NSH board talks fiduciary duties, moves forward with culture survey, and shares successes of the scholarship program and lab inspection

The North Shore Health Board met on Thursday, Jan. 18, to discuss various agenda items, including fiduciary duties & open meeting law, December 2023 financials, election of officers, and an update on the scholarship program, among other things. Approximately 12 members of the public attended the meeting. 

Before the public comment period, Matt Anderson from Atrede Consulting delivered a presentation to the North Shore Health (NSH) Board on the fiduciary duties and open meeting laws applicable to district hospital boards. Anderson outlined three categories and associated duties: duty of care, loyalty, and obedience. He discussed at length each category and fielded questions from board members and the public during the presentation. 

While Anderson provided a handful of duty of care examples, he said the board’s primary role is to serve in the best interest of the organization and “to oversee and govern the organization, primarily by delegating authority and responsibility to the CEO.”  

The primary duty of loyalty is to maintain confidentiality and adhere to conflict of interest policies. In regards to obedience, Anderson said, “That gets more complicated.”  

“The duty of obedience means that the organization has a particular mission. You have to be obedient to that mission. Meaning, the actions, the decisions you make, the way you go about your business as a board is to further and advance the organization’s ultimate mission,” he said. 

Members of the public asked questions regarding the role of the board chair, the process of executive sessions, and the management agreement with St. Luke’s in relation to the board’s duties.

Find the full copy of Matt Anderson’s presentation slides for ‘District Hospital Boards: Fiduciary Duties & Open Meeting Law’ here. 

Following the presentation, two members of the public, Rovena Claxton and Gregg Westigard, spoke during the public comment period. Claxton, a Concerned Citizens for Cook County Healthcare (CCCCH) representative, read a prepared statement aloud. 

In the statement, Claxton acknowledged the board’s efforts to move forward with a culture assessment and employee engagement survey and broaden the strategic planning assessment to include physician feedback. “We are pleased to see the beginnings of these efforts, and we have stated from the beginning of our public comments to the Board, we wish to work with the Board in a non-adversarial and collaborative manner if at all possible,” Claxton said. 

In the statement, Claxton also acknowledged CCCCH’s concern with the board’s ongoing closed-session meetings to explore litigation for damages related to defamatory statements made against the hospital. “The mere concept of a publicly-elected board suing community members for defamation is stunning. And continued closed sessions in counsel with an attorney regarding this concept is an alarming use of public funds.”

Since early Dec., the NSH board has held three closed sessions to explore litigation for defamatory statements made against the hospital. The Jan. 18 closed session agenda stated, “proceeding with a lawsuit for damages related to defamatory statements made against the hospital.” The board has not publicly indicated whether it is pursuing litigation against community members, the press, or other individuals. 

Westigard spoke next, requesting the board and NSH provide improved public access to the complete NSH meeting agenda packet via the NSH website. Typically, NSH provides a one-page agenda on the website rather than the full agenda packet with supplemental information. 

The NSH Board then discussed and reviewed an in-depth look at the December 2023 financial reports presented by Chief Financial Officer Lori Ericson. The board discussed the financial challenges NSH is experiencing, similar to other rural hospitals across Minnesota and the nation. In addition, the board and administrators talked about the complexities of insurance and Medicare and the downward trend of inpatient care nationally.  

During the meeting, Greg Ruberg, the president and CEO of Lakeview Hospital in Two Harbors, said, “We’re just not seeing the swing bed volumes that we’ve seen in the past. And I think number one is insurance restrictions are pushing a lot of that.” In comparison, Ruberg said, outpatient visits in various facilities are increasing. “So that trend, we’re watching closely.” 

Ruberg said, “Most rural hospitals around the state and the country are focused on, to survive, you need to shift to an outpatient model primarily.”

After much discussion, the board moved on to the organizational review agenda item.

NSH Administrator Kimber Wraalstad summarized recent correspondence with the National Rural Health Association (NRHA). The NRHA recommends that NSH utilize the services of Stroudwater Associates to conduct a strategic, financial, and operational assessment of the hospital, including an evaluation of physician services and the relationship with Sawtooth Mountain Clinic. 

The NSH board discussed moving forward with an organizational review during the Dec. 5 special meeting. The board unanimously approved to move forward with Stroudwater Associates to conduct the organizational review. 

The board also decided to move forward with a separate organizational culture assessment for NSH with Bill Auxier, the National Rural Health Association program director. The scope of the cultural assessment involves a four-step process and spans 12 months. The process utilizes stakeholder-centered team coaching and an evidence-based coaching process, combining workshops, executive coaching, and assessments. 

“Because this was something that we have discussed at our strategic planning to go ahead and do something with culture, and because this is something that community has brought to us, I would like to move that we get started with Bill so that we can get that on board and get that going,” Board Chair Kay Olson said. The board unanimously agreed. 

“I think it’s important to note, too, that both of these organizations that we’re talking about are completely independent of anybody on board,” Board member Randy Wiitala said. “Or the management or administration.”

The board undertook a few final tasks as the nearly three-hour meeting wrapped up. The board re-appointed Kay Olson as board chair, Mary Sanders as clerk, and Randy Wiitala as treasurer. 

Wraalstad reported the findings from the Dec. 21-22, 2023 Clinical Laboratory Improvement Amendment (CLAI) inspection. Every two years, the laboratories undergo an inspection. Wraalstad said the NSH lab passed with flying colors, with the inspector commenting that she “has no concerns about the quality of testing in this Lab.”

Wraalstad also provided an update on the NSH scholarship program. In August 2021, NSH developed an educational scholarship/loan program to recruit and retain employees in healthcare positions. Tuition, books, fees, and expenses, up to $7,000 per year, are paid in return for an agreement to work at NSH. Currently, four employees are participating in the scholarship program. Two are in the nursing program, and two are in the paramedic program. 

After working through the agenda items, the board adjourned the meeting. Then, the board returned to a closed session. 

During the closed session, the board discussed legal strategy for responding to threatened litigation against board members. 

The board also discussed proceeding with a lawsuit for damages related to defamatory statements made against the hospital. 

The closed session also included discussions, decisions, recommendations, deliberations, or documentation of a review organization. In addition, the closed session allows the board to discuss contracts. 

Olson told WTIP that the board’s attorney is Timothy Feeley with Hall, Render, Killian, Heath, and Lyman, P.C. Feeley is based in Milwaukee, WI. 

Find the full Jan. 18 NSH board meeting agenda packet here. 

Kalli Hawkins January 19, 2024