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    UMass hospital leader to retire

    Over 10 years, O’Brien guided turnaround

    UMass Memorial Health Care chief executive John G. O’Brien, one of the best known figures in the Massachusetts health care industry, said Wednesday that he plans to retire next January from the Worcester-based hospital system he has led for a decade.

    O’Brien, 61, who previously ran Cambridge Health Alliance, was hired in September 2002 as the fourth chief executive in 27 months at UMass Memorial. He promised its board that he would stay for 10 years, he said Wednesday, and immediately launched a turnaround that helped stabilize the system’s finances, slow its rate of turnover, and repair frayed relations with its teaching affiliate, the University of Massachusetts Medical School.

    The system, which operates UMass Memorial Medical Center in Worcester and four community hospitals, has expanded during O’Brien’s tenure from 700 to 1,100 staff doctors and from 10,300 to 13,000 workers, making it the largest employer in central Massachusetts.

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    “We’ve grown enormously, and we’ve invested in the system,’’ O’Brien said.

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    But in recent years, UMass Memorial has struggled to make money and maintain its patient numbers amid government reimbursement cuts and pressure from insurers to cut costs. Last month, it disclosed plans to shed 700 to 900 jobs, about 6 percent of its workforce, through a combination of layoffs and the sale of businesses such as a home health care service.

    It also agreed to pay $520,000 in a deal with attorney general Martha Coakley to settle a case in which it was accused of improper marketing for hiring models in short skirts to recruit potential bone marrow donors. “We obviously regret that,’’ O’Brien said. “We run hundreds of programs. Sometimes we take our eye off certain things.’’

    O’Brien’s long run at UMass Memorial drew praise from health care and elected officials. “John O’Brien is one of those few legendary leaders in health care who everyone knows and respects,’’ said Lynn Nicholas, president of the Massachusetts Hospital Association in Burlington. “In my opinion, he is a ‘leader’s leader,’ and for both his style and his many significant contributions, he will be missed by his colleagues.’’

    But the Massachusetts Nurses Association released a statement expressing “serious concerns about the current state of affairs at UMass Memorial Medical Center,’’ suggesting O’Brien was making staffing cuts to pay for the bone marrow marketing settlement. It also said that in contract talks UMass Memorial is seeking to cut nurses’ pension and health care benefits.

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    O’Brien said UMass Memorial has hired the executive recruitment firm Korn/Ferry International to lead a nationwide search for his successor and hopes to hire someone by the fall to work with O’Brien before he retires. He said his successor will face multiple challenges.

    “The change in health care, with federal reform and state reform, is going to be the constant going forward,’’ he said. Referring to lower anticipated payments for Medicare and Medicaid, the government health insurance programs for older and low-income residents, he said, “I think all health care systems are going to have a real problem keeping up with that.’’

    As to his own plans, O’Brien said he would remain involved in health care and may take a position in public health. In his previous job as chief executive of Cambridge Health Alliance, he was also public health commissioner for the city of Cambridge.

    Robert Weisman can be reached at weisman@globe.com.