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The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

Nelson to run Empire Health hospitals


Nelson
 (The Spokesman-Review)

Empire Health Services has appointed a new chief executive officer to lead turnaround efforts at Deaconess Medical Center and Valley Hospital and Medical Center.

Jeff Nelson, 49, will oversee the large Spokane hospitals for one year — a period in which he is expected to adopt and implement a wide-ranging new business directive designed to heal the financially troubled nonprofit organization.

“We have hired someone with outstanding references … he’s someone who we think can come in here fresh, without baggage, and make Empire strong,” said board chairman Mike Taylor.

Nelson comes to Empire from Atlanta-based Tatum Partners Inc.

Tatum is a company made up of financial professionals who parachute into leadership posts at companies that are losing money, struggling with executive turnover, ownership changes or other problems.

His assignment at Empire is part change agent. Deaconess and Valley lost more than $7.5 million in the first six months of the year. The hospitals already have laid off hundreds of employees, cut wages and closed programs during the past couple of years in an effort to stem their losses.

This year, the board hired consulting company PriceWaterhouseCoopers LLC to find new sources of money, identify billing problems and cut costs.

The PriceWaterhouseCoopers initiative is ongoing and Nelson has been asked to quickly put it in place and stabilize Empire’s finances, Taylor said.

Nelson was unavailable for an interview Tuesday.

His background includes work with numerous hospitals and other health care businesses in Minnesota, Maryland, Texas, Illinois and elsewhere.

Among his jobs this year will be dealing with a newly unionized work force.

Most of Empire’s 2,300 employees now belong to Service Employees International Union 1199NW. The powerful West Side union organized employees this year and eagerly awaits contract negotiations.

“What the employees really need right now is a sense of stability,” said Diane Sosne, president of the union. “I think we would welcome somebody who can come in and provide real direction and leadership in turning things around.

“Everyone – our employees and the community – has a vested interest in helping these two hospitals succeed.”

She said the union is ready to work with management on a contract.

Nelson replaces Garman Lutz, who resigned recently after 14 months at the helm. As the organization’s former chief financial officer, Lutz oversaw Empire at a turbulent time of pay cuts and troublesome, industry-wide trends including more uninsured patients and a spike in charity-care cases.

Taylor said that within a year the board expects Nelson to make the necessary changes to put Empire on a profitable track. He said the board dismissed ideas to sell one or both of the hospitals to another nonprofit such as Providence Health Care, which operates Spokane’s leading health care provider, Sacred Heart Medical Center, or to a for-profit hospital group.

“We considered it and rejected it,” he said.

Empire declined to say how much Nelson will be paid.

While acknowledging that any change may be unsettling for employees, Taylor anticipates Nelson will strengthen Empire’s core services, among them: cardiology, oncology, orthopedics, emergency medicine, neonatal intensive care, and its mother-baby unit.

“Within a year you’ll find us stronger, more fiscally sound, and a strong health care partner with Spokane,” he said.