EDMONDS – Dr. John Todd, who was named acting chief executive of Stevens Hospital in January, will continue in that post for the next two years.
The recommendation to keep Todd on as the hospital’s acting chief executive was made Wednesday by a five-member committee helping in the search for a new chief executive.
“We think continuity of leadership is absolutely critical,” said Dave Earling, who headed the group.
“We need someone … who has leadership skills to stabilize the organization and yet … make very difficult decisions.”
Todd, who previously worked as the hospital’s medical director, took over as acting chief executive of the taxpayer-supported hospital when former CEO Steve McCary was fired.
The action to terminate McCary’s contract was made by the hospital board during an unannounced meeting in late January.
No specific reason was given for McCary’s departure. He was given a $2.1 million severance package.
On Wednesday, board president Fred Langer said that Todd has agreed to stay on, but it will be about a month before the three-member hospital board reaches a contract agreement with him.
Details of the contract will be made public, Langer said.
Todd said that from the beginning of his tenure, the hospital’s finances have been a major issue.
In May, auditors reported that Stevens Hospital, its medical clinics and other businesses incurred net losses of $2.5 million in 2003. But day-to-day business operation losses could hit $5.5 million for 2003 once all costs have been tallied.
The audit said “the hospital is financially unhealthy,” Todd said Wednesday.
In April, he asked Wellspring Partners, a consulting firm, to suggest specific steps to get on firmer financial footing.
“We asked them to tell us what exactly was wrong and what we might do to change things to bring us back to financial health,” Todd said.
In their initial report to the board on Wednesday, consultants said improvements could be made in several areas, including contracting for supplies and services, better collection on unpaid bills, and trimming the $2.5 million spent last year to hire fill-in nurses from employment agencies.
“The (financial) turnaround at Stevens Hospital is very doable,” Wellspring consultant John Tiscornia said.
“Stevens will return to financial stability,” he said, but it could take about two years.
Charges for the national consulting firm to work with the hospital for six months are expected to hit $1.44 million.
However, the hospital is expected to gain $6 million in cost savings and additional revenues over the next two years by following its recommendations, Tiscornia said.
The consultants also recommended expanding the three-member board to five or seven members, a step requested by the public in meetings earlier this year. Langer said public hearings will be held on the topic in late July or early August.
Voters would have to approve the change, which could be decided as early as the November general election.
Reporter Sharon Salyer: 425-339-3486 or salyer@heraldnet.com.
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