Hospital names interim leadership

In the wake of Kalispell Regional Healthcare President and CEO Pamela Robertson’s announcement that she will step down at the end of November, the hospital system has made arrangements for interim leadership, while the news of the transition — just over a year after Robertson assumed the role — has negatively affected the hospital’s credit outlook.

Kalispell Regional General Counsel William Gibson and interim CFO Tracey Talley will fulfill the president and CEO duties “with the support of the other members of the executive team” once Robertson departs on Nov. 30, said hospital communications director Mellody Sharpton on Thursday. Gibson and Talley will “manage day to day operations of the organization while a search is conducted for the permanent CEO” to replace Robertson, who cited personal reasons in her resignation announcement Sept. 7. She began her tenure at Kalispell Regional last September, following a nationwide search to replace longrunning CEO Velinda Stevens, who died from cancer in January 2017.

Meanwhile, in light of the leadership changes, Standard and Poor’s, a leading credit rating firm, announced Sept. 14 that it had revised the hospital’s credit outlook from “stable” to “negative,” though it confirmed the hospital’s existing credit rating of “BBB.”

A credit outlook change is not the same as a rating downgrade. According to the Financial Times lexicon, a credit outlook indicates the potential for a rating change over the intermediate term, usually between six months to two years. A credit outlook change reflects shifting economic or business conditions, but does not necessarily mean that a rating change is imminent.

In the case of Kalispell Regional, Standard and Poor’s referenced ongoing management changes at the hospital in their new outlook.

“The negative outlook reflects our view of the unexpected departure this coming fall of Kalispell Regional Health System’s CEO and modest internal process-related policies to formalize and standardize industry best practices to ensure operational consistency at all levels of the organization,” said S&P Global Ratings credit analyst Wendy Towber in the announcement on the outlook change. “In our view, the upcoming departure of the CEO, following considerable management turnover this past year, highlights the lack of succession planning and puts further at risk the continuity and stability of the management team, turnaround plan and operations — given the direct and significant effect management practices have on a hospital.”

Robertson’s departure is the most prominent in a series of high-level personnel changes for Kalispell Regional in the past year. In March, Charles Pearce, Kalispell Regional’s chief financial officer of 18 years, resigned to spend more time with family; Tracy Talley, who will now fill in for Robertson, assumed Pearce’s role as interim CFO. Additional departures this year include Ted Hirsch, the senior executive director of Kalispell Regional Medical Center since 1999; Chief Nursing Officer Karen Lee, whose retirement becomes effective Dec. 31; and Dr. Nicholas Costrini, the former program director of the Digestive Health Institute, the $12.9 million facility set to open next month on the hospital’s main campus in Kalispell.

The leadership changes also come at a critical period in the hospital’s development, as several ambitious infrastructure projects reach fruition amid an ongoing federal investigation into the hospital’s physician compensation and referral practices. Besides the Digestive Health Institute, Kalispell Regional is also putting the final touches on its $14 million renovated and expanded ER, and preparing for the opening of the $40 million Montana Children’s Center — designed to make the hospital a regional hub for pediatric care — next summer.

The government investigation stems from a whistleblower lawsuit filed by the former chief financial officer of the hospital’s Physician Network. The hospital has previously said that it set aside $21.5 million in advance of a settlement.

At the time of Robertson’s resignation announcement, the hospital said she expressed “extreme confidence” in Kalispell Regional’s future and that she would continue to advise executive leadership following her departure. Sharpton confirmed Thursday that “Ms. Robertson will continue working closely with the Board of Trustees and executive team on key initiatives.” She could not be reached to specify what those key initiatives entail.

Sharpton also said that the change in Kalispell Regional’s credit outlook does not influence any hospital plans.

Reporter Adrian Horton can be reached at 758-4439 or at ahorton@dailyinterlake.com.