Children's Minnesota says CEO Bob Bonar will retire

Children's Minnesota announced Monday that its chief executive is retiring, the second high-level departure from the state's largest pediatric hospital since last summer's high-profile contract dispute with Blue Cross and Blue Shield of Minnesota.

Children's said Monday that CEO Bob Bonar expects to retire in December, roughly three years after he left the chief executive position at a pediatric hospital in Texas.

Bonar will be replaced by Dr. Marc Gorelick, a physician who joined Children's earlier this year as president and chief operating officer.

The hospital's announcement did not mention the contract dispute with Eagan-based Blue Cross. A hospital spokeswoman said via e-mail there was no connection, and described Bonar's move as "a personal decision."

"We are grateful for Bob's leadership and many contributions during his time at Children's, and we wish him all the best in his retirement," said Hayes Batson, chair of the board at Children's, in a statement. "We have the utmost confidence that Marc and the executive leadership team will carry forward the strong foundation Bob has established, and advance the strategic goals of the organization."

Gorelick previously served as chief operating officer and executive vice president of Children's Hospital of Wisconsin, which is in Milwaukee. He is to begin his new role at Children's on Dec. 9.

Children's is the state's largest pediatric hospital, with campuses in Minneapolis and St. Paul, plus 10 community clinics.

In 2016, Children's posted operating income of $36 million on $880 million in revenue.

The contract dispute over payment terms between Children's and Blue Cross was unusual for including a social media campaign and dueling newspaper ads, as well as its duration.

Ultimately, Minnesota Attorney General Lori Swanson helped negotiate a settlement announced on July 7 — about three weeks before the resignation of the chief financial officer at Children's.

Insurers and hospitals periodically struggle to negotiate contract agreements, but they usually settle before patients are affected.

In the case of Blue Cross and Children's, the parties could not come to terms before a July 4 deadline, so the pediatric hospital was relegated to out-of-network status for Blue Cross subscribers for a few days.

The rift meant significantly higher out-of-pocket costs for people with Blue Cross coverage who used Children's, although exceptions were made for many children who were in the midst of ongoing treatment.

Christopher Snowbeck • 612-673-4744

Twitter: @chrissnowbeck