Former St. Joe's board officers give reason for resigning

DICKINSON - Concerns about more staffing cuts and possible additional changes in services, without having a comprehensive recovery plan in place, is the primary reason the officers for Dickinson's St. Joseph's Hospital and Health Center's board of directors resigned last week.

A three-paragraph letter signed by former board President Nancy Johnson, Vice-President Guy Moos and Treasurer Tom Ribb addressed to current St. Joe's CEO Claudia Eisenmann outlines their regret for recently approving a proposed reduction-in-force plan. The letter also states they can't support a direction being proposed for St. Joe's Emergency Department by owner Catholic Health Initiatives.

"Upon further consideration, we, the executive committee board members, regret the action we took on the afternoon of February 6th whereby we approved the reduction-in-force scheduled to occur on February 8th without adequate notice and information," the opening paragraph of the resignation letter states. "We are troubled with the direction CHI is proposing for the Emergency Department and cannot support it."

"Our repeated requests for a CHI comprehensive recovery plan have gone unanswered for several months despite the many CHI assurances that a plan would be forthcoming," the second paragraph begins. "We have not been involved with assisting in developing a plan for St. Joseph's Hospital."

The letter concludes with its third paragraph that reads, "We will not continue as board members under these conditions and believe it is in our best interest and CHI's best interest that we resign effective immediately."

In an interview with Johnson, Moos and Ribb Friday afternoon, they retraced the events that led to their decision to resign.

Losing money, losing money

Johnson said her history with the board began with previous CEO Allan Sonduck, who looked at whether St. Joe's qualified for a critical access designation that would provide increased reimbursements from the Centers for Medicare & Medicaid Services. From the information the board was given then, St. Joe's didn't qualify.

"We're losing money and losing money and no one has really been able to put a finger on what's happening," she said.

Sonduck leaves, Eisenmann is hired and within her first 90 days works hard and figures out what is really going on. The bottom line is St. Joe's suffered $13.2 million in operational losses from fiscal 2002 to the end of the most recent fiscal year this past June 30.

"Kudos to Claudia. I think she is an excellent administrator and very knowledgeable and understands this," Johnson said. "Then about a year ago after we learned this, there was going to be a plan."

Ribb said conversations about a recovery plan go back to March 2007 when CHI's Larry Schultz, Eisenmann's former supervisor, attended a meeting and "said we're going to have a plan."

Johnson added CHI Chief Operating Officer Michael T. Rowan then visited Dickinson and said CHI was going to get the board a plan.

"They were going to make sure that Dickinson would remain viable," Moos said, while Ribb added Rowan's comments about producing a plan are in the minutes from that meeting with the board.

What's the plan?

Johnson said the board has repeatedly asked "What is the plan?"

"We've closed the cancer center, and we voted to do that; it was a difficult decision. We voted to allow the mental health to close, again something we really didn't want to see happen in our community," Johnson said. "Well, come last week, we were asked to authorize some more reductions in force and maybe some changes in the way the Emergency Room operates. And still no plan."

The discussion about the proposed reduction-in-force occurred during a conference call involving the three officers and Eisenmann. This was the first time the officers had been approached about the reduction-in-force proposal and they were asked to act upon it.

Eisenmann said the proposed reduction-in-force was tabled after the three officers who approved them resigned the next day.

"What I can say is we had lengthy discussion about the issue during the (conference call) meeting. They voted to approve the plan," Eisenmann said about the reduction-in-force proposal. "The majority of the plan was attrition based and restructuring based, as opposed to the eliminations of positions, and I think that is very important to point out as well."

When the officers visited her the next morning to say they were uncomfortable with the decision, "we suspended the action. It seems to me that is an appropriate way to handle a board's level of discomfort with having made a decision like that," Eisenmann said.

"Do we just keep cutting, cutting and cutting without knowing where we are going?" Johnson said. "...we're supposed to be the advocates and the spokespeople for the board and the community and yet we don't know where it is going, we don't know what the plan is."

Ribb said on four specific occasions the board was told there would be a plan to consider.

Asked what she could say about conversations the board had with other CHI officials about a recovery plan, Eisenmann said she participated in those discussions.

"However, what I can't do is really talk about the various kinds of discussions that occurred in those meetings, because again those were closed meetings that occur with other board members and other members of CHI in the room," she said. "I can't breach my role as CEO of this organization and talk about what happened there."

Steps to recovery

While serving on the board, Johnson, Moos and Ribb helped to secure an increase in reimbursements from Blue Cross/Blue Shield for services provided by St. Joe's in an effort to help better the facility's poor financial position. Hospital officials with congressional and state support also were successful in working to get CMS to reopen a rural hospital demonstration project that it's now applying for to obtain additional revenues over two years. Since this past July, about $2.1 million in labor expenses also have been cut.

