestion that Altru's finances are suffering or that the company could merge with another area health care provider.

"We are not being sold, we are not having layoffs and we are not in financial trouble," Laffen said. “Every organization has what I would call ‘restructuring.' In Altru, there’s maybe a little bit of downsizing, but we have no system-wide layoffs or reduction in force at all in the plan."

Laffen added, though, that some departments "may have a person or two too many" and that, as healthcare needs change, they may be "offered something else" at Altru.

Bonzer, who sat in on Laffen's Monday's conversation with the Herald, said in the case of "realignments," employees are offered "a formal career transition program … and they are at least attempted to be connected with other positions that are available and open."

“That could feel like a layoff to somebody," Laffen said.

At multiple points during recent months, Altru officials have argued that there are market forces larger than the company that are shaping the outlook throughout the health care industry.


Wehe himself discussed those forces with the Herald in a lengthy interview conducted precisely three weeks before his dismissal, noting in particular hospitals' increased focus on outpatient care.

The Herald has not yet published its investigation into Altru’s internal workings, which Wehe also previously discussed with the Herald.

"We have examples where total joint replacements are same-day. And when I started as a physical therapist 30 years ago, they were weeks, many weeks they were inpatients," Wehe said. "So just think of the change of that, and the change of resources that you need, the technology. The length of stay of a hospital inpatient is decreasing. Part due to technology, part due to advanced procedures, part due to patients don’t want to be in the hospital any longer than they have to be, so that length of stay has decreased."

In that same interview, Wehe argued that Altru is well-positioned for the future, and dismissed rumors about the health care company’s performance as merely that.

“Folks should not be concerned about the health of the system,” Wehe said. “Help me articulate that. … That’s not unusual in healthcare. Health care is under fire right now — that’s part of the world we’re all living in right now. The plan, the improvements, the relationships are all solid and progressing, it’s just that takes time.”

The Herald’s Korrie Wenzel contributed to this report.

Brad Wehe
Brad Wehe

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