When the new 25-bed critical-access hospital in Valdez, Alaska, opens its doors later this summer, the facility's former chief executive officer, Jim Culley, won't be there to welcome patients.
Although Culley oversaw the development of the $26 million, 69,000-square-foot replacement hospital for the remote port city of Valdez, he resigned his position as CEO of the Valdez Regional Health Authority in May because of a board dispute.
"There has got to be open communication at all times, and that didn't happen in my case," said Culley, a 28-year veteran of the military who had been CEO since 1996. "It's a two-way street."
While Culley said he took pride in developing the needed hospital for Valdez and staying on budget during his tenure, he stepped down for several reasons, among them that the hospital's board was holding meetings and sharing e-mails without his knowledge, he said. Among Culley's complaints was that Valdez Community Hospital's board was negotiating with Providence Health System-without consulting him-about assuming management of the critical-access hospital. Providence owns 345-bed Providence Alaska Medical Center in Anchorage.
Board member Dorothy Moore, who previously served six years on the Valdez City Council, told Modern Healthcare that discussions between the city of Valdez and Providence have been under way for a few years and that she believed it was common knowledge that representatives from both organizations were still talking.
"My personal feeling-and I'm not speaking for the board-is that Jim has been wanting to leave for a long time," she said, adding that she believed Culley's management style and military background may have played a role in his departure.
"We have a lot of freethinkers up here in Alaska, so when you come along with more of a military style and give orders, sometimes it doesn't translate or people don't take it as congenially as they should," Moore said.
Other members of the seven-person board, including the board chair and vice chair, did not return calls seeking comment. But the incident has drawn attention from rural hospital administrators and healthcare leaders throughout Alaska who, in addition to weathering financial, clinical, operational and employee-recruiting challenges, are increasingly looking to improve their governance. Alaska State Hospital & Nursing Home Association President and CEO Rod Betit said he hopes that other rural hospital leaders in the state and even nationwide will learn from Valdez's struggles and look for ways to improve CEO-board relationships.
"People get into arguments over who has what authority over what type of deal, so we want to work with the trustees and help them figure out what's in their domains and what's not," said Betit, who served as director of the Utah Health Department for 16 years. "In Jim's case, he decided he'd had enough. His situation boiled over more than others. That's unfortunate and we hate to see that happen."
Because budgets are tight and trustees' locations in isolated Alaska communities add to travel time and costs, the state hospital association is working on a series of short primers for CEOs to use to educate trustees about operational and governance issues.
"You have to feed things to the board in smaller bites so that they can begin to develop a long-term board plan about the future of the hospital and not focus on the day-to-day operations like budgets, purchasing or staff relations," Betit said.
Culley said that Valdez Community Hospital's board became involved in operational decisions that undermined his authority with the hospital staff. "For example, they don't have a clue about house-keeping needs and should not be making those kinds of decisions," he said.
Moore said the hospital board could not answer questions about the facility's budget when asked by the Valdez City Council. "When you have a board that doesn't know ins and outs of the budget-granted it's the responsibility of the CEO to prepare the budget and make sure the board understands it-maybe there wasn't as much communication as there should have been," Moore said. She added that Culley had several notable accomplishments, among them getting the hospital out of a cash flow crisis and obtaining critical-access designation.
The hospital lost $827,000 on operations in 2002 and about $544,000 in 2003.
Wrangell Medical Center, a 22-bed critical-access hospital located on a sparsely populated island, also faces board education challenges. "Boards of directors at hospitals in smaller towns are very different," said Wrangell's CEO Brian Gilbert. "You end up with the guy who runs the local hardware or grocery store and they don't understand Medicare or Medicaid. You try to explain that you're getting paid at cost from rates two years ago and how you are running the hospital and it's hard for the board to understand that.
"Then when all the heat comes down and the administrator catches it, the board says they'll just get another administrator. ... The community will think the board is doing their job. That's happening across the state and that's what happened to Jim."
At its annual meeting, the state hospital association, which represents the state's 29 hospitals, will conduct a day of board training and breakout sessions with a governance consultant. "People will leave the breakout sessions with a better understanding of how (the CEO-board relationship) needs to be set up," Betit said.
At 27-bed Petersburg Medical Center, CEO John Bringhurst said the hospital is running half-day board training sessions with an outside expert because sending his seven trustees to a training program elsewhere could cost tens of thousands of dollars the hospital can't afford. "Having well-trained board members is the key to surviving in these times, and maybe why we've been successful here," he said. "Because those strong administrator-board relations are in place, we're able to cope with the other challenges."
Gilbert said many of the state's small rural hospitals are city-owned and also answer to both the hospital board and the city's board or city council.
"Some poor administrators here don't know whom they work for-their board of directors or the city council," he said, adding that leading a hospital in a geographically isolated location is difficult enough without the additional governance challenges.