The last and most important component hospital officials are still pursuing is to gain a critical access designation from CMS, which results in substantial increased reimbursements for services. The existing obstacle is the Richardton Memorial Hospital and Health Center acquired the critical access designation in 2001. This precludes St. Joe's from getting the same designation, as federal guidelines state critical access hospitals cannot exist within 35 miles of each other.

Richardton officials have stated they are pursuing avenues that allow them to give up their critical access designation while remaining financially viable. But what happens if the necessary steps to get the critical access designation for St. Joe's don't come together?

"Based on discussion we have had within CHI, there is still a high level of optimism that we will be able to ultimately come to a solution on critical access that will work for the community of Richardton and will work for us," Eisenmann said. "That is the direction everybody has been pushing very, very hard and diligently over many month's now. From CHI's perspective, I think that we feel so positive about our ability to ultimately obtain that status, that the overall sentiment has been if we don't get it, we'll cross that bridge when we come to it."

Eisenmann said she can't give specifics about CHI's strategy for achieving the critical access designation due to confidentiality. Instead, she reiterated the high overall optimism that exists for gaining the designation.

"Even with critical access, we're not going to cash flow," Moos said.

In Ribb's view, the steps that have been taken so far to improve the financial stability don't represent a plan.

"They are pieces in a plan. What have they been able to tell us if these things don't work? What are we going to do? Where are we at?" he said. "It's like they lurch from one thing to another."

Johnson said the three officers value the hospital and its important role in the community, "and we don't want to see it going down the tubes. We want to keep it viable. We have been working hard with the delegation from D.C., the governor's office, we have visited with them several times, trying to make it work. "

And yet the board still doesn't know what CHI's plan is for St. Joe's, she added.

"And a board that supposedly has fiduciary responsibilities, I guess we felt that was critical to know what the plan is. If the plan is cut, cut, cut until you get down to where there isn't much of anything left here, and then say 'It's not going to work' and walk away, what does the community have left, and what does the region have left to put in place," she said.

No time to discuss

Johnson said the other frustration is when it came to discuss the proposed reduction in force, they were basically told CHI was to cut so many full-time equivalent positions, "and we didn't see any papers. Why these FTEs, what's the alternatives, how is this going to help? Just approve it."

"And we did," Ribb said, "just like we're trained to do. Kind of the way we've worked is they come with something, (say) 'I need a motion,' we make a motion and pass it."

It was after passing the motion to approve the reduction in force that Eisenmann then told them that in a couple of weeks, CHI was going to look at reducing the physician coverage in the Emergency Department to half-time, Ribb said. Johnson said the balance of the staffing was to be filled by mid-level individuals.

"When she said that, we said, 'Whoa, you're going to get a lot of pushback from us on that,'" Moos said.

Johnson said the frustration is maybe the reduction in force and changes in the Emergency Department do need to happen, "but we aren't shown how this fits into the picture. That's the frustration. It's just, 'Here, approve this, approve this, approve this, and I couldn't any more go to my community and say I voted for that and I agree totally with it."

Balancing the discussion

Eisenmann feels it's important, however, to bring the discussion back into balance.

"We have been very candid, I believe, and very open in fact, about the fact that the steps that are going to have to be taken to try to bring this hospital back into a climate of financial stability, are going to be hard," she said. "The steps are going to be hard, and they are going to be painful. Having these kinds of discussions at the board level is vitally important. We have to be able to talk about hard decisions. We have to be able to see that bringing our cost structure into line is an important step to moving closer to this hospital being a vital and strong community resource."

When the three officers gave Eisenmann their resignation letter, they did leave the door open for further discussions with her and anyone else from CHI with the possibility of reconsidering their resignations. CHI did not, however, take the officers up on the offer for further discussion.

"I talked with them several times," Eisenmann said. "However, in the end, there was some discussion that occurred actually at CHI between other members of CHI and I about whether or not it was feasible to have further dialogue with those members to try to meet their expectations. The decision was that it was probably in everyone's best interest to simply accept the resignations of those board members as they submitted them."

Eisenmann said she can't speculate on what the community's view will be regarding the resignations.

"People who are independently minded people sometimes have differences in terms of philosophies. In this case, you have three people who were very good volunteers on this board I believe during their tenure. And for whatever reason, ultimately what developed was a difference in philosophy between them and CHI," she said.

"And because of that, as with any other case where you have independent people who philosophically differ, sometimes you have to part company," Eisenmann added. "I think that is unfortunately what has happened in this particular event. How that will be interpreted, I don't know. But I think that is clearly the case."