VCU Health System is shaking things up. Recently, Governor Abigail Spanberger approved changes that will see university President Michael Rao stepping down as chair of the health system’s board of directors. However, he’ll remain in his role as president of Virginia Commonwealth University (VCU).
This decision comes on the heels of a costly redevelopment plan that set the health system back nearly $80 million, as reported previously. The VCU Health System Board plays a crucial role in overseeing patient care, education, and medical research, as defined by Virginia law. Until now, the law required the VCU president to also chair the health board.
A new law, which will kick in on July 1, shifts some responsibilities. It reduces the board’s membership from 21 to 16, extends terms from three to four years, and mandates an election for the chair and vice-chair every two years. Del. Betsy Carr and Sen. Lamont Bagby, both from Richmond, sponsored the measure. Interestingly, Bagby is on the board as well.
Former Governor Glenn Youngkin had vetoed a similar proposal last year. He argued that it would disrupt the balance of power by changing the board’s makeup from more executive appointments to a majority appointed by the legislature. The earlier bill also required appointees to have expertise in finance or real estate, a stipulation that’s missing from the new law.
Youngkin suggested Rao step down from his role following the failed redevelopment plan. He stressed the need for a leader with more experience to guide the health system. Rao expressed his gratitude for the new law, saying it paves the way for the board to find a chair fully committed to the health system, similar to other major universities like UVA.
The changes to the board were recommended by Virginia’s Joint Legislative Audit and Review Commission after examining leadership structures in light of the Clay Street Project’s failure. VCU Health had agreed to a multimillion-dollar lease to convert the old Public Safety Building into offices for the medical community. However, rising costs and poor site conditions led to a $72.9 million exit fee and another $5 million to demolish the site.
Concerns about the project had been raised by former CEO Art Kellerman, who warned about risks before signing the lease. Despite having the authority to decline, he sought guidance from Rao, indicating the complexities involved in such decisions.
The reactions from VCU Health and its leaders have been positive, with hopes for a stronger and more focused direction going forward. As they move ahead, the board aims to set itself up for future success, tackling the challenges that lie ahead in healthcare and education.
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