St. Charles Health System CEO steps down

St. Charles Health System CEO Joe Sluka is stepping down after eight years at the helm of the regional hospital system. The move was not entirely unexpected, given the recent news of the financial crisis in which Central Oregon’s only hospital chain finds itself (see “Perfect storm engulfs St. Charles,” The Nugget, June 22, page 1).

St. Charles operates four hospitals, one each in Bend, Redmond, Madras, and Prineville.

Sluka cited the challenges of the pandemic and the financial fallout from that effort at St. Charles Health System as reasons for stepping down.

The separation appears to be cordial and at the decision of Sluka, with Board Chair Jamie Orlikoff telling local media outlets: “This was his decision, his call. He’d been kind of deliberating this. He told me he has never quit anything in his life. But after going on vacation to step back and reflect, Sluka decided it was time to step down.”

Orlikoff said that Sluka had served “about double the average tenure” of hospital CEOs.

The American College of Healthcare Professionals found that the average tenure of a CEO was about five years, and just over half (51 percent) had previously been a CEO at another hospital. When it came to why they left their position as CEO, about two-thirds said the decision to leave was entirely or mostly their own decision.

The majority of CEOs perceived that community relations, medical staff relations, hospital culture, and employee morale suffered as a result of their departure. On the other hand, 60 to 73 percent felt like turnover improved financial performance, employee morale, medical staff, board and community relations, and hospital culture when they took over as CEO.

Sluka will remain in an advisory capacity to St. Charles. He won’t endure any financial loss from the decision, however, keeping his current salary, according to spokesperson Lisa Goodman.

“If Joe wanted to stay, he’d be the leader,” Orlikoff said. “No one is happy anywhere in health care. We were seeing a generational turnover among baby boomer CEOs prior to the pandemic, but we anticipated this. The pandemic has significantly accelerated this.”

The severity of the system’s financial health forced it to lay off 105 caregivers and freeze 76 positions in May. More than 300 providers announced plans to form a union called Central Oregon Providers Network. Hospital executives have said the layoffs came as a result of the pandemic, but union organizers have claimed financial mismanagement at the hospital stretching back to before COVID-19.

“St. Charles made what we consider very poor decisions before and during the pandemic that put our health care system in this terrible financial crisis,” said Dr. Joshua Plank, a hospitalist at St. Charles.

The proposed union would consist of around 300 physicians, nurse practitioners, physician assistants, and other health care workers. Organizers said an election to approve the union is expected soon. The pending union issued a statement last week noting St. Charles had asked the National Labor Relations Board to dismiss its petition for an election.

That wouldn’t be the first union at St. Charles. Technical workers and the hospital entered into a collective bargaining contract in 2021 following a strike.

Dr. Steve Gordon, an experienced health care executive and former member of the St. Charles Board of Directors, will serve in the interim CEO role as Sluka transitions to what the health system called “a strategic advisor position.”

Orlikoff said St. Charles “lucked out” with Gordon agreeing to take over as interim CEO. He added that Gordon has no interest in the permanent job.

Gordon is a primary care and internal medicine physician by training and worked as a health care management consultant with Point B, Inc. since 2016. He has served in executive leadership roles for PeaceHealth in Vancouver, Washington, Providence Health and Services in Portland, and Salem Health. He is a graduate of Harvard College, Harvard Medical School, and Harvard Kennedy School of Government.

“We thank Joe Sluka for his service and wish him well in the next chapter of his life,” said Joel Hernandez, a registered nurse at St. Charles and Oregon Nurses Association board member. “He led St. Charles during an important period of expansion and change and helped build upon our reputation as an outstanding community hospital and health system.”

Former board member and state Rep. Knute Buehler said that Sluka’s retirement presents a further challenge for the hospital system.

“This is a very perilous time for St. Charles, with ongoing labor strife, poor physician relations, a deteriorating financial condition, and now key leadership changes,” Buehler said. “A turnaround is needed, which will require a transformational leader or being acquired by an outside health system due to the complexity of the problems.”

A nationwide search is underway, but prospects are few and despite high rankings for quality of life in Central Oregon, fast trackers and high achievers on the career ladder may be more likely to look for openings in larger markets or hospitals closer in proximity to medical universities or prestige specialties.