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Hospital Faces Tumultuous Times

POSTED April 5, 2011 11:59 p.m.

Battle lines are being clearly defined between the members of the Oak Valley Hospital Governing Board. The polarization between members was clear after the last meeting of the hospital’s governing board of directors on March 23.

The divisiveness of the board may have led to the hospital’s chief financial officer’s sudden resignation and questions the future of its current chief executive officer and relationship with Catholic Healthcare West.

 

Community Rep Nomination Causes Rift

During the Wednesday meeting, March 23, Catholic Healthcare West representative and St. Joseph’s Hospital of Stockton CEO Donald Wiley nominated former director Bob Wikoff to serve on the board to fill a vacant CHW community representative position left by the election of Dr. Wendell Chun to the board last November.

The Oak Valley Governing Board of Directors is made up of five four-year term elected positions and five appointed community member positions. The five appointed representatives are made up of two CHW community representatives, two medical staff, and hospital CEO John Friel.

Board President Wendell Chun disputed Wikoff’s appointment as a way to get around the electoral process.

In November, voters also caused a major turnover on the Oak Valley Hospital Board of Directors. Incumbents Bob Wikoff and Belinda Abell failed to win reelection. Dan Cummins and Wendell Chun replaced their seats. Wikoff was short 435 votes to Chun. Louise Pooley-Sanders was also elected to a seat with two years left in its term.

“The electoral process voted him out, so why appoint him?” said Wendell Chun in an interview. “You have four of five elected members opposing (the) appointment. It goes against the will of the people.”

Board Vice-President Dan Cummins agreed with Chun about Wikoff’s appointment.

“He’s being put back on a board he was elected off of,” said Cummins. “I feel we’re circumventing the process by putting him back on.”

CHW is responsible for the community representative nominations.

Don Wiley of CHW said there were two finalists for the community representative positions and the sub-committees were split 2-2 on the appointment.

Wiley said he nominated Wikoff because he had successfully worked with him on various hospital committees in the past and Wikoff was the next highest vote getter in the November elections.

“Bob was familiar with the hospital operation and the goals of CHW,” Wiley said.

Elected Board Director Jim Teter said he was very supportive of Wikoff’s nomination. Teter pointed to Wikoff’s years on the board, that he had gone to Washington D.C. on the hospital’s behalf, and Wikoff was a member of the Association of California Hospital Districts.

“He has a good grasp of hospital procedure,” Teter said.

 

Board President Contends CEO Withheld Information

When it came time for the vote, Chun did not believe his interpretation of the hospital board’s by-laws allowed Wiley to vote in the matter. Chun believed that the wording of the by-laws read that when a nomination was made for a position, the rest of the board would vote.

“My opinion is that the word ‘rest’ didn’t include him (Wiley),” Chun said.

Prior to the meeting, Friel obtained an opinion from the hospital’s legal counsel, Craig Cannizzo, which contradicted Chun’s belief. The fact that Friel did not inform Chun that the legal opinion was acquired and waited until the meeting to inform him, angered Chun, who felt the action was intentionally done to undermine him.

“The CEO had a legal opinion he obtained 11 days before and did not discuss it or inform,” said Chun. “He should have called the board president and let me know.”

Chun said he believed by not notifying him or the rest of the elected board members created more division and made for a “bad scene” at the meeting.

The board voted 5-4 to appoint Wikoff to the community representative position.

“If we knew ahead of time of a legal ruling, maybe we wouldn’t have got into a divisive meeting,” Chun claimed. “I think it’s critical to keep us informed an give us relevant information in a timely manner.”

Friel stated there were previous discussions with Chun prior to the March 23 meeting on the appointment of Wikoff as well as Wiley’s eligibility to vote on the matter. Friel sought a legal opinion and contacted Cannizzo for a ruling that later clarified Wiley as a voting member on the matter.

“For some reason I emailed it only to Don (Wiley) and not Wendell (Chun),” said Friel. “That was an oversight on my part and I apologized.”

Fried said his action was not intentional and was not meant to undermine Chun.

“I thought Wendell got the same thing I got,” said Wiley about the ruling. “It was a simple mistake. It’s unfortunate and made matters worse.”

 

CEO’s Contract Not Extended

Friel has been CEO of Oak Valley Hospital since 2002 and his current contract expires in October of this year.

Friel said that the board usually considers extension requests the year prior to his contract’s expiration. After the November 2010 elections, with the appointment of three new board members, Friel proposed delaying talks about extending his contract until the new board could transition into the positions.

