Impasse in contract talks has physicians threatening to start their own clinic
RITZVILLE, Wash. – The tiny hospital in this farming town and its two homegrown doctors are splitting up, a move that’s stirring up the community, scuttling plans for a new multimillion-dollar hospital and sparking fears that medical care may collapse in a few years.
More than 300 people jammed a meeting Thursday night to support Dr. Charles “Marty” Sackmann and Dr. Valerie Eckley.
The two physicians said hardball negotiating tactics by the public hospital district’s board threatened their livelihoods and jeopardized their care of patients. Instead of signing a new employment contract, they announced plans to open a private clinic to compete with the hospital district.
The developments have angered this community about 60 miles southwest of Spokane.
Their messages to the five-member board of Adams County Public Hospital District No. 2: “Are you crazy?” “Leave our doctors alone.” “Renegotiate a new contract.”
The board, led by local funeral home owner Kirk Danekas, remains resolute. They want the doctors to see more patients and generate more revenue.
It’s not unusual in any hospital or large clinic to have physicians and administrators at loggerheads. Typically, however, the problems are resolved and patients – and in this case local taxpayers – are spared the consequences.
In Ritzville, however, it’s chaos.
The district has employed six administrators in 10 years. Hospital board elections are hotly contested and turnover is frequent.
Mayor Linda Kadlec, who publicly backed the doctors in a letter to the editor printed this week in the Ritzville Adams County Journal, acknowledges the merry-go-round management has been destabilizing.
“We’ve had our problems,” she said, “and continue to have them. No one in this process is lily white and yes, there are two sides to everything.”
Ritzville police Chief David McCormick is more blunt: “This thing is broken and needs to be fixed.”
Noncompete clause the deal-breaker
The district’s latest administrative installment is Mark Barglof, who previously led the hospital district in nearby Odessa.
The board hired him last year at a $140,000 salary without conducting a search. The community appears to be suspicious of him because he was fired from his job in Odessa, although Danekas and state hospital sources say that move was related to petty politics and Barglof’s own hard-headed decision-making, which clashed with the Odessa board, rather than incompetence or malfeasance.
Barglof has made management changes and hires that have drawn criticism, but it is his handling of the doctor employment negotiations that have put him at odds with the community. He first hired a consultant to draft a new productivity compensation package that would set a lower base salary and then provide an economic incentive to treat more patients every day.
The hospital had become concerned that Sackmann was seeing an average of 12 patients a day. His salary was about $208,000. Eckley had been working fewer hours following the death of her husband last year, and was averaging 6.5 patients per day. Her salary was about $134,000.
Board member Jerry Crossler said the district had hopes that the new pay plan would encourage the doctors to boost patient numbers at the clinic by more than 30 percent and thus collect more revenue.
The doctors knew changes to the pay plan were coming. In a statement read at the meeting on their behalf by consultant Mike Wilson, a former top executive for 21 years at Providence Sacred Heart Medical Center in Spokane, the two doctors “agreed with this change.”
The untenable part of the proposed contract, however, was a noncompete clause drafted by a Seattle attorney hired by Barglof. The clause allowed the district or administrator to fire the doctors with or without cause at any time and prohibit them from seeing patients or practicing medicine within 30 miles of Ritzville.
“Essentially, the physicians were offered the ability to sign a contract, be terminated the next day and be restricted from treating any of you – ever – and forced to leave Ritzville to continue as a physician,” Wilson told the crowd. “They have been dedicated to the community, hospital and the health of every person who sought care from them. Having grown up in this community it was their lifelong dream to return to Ritzville … and give back to the community.”
He then announced the doctors’ intent to open a clinic, possibly within two weeks.
Sam Duncan, owner of Ritzville Drug, called the contract “absurd and unfair.”
“That clause is nothing more than ‘We’re going to get rid of you,’ ” he said. “People in this community won’t stand for it.”
Barglof and Danekas stood by the offer. They called it standard language designed to protect the hospital district.
“Perhaps it’s time for the doctors to run their own clinic as they see fit, and the district to run its hospital as it sees fit,” Danekas said.
Plans for new hospital building shelved
Mayor Kadlec and others fear a competitive showdown between the hospital district and its doctors may cost everyone, especially since 75 percent of Ritzville residents already get medical care somewhere else.
In a statement read by his son, Ritzville resident Lester Snyder cautioned that there cannot be one winner in the dispute between hospital district and doctors. “We must work together.”
The hospital district relies on its doctor-staffed clinics in Ritzville, Lind and Washtucna to collect about $3.5 million of its $5 million in total revenue each year. The remainder comes from the 20-bed hospital.
If the clinics close, the hospital would struggle to pay staff a competitive wage, upgrade medical equipment, pay for malpractice insurance and other costs. Last year alone the district lost more than $650,000, Danekas said.
After the meeting Thursday, he said problems in the district are forcing the board to shelve plans to build a new $12 million to $15 million hospital to replace the 52-year-old East Adams Rural Hospital.
“Right now this building project is off the table,” he said. “You saw this crowd. Do you think they will vote to fund a new hospital?”
At the meeting tempers flared and community members shouted probing questions and tough criticisms at the board, who then answered to rancorous boos and more questions.
After some began making subtle threats of not using the local hospital, board member Joyce Preston wondered why they would want to see their public hospital harmed.
“What’s wrong with you people?” she asked.
Board member Stacey Plummer disagrees with the board’s negotiating strategy, but has failed to convince the other directors to change course.
Left without doctors, Barglof and the board have negotiated with a firm called Coast to Coast Placement to provide several temporary doctors to staff Ritzville’s emergency room and other services.
The doctors will come from Spokane and are led by Dr. Paula Silha, an emergency doctor at Valley Hospital and Medical Center.
The hospital will pay $563,000 over six months for the replacement doctors.
For their part, Drs. Eckley and Sackmann will attempt to operate a clinic where the vast majority of patients are on some sort of government insurance plan – either Medicare or Medicaid. Both programs have been criticized for low reimbursement rates. Even with ample patients, financial success could be elusive.
In most Washington cities, including Spokane, physicians are increasingly turning to hospitals for employment and financial stability.
That arrangement is being turned upside down in Ritzville, and the town recognizes what’s at stake.
“What Ritzville has had is what the rest of rural America would love to have,” said resident Chris Cook.
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