Three Rivers hires embattled Graham

New CEO’s salary set at $180,000 plus benefits

— Three Rivers Hospital officially has a new administrator.

Hospital commissioners unanimously approved a resolution, 3-0, to hire embattled J. Scott Graham as the new CEO during Monday’s board meeting at a salary of $180,000 per year, plus benefits.

Commissioners Cherryl Thomas and Michael Pruett arrived after the resolution had passed.

The Chronicle requested a copy of Graham’s contract last week, but hospital officials refused to provide it prior to Tuesday’s press deadline.

After the vote, Graham and now-former CEO O.E. “Bud” Hufnagel traded badges amid laughter and applause. Until Monday, Graham had been paid $3,461 per week for about two weeks as the hospital’s transition adviser.

Threatening to sue Coulee Medical Center, Graham had left his previous job there as the top administrator April 10 following months of controversy between the board, the hospital physicians, community members and himself.

“I would like to thank the board for their vote of confidence in bringing me on,” Graham said later in the meeting.

Hufnagel, who was previously listed also as a principal in Seattle-based CareSync Consulting, had personally informed Graham of the job opening.

Retiring Thursday morning, Hufnagel reflected on his nearly three years at the helm after the Monday vote.

“Clearly, we are in a far better place today than we were three years ago,” he said. “When I got here, Medicare was getting ready to close the hospital. We were under a 10-day closure.”

Hospital employees rallied to save the hospital from closing, he said.

“To that, I’m very proud of the fact that the hospital has been given a number of significant quality awards since that time,” he said. “There’s no question about the fact that there’s still a lot of work to be done, but I feel good about where this place is. I feel particularly good about Scott coming in here. I think the hospital is in a real good place and has a good opportunity to move forward and do all the things that you need and want to do.

“The folks of this hospital have been extraordinary to work with.”

He noted warrants with Okanogan County had been paid down to $1.6 million as of last week, about half of what the hospital owed at its peak indebtedness.

“That’s the lowest they’ve been in over three years,” he said. “The first quarter of this year is the best quarter we’ve had in years, and we’re in the black instead of the red, and that simply hasn’t happened in anytime recently.”

Chief Financial Officer Jennifer Munson said with the upcoming income from property taxes and a few other cost-saving measures, Three Rivers could be down to just over $1 million in debt at the end of the month.

Munson along with a few other employees thanked Hufnagel for his work and assistance.

“I feel deeply honored to be able to follow in his very capable footsteps,” Graham said. “Cutting the warrants in half in the amount of time that he’s been here takes a huge amount of energy and effort and sustained persistence.”

Graham reviewed his first two weeks at Three Rivers, which included seeing the hospital sign a contract with Merritt Hawkins to recruit new physicians.

“That’s going to affect some of the expenditures that we have because it’s expensive to recruit physicians, so you’ll see some of that reflected in the future financials,” he said.

In a previous meeting, Hufnagel had recommended the hospital look into hiring two or three general practice physicians with experience in obstetrics. He estimated it could cost as much as $30,000 to recruit each new hire.

Graham said he’d like to implement “safety rounding” – taking a tour of facilities and departments with one or two commissioners to learn more about what safety measures the hospital has in place to protect patients and employees, as well as find out what could be improved.

He also weighed in on last week’s first county-led hospital committee meeting.

“I think they (county commissioners) have a better sense… of the next steps for this committee in determining how we all might work together to improve each other’s outlook and improve the financial viability of the hospitals,” he said. “One thing that was made clear by the chairman of the county commissioners is that they are not there to combine hospitals into one hospitals. They are there to help make sure the three hospitals are financially viable.”

In other business, hospital commissioners rescheduled its next board meeting to 4 p.m. June 30 at the Hillcrest Administration Building, 415 Hospital Way.

They also decided to indefinitely table the discussion about the labor and delivery department.

“I am still working with Dr. (James) Wallace and I did have a meeting with him last week,” Chairwoman Vicki Orford said. “We did come up with different ideas and different suggestions,” such as classes for new mothers and their babies, a babysitter training course and more.

A committee of six or seven members will be assembled to review ideas and come up with ways to fund them. Orford mentioned seeking sponsorships from major companies such as Huggies and Johnson and Johnson. She said the goal is to make the department break even.

“It’s going to keep moving forward and we will keep working with what we’ve got. We’ve got some other ideas, and OB is alive and kicking,” she said.

“It’s still a priority of the board,” Pruett said.

Tretwold offered $500 to get the programs started through his own business, Harmony House Health Care Center.


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