Aug 3, 2017

Stryker adds former health system CEO (and customer) to board

Christy Radecic / AP

Medical device manufacturer Stryker has added Mary Brainerd to its board of directors. Brainerd, the retired CEO of HealthPartners, a $6 billion not-for-profit hospital and health insurance system in Minnesota, will get an annual $60,000 retainer fee and about $500,000 worth of stock options, according to a federal filing posted by Stryker.

The kicker: Stryker sold $17 million worth of medical devices to HealthPartners between January 2016 through May 2017.

Why it matters: Many health care executives — at both not-for-profit and publicly traded companies — hold cushy positions on the boards of other companies. That isn't problematic in a vacuum, but it could raise questions about conflicts of interest if executives' organizations do business with the companies where they hold board power.

Update: A HealthPartners spokesperson said the system uses "competitive bidding processes for major contracts, and these are complex, evidence-based decisions made by purchasing leadership, not the CEO."

More industry examples: Brainerd's appointment to Stryker's board isn't unique. Here are some other examples of current and former not-for-profit health care executives who sit on the boards of for-profit health care companies that could have business arrangements:

  • Lloyd Dean, CEO of Dignity Health: former board director at Navigant, a health care consulting firm. (More controversially, Dean has been a long-time board member at Wells Fargo.)
  • Kevin Lofton, CEO of Catholic Health Initiatives: board director at Gilead Sciences, a pharmaceutical company known for its high-priced HIV and hepatitis C medicines.
  • William Roper, CEO of the University of North Carolina Health Care: board director at dialysis chain DaVita and pharmacy benefit manager Express Scripts.
  • Martha Marsh, former CEO of Stanford Health Care: board director at medical device company Edwards Lifesciences, medical supplies provider Owens & Minor and health care staffing firm AMN Healthcare.
  • Nancy Schlichting, former CEO of Henry Ford Health System: board director at pharmacy chain Walgreens Boots Alliance.
  • John Forsyth, CEO of Wellmark: board director at medical supplies and drug company Baxter International.
  • Denis Cortese, former CEO of Mayo Clinic: board director at Cerner, a company that sells electronic health records and billing software to hospitals and doctors' practices. (Cerner lost its Mayo Clinic contract two years ago.)
  • Ellen Zane, former CEO of Tufts Medical Center: board director at medical device company Boston Scientific.
  • Kenneth Samet, CEO of MedStar Health: board director at Evolent Health, a technology and consulting company for hospitals and health plans.
  • Diane Holder, CEO of UPMC Health Plan: board director at Evolent Health.
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