On January 29, 2010, the North Shore Hospital board of directors approved a management services agreement with St. Luke’s Hospital of Duluth. The contract will be effective March 1, and the board hopes the arrangement will help them find a new hospital administrator.
Current administrator Diane Pearson gave her notice months ago but will stay on until at least July 1 when it is hoped her replacement can get on board. St. Luke’s and North Shore Hospital are “trying to work together,” Pearson said in a February 16 phone interview. “We know we want an administrator here.”
According to Pearson, the new administrator’s role will be the same as her role has been with hospital employees and the local public. North Shore Hospital will have access to the expertise of the St. Luke’s management team, however, an arrangement expected to bring resources that can help “secure the future of the organization,” Pearson said.
The contract does not address the possibility of accessing St. Luke’s purchasing power to buy supplies at cheaper rates, but North Shore Hospital is already part of a group purchasing entity. “Going forward,” Pearson said, “there may be all kinds of opportunities for us to look to St. Luke’s for those types of arrangements.”
When asked if she consulted with other hospital officials without the formal arrangement that will now be in place, Pearson said, “I have always felt a very open, sharing relationship with administrators at a lot of facilities. I talk regularly to my peers. I don’t know of any administrator that really does it on their own. …The world of health care is much more complex than it was 20 years ago. We all need the support of our peers and the support of experts and consultants.”
What does Pearson think of the management services agreement? “I think it’s a good move for us,” she said. “It’s really very difficult for an organization like ours to stand alone. Health care is such a complex field that you really need to pull in resources wherever you can.”
North Shore Hospital will pay St. Luke’s 103% of the amount of the new administrator’s salary and benefits.
When asked whether she sees any disadvantages to the arrangement, Pearson said, “I think with any new relationship, you do your best to anticipate, but I don’t know of any that I can identify today. I think it’s really dependent on our board and the folks at St. Luke’s to make it work.”
The agreement between the two hospitals states, “The parties acknowledge that St. Luke’s, in performing the management services, will make executive decisions designed to increase the productivity and efficiency of the hospital and designed to result in smooth and efficient day-to-day and long-term operations of [North Shore] Hospital.
“Although the administrator shall be an employee of St. Luke’s, the administrator’s loyalties are expected to lie with [North Shore] Hospital.
“…[North Shore] Hospital and its board of directors shall give reasonable consideration to all directives and initiatives recommended by the administrator and shall provide a full and complete explanation to St. Luke’s of its reasoning and rationale for declining to implement or comply with any such recommendations.
“…All matters requiring professional medical judgments shall remain the responsibility of the [North Shore Hospital] medical staff and its allied health professionals. St. Luke’s shall have no responsibility whatsoever for such medical judgments.”
The job description for the new administrator calls for the administrator to have at least a bachelor’s degree with specialized training in hospital administration, licensure as a nursing home administrator, and experience in hospital administration. He or she will be expected to maintain a management philosophy “more participative than controlling or directing” and “a personal approach seen as open and communicative while yet recognizing the necessary organizational channels.” He or she will be expected to approach his or her relationship with the medical staff as a partnership, possess financial expertise, and demonstrate communication and public relations skills.
“The administrator’s effectiveness in the organization will relate to her/his abilities to bring together all elements of the organization into a team effort,” the job description states. “This individual must be the catalyst for the creation of long-range plans for the organization and the short-range implementation of programs to achieve those plans. The administrator should be results-oriented and must establish and maintain the significant personal relationships that are important and must exist with the medical staff, community, board and personnel.”
Hiring a new administrator will be a joint effort between the two hospitals. Representatives from St. Luke’s management team have begun the process with the North Shore Hospital Board’s search committee.
Pearson said she does not know what she will be doing after her job at the hospital is done. “I’ve been putting my energy into doing my best job while I’m here,” she said.
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