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Hospital leadership uncertain in new contract

Posted: December 20, 2011 - 1:05am

Bartlett Regional Hospital approved a renewal of a management contract with Quorum Health Resources on Monday. However, details in the contract shift responsibilities of two top level positions.

QHR has been the management company for Bartlett for decades. Board member Robert Storer said the contract expiration was coming up when the board began negotiations. The board started negotiations in 2010, and went out for bid this year because the hospital is city owned. It received the interest of three companies — QHR, PeaceHealth and Alliant Management Services. Ultimately, the board decided to continue negotiations with QHR, but with one key change in the contract — the chief executive officer and chief financial officer would be employees of the city, not the company.

QHR is not directly responsible for any other employees, but assists with management services, including purchasing equipment with discounts, continuing education, strategic and advisory support and others.

“As we studied through the issues … the board came to the conclusion that we wanted the CEO and CFO to report directly to the board primarily for accountability reasons,” Storer said.

When asked if those reasons were because of existing issues or preemptive changes, Storer said they were a safeguard measure to better align the hospital structure.

That change, however, means an uncertain future for CEO Shawn Morrow and CFO Garth Hamblin.

A committee will meet on Wednesday to discuss management transition and what that will look like, but as it stands Morrow and Hamblin have non-compete clauses as QHR employees and would not be able to be Bartlett employees for a full year.

“We asked Quorum to waive the clause and they didn’t,” Storer said. “It’s a difficult environment right now.”

That doesn’t necessarily mean Bartlett’s doors are closed to the duo, however. Communications Director Jim Strader said interim agreements could be possible. More options will be discussed at Wednesday’s meeting — which is at 4 p.m. in the BRH Administrative Board Room.

The current contract, which was extended six months, expires Jan. 31.

Other changes were scattered throughout the contract, but not as significant as the leadership structure change.

“There is what I would say is a material improvement in the proposed contract that more aligns the contact with the hospital in the city’s interest,” Storer said.

He said some examples include indemnification, insurance requirements and a choice-of-venue clause that means disputes will be resolved in Alaska, not Tennessee where the company is located.

QHR works with more than 250 hospitals nationwide.

After a short executive session with the its attorney Richard Monkman, the board unanimously approved the contract.

On Monday it also gave an informal nod of approval to hire an interim chief operating officer. The COO position has been vacant for quite a while, and the administration considered applications for the permanent position, however those were not accepted.

One person who had applied for the position is again being reconsidered for the interim job.

“It is important for there to be some redundancy in leadership in the event Garth and I are not here,” Morrow said. “Hiring an interim COO might be a way to bridge the gap — if Garth and I are gone, Jan. 31 comes and there still isn’t a CEO or CFO in place. It would be a bare minimum to keep day-to-day operations going and functioning in that light. It would be purely an interim COO.”

Morrow said it will be made clear that person would not be a candidate for CEO and highly likely also only an interim COO.

Morrow said if it comes down to hiring a new CEO, that person should have the ability to choose his or her own cabinet staff.

Morrow said he had the names of two people who could fill that role. He was comfortable with selecting one of the prior candidates in the interim, but said staff feedback in the review process was divided, he wasn’t comfortable with hiring for the permanent slot.

“He knows the permanent position was off the table,” Morrow said. “I called him a couple days ago, and told him interim work only. He called back a couple hours later, saying he thinks he can do a good job. He thinks he can prove himself and do a good job.”

The board wasn’t tasked with giving formal voting approval, but Morrow asked if there were any “glaring objections” to the proposal. There were none.

Morrow said he hopes to have an interim COO in place after the holidays.

• Contact reporter Sarah Day at 523-2279 or at sarah.day@juneauempire.com.

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