During the last meeting, after Friel’s proposal to address his contract, the board took no action on extending his employment. The hospital’s bylaws state that at least two of the elected board members and the CHW representative (Wiley) have to be part of the majority that votes in favor to extend a CEO’s contract.

Wiley believes if a vote was taken it would have been 6-4 in Friel’s favor, but the four opposing votes would have been the four elected board members of Chun, Cummins, Pooley-Sanders, and Edward Chock, thus not receiving the required two elected member votes.

Chun, Pooley Sanders, and Cummins, who ran as a slate, all were critical of Friel during their campaign.

Cummins said he felt Friel ran a “very authoritarian executive leadership that had the employees rebelling in arms.” He said that Friel had served the hospital well, but time had come for a change.

Teter said he feels like “the odd man out” when it comes to the elected board’s beliefs on Friel and other matters. He supports an extension of Friel’s contract.

“In my opinion he’s one of the top two or three CEOs in California,” Teter said.

“You have a CEO doing a very good job, it’s critical to retain him,” said Wikoff, another Friel proponent. “Only 22 percent of district hospitals in California made a profit last year and we’re one of them. That says a lot about John.”

Community Representative Richard Vaughan said he’s seen the attack on Friel by the four elected board members. He identified their campaign of running on a platform of change and management’s way of doing business.

“His potential loss would do great damage to this hospital,” Vaughan said of Friel. “It would affect the community and the surrounding areas.”

Chun disagreed about Friel, pointing to the failure to disclose the legal opinion.

“A responsible CEO would keep his board president informed,” said Chun. “You don’t think that shows irresponsibility?”

 

CFO Resigns

On Wednesday, March 30, Chief Financial Officer L. Wayne Mills announced his resignation, surprising the board and hospital staff. Many feel the resignation is tied to the governing board and recent actions.

“Wayne saw the writing on the wall with the actions of the new board,” said Wikoff. “After what happened to John (Friel), he was ‘dead-headed’ staying here.”

Wikoff also said that Chun would refer to Mills as a “bookkeeper” and not a CFO.

“He’s a CFO who understands health care and finances,” Wikoff said.

Teter claimed the loss of Mills was a blow to Oak Valley Hospital.

His expertise on finance and health care is above and beyond,” said Teter. “You don’t replace someone with those qualities easily.”

Cummins also was surprised by Mills’ announced departure.

“I had no idea he was going to leave,” said Cummins. “I wish him the best of luck.”

Wiley of CHW also pondered whether Mills’ departure was motivated by a “lack of functionality of the board.” Wiley said the loss of Mills would be a big loss to the organization.

When contacted, Mills said he was offered an opportunity as a senior vice-president and CFO with a multi-hospital system in Northern California that had no relationship to CHW.

Mills said he was not searching for any new opportunities and was approached recently.

Friel confirmed that Mills accepted a new position with another health care system and gave a 30-day notice.

“He’s accomplished a lot,” said Friel. “He’s leaving the hospital in a much better state than when he arrived in 2001.”

Friel acknowledged there is contention between the governing board but refused to speculate if those conflicts were a cause of Mills’ leaving the hospital.

 

Future With CHW In Question

Vaughan commented he feels there is a movement by the four elected board members to severe the hospital’s relationship with CHW.

“It would be disastrous to the community,” Vaughan said.

Teter echoed Vaughan’s sentiments.

“They’ve done everything they can to make CHW go away,” said Teter in reference to his fellow elected board members. “They do not like the 10-member board set up with CHW.”

Teter also questioned whether Oak Valley Hospital could remain prosperous without the CHW alliance.

“We could not stand alone,” said Teter. “CHW gives us so much more as a health care provider. They’re a major player with 42 hospitals and multiple physician referrals.”

Cummins said he supports the relationship with CHW and feels the hospital is getting support from the organization. He said CHW officials have assisted in the process of finding a new CFO and appointing an interim until one is permanently appointed.

“We have a contract with CHW that runs through 2013 and I support that,” said Cummins.

Wiley, the CHW representative, confirmed the contract with Oak Valley Hospital runs through 2013.

“Our purpose is to provide positive health care to the community,” Wiley said. “Both the district and CHW need to give considerable thought to continuing.

“The last couple of meetings (OVH board) members were split on a number of matters,” added Wiley. “I don’t know what to expect now. If they’re focused on the community the votes should be 10-0.”

Several attempts to contact board member Louise Pooley-Sanders for comments were unsuccessful and messages left were not returned.

 

The next meeting of the Oak Valley Hospital will be April 27 at 5:30 p.m. in the Royal and Charter Oak Conference Rooms on the first floor of the Oak Valley Medical Plaza building at 1425 West H.

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