State health officials are appointing hospital strategist Jim Diegel, former president and CEO of the Redmond-based St. Charles Health System, to take over as interim superintendent of the Oregon State Hospital — the third interim to fill the spot in just over a year.
The state has not yet announced Diegel’s appointment, though it is expected to soon. The Lund Report has for weeks been asking the Oregon Health Authority and other officials about the vacancy, and confirmed Diegel’s selection through separate reporting.
Diegel was president and CEO of St. Charles for eight years before stepping down in 2014. Diegel helped facilitate the merger of the Bend and Redmond hospitals in 2001, and oversaw the health system’s strategy and growth to include facilities in Bend, Redmond, Prineville and Madras.
After leaving St. Charles, Diegel served as CEO for Howard University Hospital in Washington, DC. In 2019, Deigel became the chief strategy officer for Maui Health System in Hawaii, which operates three hospitals and two clinics.
Diegel’s role is significant, as he is being tasked to turn around a long-troubled institution that is a lynchpin of both the state’s behavioral health and criminal justice systems.Oregon State Hospital is the largest psychiatric hospital in Oregon.
Previously reserved for people civilly committed after a judge found them a danger to themselves or others, it now primarily houses people facing criminal charges, who are deemed to lack the ability to assist in their criminal defense.
Its main facility in Salem has a bed capacity of 558 people, and its Junction City campus has capacity for 145.
Diegel fills the spot vacated by Dr. Sara Walker, who was asked to resign April 11 after Gov. Tina Kotek ordered the Oregon Health Authority to install new leadership at the troubled state psychiatric institution. Kotek’s decision came after details of a March fatality at the hospital came to light — involving a patient who was left locked in a seclusion room without adequate observation, lost consciousness and subsequently died hours after being admitted.
Oregon Health Authority leadership replaced Walker with one of its own, OHA Deputy Director Dave Baden, as a placeholder while the search continued for a new director.
Walker had held the position as interim superintendent for only a year, and did so while also maintaining her role as chief medical officer for the hospital. She resigned from both positions when she left in April. The hospital hasn’t had a permanent superintendent since Dolly Matteucci resigned in March 2024.
Matteucci led the state hospital since 2018. The absence of consistent leadership at the embattled hospital comes when it is in dire need of long-term direction as it deals with persistent staffing challenges and a statewide shortage of behavioral health treatment beds. A shortage of nurses and the state’s new hospital nurse staffing law have caused the institution to spend tens of millions in unbudgeted funds to hire costly temporary staffers.
Meanwhile, in recent years a slew of findings of unsafe conditions issued by the Centers for Medicare and Medicaid Services have put the hospital repeatedly in jeopardy of losing its eligibility for federal funding. The hospital is also the subject of litigation against the Oregon Health Authority because of the hospital’s failure to meet the demand for secure residential treatment, forcing jails and hospitals to house patients without appropriate care.
Earlier this year, lawyers for Disabilities Rights Oregon filed a contempt motion against the hospital for repeated violations of a court order that requires the hospital to admit within seven days people accused of crimes who were unable to aid and assist in their defense, with the goal of getting defendants the treatment needed to stand trial, rather than languishing in jail.
Gov. Tina Kotek has proposed a $49.7 million funding increase for the state hospital .
In March, following the unexpected death of the third patient within the past year, the hospital was investigated by the Joint Commission, a nonprofit that accredits health care providers, including the state hospital. In its report to Oregon health officials, the commission found “conditions that pose a serious threat to public or patient health and safety,” and said staff did not follow emergency protocols.
In April, the health authority issued a three-page plan for improving safety at the hospital. While offering few details, the plan focuses on identifying the risk of future deaths and major injuries, increasing staffing to operate more like a 24/7 hospital, and providing clearer direction and empowerment to staff to keep patients safe.
