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PeaceHealth Prepares for a New Round of Layoffs

Information leaked to The Lund Report shows that former president Alan Yordy did not leave the organization voluntarily.
January 13, 2016

A new wave of layoffs is expected to hit PeaceHealth with employees losing their jobs at the end of January, according to inside information leaked to The Lund Report.

Beth O’Brien, chief operating officer, is responsible for these layoffs. She’s been working with FTI Consulting, which has extensive industry expertise around the world, and is being paid $20 million a year for its services.

Late last year, O’Brien forced out several high ranking executives after revoking their decision-making authority including Dr. Mike Murphy, chief medical officer, and Peggy Allen, interim chief financial officer, along with Sy Johnson, John Hill, Kevin Walstrom, Ryan Ball, Howard Graman and Tricia Roscoe.  

The new layoffs will roll out across PeaceHealth’s three-state region of Washington, Oregon and Alaska. Roughly 50 people will be let go from each region, with 100 employees from the system office in Vancouver losing their jobs, according to confidential sources.

When asked for more details about these layoffs, Monique Danziger, public relations spokesman for PeaceHealth, provided the following statement: “Consistent with our policies and values, PeaceHealth will always respectfully refrain from commenting on information that has not been provided by us. This is particularly true when it relates to news that might affect our valued team members, as we are committed to informing them first.” 

An earlier story in The Lund Report from 2014 indicated that PeaceHealth launched a plan to boost its core earnings by $130 million during the current fiscal year. It eliminated the equivalent of 500 positions through layoffs and by leaving open positions unfilled, and formed a partnership with The Vancouver Clinic to become more attractive to insurance companies.

Despite this turmoil, the four Oregon hospitals managed by this Catholic health network reported combined profits of $97.4 million in 2014.

Yordy Ousted

Alan Yordy, president and chief mission officer of PeaceHealth, did not step down voluntarily as reported by the media.

He was forced out by his board of directors, following an executive session that was held on September 26, 2014, according to board minutes leaked to The Lund Report.

At that meeting, Yordy was given a transition and severance agreement, and for the next three months was stripped of his decision-making responsibilities, which were handed to O’Brien. He was only allowed to focus on three projects “in the best interest of the company:”

  • Serve on the nonprofit boards of the Catholic Health Association, Premier, American Express Insurance Exchange and United Way;
  • Advocate at the state and federal level as directed by the board chair; and
  • Undertake philanthropy for projects previously approved by the board chair.

At that time, Andrea Nenzel, CSJP, was board chair, and board members included Barney Speight.

From January 2015 until his retirement, six months later, Yordy’s title was changed to president emeritus, and during that time period his role was further restricted and he could only serve on the four nonprofit boards mentioned above.

Yordy lost his position as commander of PeaceHealth, according to confidential sources, because he had been unable to improve its operating margin and oversee the transition to Epic as its electronic medical system. The board was also concerned that PeaceHealth Southwest Medical Center was underperforming.

“The board has determined that the affairs of the company can best be managed by creating a new senior executive position to be called the chief operating officer,” according to the minutes. . They assigned all management operations to O’Brien, "having all PeaceHealth executives who formally reported to the president and CMO now report exclusively and directly to the COO.”

The board thought it was in the best interest of the company to say that Yordy was retiring on his own terms, and the media never questioned its decision.

Yordy joined PeaceHealth in 1981 when it was known as Health and Hospital Services, and spent his last 10 years as president and chief mission officer. According to information that appears on PeaceHealth’s website:

Alan has guided the organization through enormous change. Among his most significant accomplishments: the growth of PeaceHealth Medical Group from 250 providers to nearly 850; construction of Cottage Grove Community Medical Center, Peace Island Medical Center, Sacred Heart Medical Center at RiverBend and a PHMG clinic in Craig, Alaska; affiliation with PeaceHealth Southwest Medical Center; helping to secure funding to improve PeaceHealth Ketchikan Medical Center; and transforming PeaceHealth from a holding to an operating company with the development of a Shared Services Center in Vancouver, Wash. During his tenure, PeaceHealth doubled in size and expanded many services. “Alan has overseen a time of incredible growth while always keeping us focused on our Mission of caring for all in need,” said Sister Andrea Nenzel, chair of the PeaceHealth Governing Board. “He leaves PeaceHealth on very solid footing for the future with our profound appreciation for his leadership, wisdom and compassion over these many years.” Dunne Heads PeaceHealth

Last November, Elizabeth Dunne joined PeaceHealth as president and CEO after serving as a community CEO for Providence Health & Services in California. She had worked at the Renton, Wash.-based Catholic system since 2011.

Since joining PeaceHealth, there’s been speculation about a potential merger between PeaceHealth and Providence Health & Services after Dunne signed a letter of intent to collaborate on a health initiatives project. The health systems intend to open a health and wellness center in Vancouver next year.

But earlier Dunne told the media, “This is not a merger. This is not an acquisition. This is truly a strategic affiliation and partnership in the communities that we are already serving.”

Diane can be reached at [email protected].

This story has been corrected to show the people at Peacehealth who left because of actions taken  by Beth O'Brien. We regret the error.