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Ron Saxton’s Newest Role

More layoffs are expected at PeaceHealth which is struggling financially under Beth O’Brien’s leadership.
April 29, 2016

PeaceHealth has tapped Ron Saxton as interim executive vice president and general counsel. He’s now in charge of government and public affairs at the Catholic health chain.

Until late last year, Stuart Hennessey occupied that position, having joined PeaceHealth in 1989 as legal counsel. But he left the organization last December unable to tolerate working under Beth O'Brien,chief operating officer. 

Saxton ran unsuccessfully for governor in 2002 and 2006, losing the Republican primary his first go-around and was defeated by Gov. Ted Kulongoski on his second attempt.

He’s now a shareholder at Schwabe, Williamson & Wyatt’s Portland office, and had earlier been part of the executive team at global door and window manufacturer JELD-WEN for more than seven years. Saxton’s wife, Lynne, is director of the Oregon Health Authority.

Finances shaky

Since O’Brien joined PeaceHealth, nearly two years ago, the health system has witnessed declining profit margins while many top-level executives have lost their jobs under her leadership despite attempts by PeaceHealth’s board to turn management decisions over to CEO Elizabeth Dunne.

“PeaceHealth is not a force in the Northwest and arguably the most pathetic health system in Alaska, Washington, Oregon, and California,” according to a confidential source inside the organization. “The system is poorly run and makes nearly no money.” 

The profit margins at PeaceHealth aren’t nearly as healthy as shown in the latest The Lund Report article, which analyzed its fiscal 2014 revenues, which were the latest filings available. Charity care also plummeted at PeaceHealth that fiscal year, along with the percentage of patients with commercial insurance and the amount of write-offs associated with health insurers.

When the more recent finances become publicly available, they’ll show that PeaceHealth – with all of its assets – only had a net margin of 5.5 percent when its fiscal year ended last June.

“It may be the best we achieved in a long time, but it’s not something to be proud of,” according to our informant. “Yes, PeaceHealth had a good year overall in 2014, the best since the mid-80's.But the fact that 5.5 percent is the best we've achieved in such a long time is also pathetic. And, it’s not sustainable when compared to other like-organizations, the industry overall, and the reinvestment needs of the company. O'Brien's answer is to cut people, but not her, or her minions, or her consultant followers.”

More Layoffs Expected

More layoffs are coming down the pipe at PeaceHealth – most likely from their medical centers in Bellingham, Eugene and Springfield – even though those facilities are holding their own in terms of profitability. Sacred Heart Riverbend earned a profit margin of 16.69 percent in 2014, the latest figures available, compared to a showing of 7.45 percent the prior year, according to an analysis by The Lund Report.

But these three hospitals continue to subsidize the low financial performance at Southwest Medical Center in Vancouver and St. John Medical Center in Longview and the corporate system office in Vancouver.

“The hospitals in Bellingham and Eugene are being told they need to find more money for the next budget cycle, essentially to cover the costs of the mammoth shared services center in Vancouver under O'Brien's direction, and the continued losses at Southwest Washington Medical Center,” according to our source.

Turmoil at PeaceHealth

An earlier analysis by The Lund Report looked at the turmoil at PeaceHealth and the ongoing litigation by frustrated employees.

Many top-level executives lost their jobs after O’Brien took over, including:

  • Alan Yordy, President, CEO and Chief Mission Officer
  • Tricia Roscoe, Senior Vice President, Strategy, Innovation and Development
  • John Hill, Chief Executive Officer, Oregon West Network
  • Kevin Wahlstrom, Senior Vice President, Chief Financial Officer
  • Ryan Ball, Senior Vice President, Chief Information Officer
  • Dr. Howard Graman, Chief Executive Officer, PeaceHealth Medical Group
  • Sy Johnson, Chief Executive Officer, Columbia Network
  • Kathy Dean, System Vice President, Communications and Marketing.
  • Dr. Michael Murphy, PeaceHealth Senior Vice President and Chief Medical Officer
  • Gordon Edwards, System Vice President of Finance and Columbia Network CFO

Any compensation these departing leaders may have received to usher them out the door will ultimately be disclosed in nonprofit tax filings, but it could take a year or more for these documents to become available.

An internal organization chart shows the scope of the changes: of 15 top PeaceHealth executives listed on the nonprofit’s website, eight are held by people new to those positions within the past two years:

  • President and CEO Liz Dunne
  • COO O’Brien
  • Val Baciarelli, Senior Vice President of Operations and System Services
  • Steve Glenn, System Vice President of Governance, and Chief of Staff
  • Chief Information Officer Dan Hein
  • Chief Nursing Officer Victoria King
  • Nancy Steiger, CEO Columbia Network
  • Interim CFO Peggy Allen.

Diane can be reached at [email protected].

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