Mid-week update: Cano Health CEO finally booted, interim named; further information on Oracle Cerner layoffs

June 21, 2023 | by

Cano Health CEO Marlow Hernandez stepping down, but remains on Cano’s board of directors. It looks like Florida-based value-based primary care provider Cano Health is finally starting to clean up its act. The fallout from the long-delayed shareholder meeting taking place last Thursday (15 June) was that the Cano 3 (resigned directors Barry Sternlicht, Elliot Cooperstone, and Lewis Gold), finally got their way with ousting Hernandez. Mark Kent, who was named chief strategy officer in April, will be taking over as interim CEO while the board performs an external search. No time frame was specified.

Hernandez’s departure was not a surprise since Cano had a miserable Q1, with a $60.6 million net loss versus 2022’s barely-there $100,000. Their adjusted EBITDA was only $5 million, compared to $29.2 million in Q1 2022 [TTA 12 May]. Their new chairman of the board, Sol Trujillo, also has a background in turnarounds.

The Cano 3 own about 35% of the shares and one, Barry Sternlicht, invested at least $50 million in the cracked SPAC’s PIPE. They started to push for change back in April. Today (20 June), they issued a statement approving of Mark Kent’s interim appointment though they were not able to prevent the reelection of directors Alan Muney and Kim Rivera as they urged shareholders to do in a 15 June public statement. 

Despite the ouster, the Cano 3 still have plenty of disagreements with how the company is run, nailing these to the door in their 20 June statement responding to what they called an “Offensive Friday Afternoon “News Dump” Regarding its Leadership Transition”:

  • Per his employment agreement, Hernandez is required to step down as a board director now that he is no longer CEO. “Dr. Hernandez’s employment agreement plainly states that ‘the Executive shall be deemed to have resigned from all officer and board member positions that the Executive holds with the Company or any of its respective subsidiaries and affiliates upon the termination of the Executive’s employment for any reason.” They also cite a “history of insider dealings and fiduciary delinquency.”
  • They demand that directors Angel Morales, Dr. Alan Muney, Kim Rivera, and Solomon Trujillo resign immediately as “Dr. Hernandez’s enablers for far too long”. The board permitted the reelection of directors Muney and Rivera despite 82% of shareholders withholding their votes, citing Cano’s post-meeting statement. 
  • Shareholders now must entrust the selection of a new CEO to a board that is not reflective of the majority of shareholders who have lost over 90% of their share value, and not collaborating with the Cano 3 on reforming the board and a new direction of the company. “In fact, it rejected our Group’s two highly qualified director candidates and a proposal to collaborate on a credible refresh of the Board. We are left to question whether Dr. Hernandez and his boardroom allies are continuing to box us out because they are hiding something nefarious. If not, we urge the Board to immediately align with us on a path forward that includes the addition of our candidates – Guy Sansone and Joe Berardo, Jr. – and other essential changes to leadership and strategy.” Both Sansone and Berardo are very senior executives with long, successful records in leading healthcare services and startups.

(Cano Health shares closed at $1.42 today, a decent bump from their valley last week.) To be continued….  Healthcare Dive

Last Friday, TTA was one of the first to cover the Oracle Cerner layoffs (along with HIStalk) affecting the Cerner Federal teams. This week’s coverage elsewhere confirmed that the layoffs were a minimum of 500 to possibly 1,200, plus rescinded job offers and reduced open positions as this Editor saw from employees posting on the Reddit group. They–in particular, The Register (below), confirmed where this Editor would not go in cause-and-effect–that the layoffs were largely due to VA holding further implementations after multiple failures in the five VA systems where it was implemented between 2020 and 2022. The layoffs were also due to the Department of Defense (DoD) Military Health System (MHS) implementation as largely completed, although not glitch-free. It’s a clear cleanout of what Oracle perceives as a problem. 

Oracle did not respond to these publications’ requests for comments.

The new contract’s focus is to fix these five and implement a sixth (James Lovell in Chicago) which is joint with MHS by 2024. This has to be accomplished before implementation starts in the 160 remaining centers plus satellite medical clinics (CBOCs). VA has much leverage in the five one-year terms and the monetary penalty structure [TTA 18 May]. The pressure to perform for an awakened VA–and Congress–is going to be intense on those remaining, and whomever is shifted over from Oracle. This Editor also noted speculation that Oracle Cerner may start to wash its hands of the just-renewed VA EHR implementation by outsourcing most of it.  The Register, Becker’s, Healthcare Dive   TTA’s coverage of the Cerner/VA implementation here.

My Jawbone saga just got much worse: UP3

August 19, 2015 | by | 1 Comment

Readers may recall this editor’s most recent blast against Jawbone in which I complained about being emailed by them about a product I couldn’t buy. Well in due course I got a nice email from Jawbone, explaining the error and extolling the UP3, that I could buy. So nice that I relented and bought one.

Big mistake: my three UP bracelets that failed have lasted an average of some seven months each. The UP3 lasted just eight days before it stopped recording sleep correctly (an even shorter time than the two weeks the preproduction UP3 took to stop working when on trial by re/code).

Initial problem handling by Jawbone support has always been good – I can only assume they get lots of practice – and indeed I got an email straight back telling me how to do a ‘soft reset’ (These have never worked for me for any of the problems I’ve had, with either UP type of bracelet; perhaps it gets some people to give up.). When I told them it hadn’t worked, this was followed quickly by an email 10 working days ago telling me that they were referring my problem to colleagues and to expect a response within 2-3 working days.

Since when nothing: my emails have gone unresponded to, and I have heard nothing further. If this poor quality is the experience of others too (certainly some), then it’s clearly no wonder why FierceMobileHealthcare refer to Jawbone as one of six companies collectively making up 15 percent of the market with Apple & Fitbit way ahead.

It’s such a shame too, because in spite of the problems, my Jawbones, when they have worked, have been great motivators that have helped me lose over 12 kilos now – unlike the suggestions in the recent Guardian artcle, I’m sold on being nudged. I just need something I can rely on to nudge me!