The Eureka Springs Hospital (ESH) Commission has indicated it will not pursue Dr. John House’s proposal to take over management of the hospital that is in turmoil after firings and resignations of a large percentage of its staff.
CEO Angie Shaw and Chief Nursing Officer Jessica Petrino were fired in early November 2024. The commission has given no explanation for their firings. After Shaw’s firing, a dozen employees signed a letter to the commission outlining numerous allegations of misconduct by chair Kent Turner, vice-chair Barbara Dicks, Chief Financial Officer Cynthia Asbury and HR Director Jodi Edmondson. The commission responded by firing one of the people who signed the letter, Petrino, putting Asbury on a 60-day employee improvement plan and promoting Edmondson to interim CEO. Half of the employees who signed the letter no longer work at the hospital.
After seeing the turmoil, House, a former medical director and commission chair, submitted a letter of intent to manage the hospital. At a Dec. 9 workshop, commissioners dissed House’s offer. Turner said that House’s LOI was not detailed and that they would have to go through negotiations. Turner said House basically wanted complete operational and management control while leaving the city on the hook for expenses, and House didn’t consider the fact that the hospital building is owned by the city.
Sandy Martin, then commission vice-chair and now chair, said she thought House did understand that and that was why he wanted maintenance to be the city’s responsibility. Turner questioned how the city could be responsible for maintenance if it didn’t have oversight, and Asbury questioned what House expected to get out of managing the hospital.
Martin said House’s proposal was premature with everything the hospital commission has been doing. She said that, to her, it was not up for discussion.
“It would be starting from scratch,” Martin said. “We have made so much progress, and the staff we have now is higher caliber than we have ever had and more knowledgeable. We’re getting sort of used to the REH (Rural Emergency Hospital) model even though the REH model isn’t completely defined yet. I just think we need a little bit more time before we entertain anything because, to me, we are doing everything possible. The management company would just create more chaos and turmoil and, unfortunately, it would disrupt the staff and interrupt our culture.”
Other commissioners agreed.
House wrote in an email to the Independent that in his LOI, he did say the city “will keep all fixtures, equipment, appliances, computers, etc., in good working order and any maintenance contracts in place. It’s not clear from the LOI, but my intent there was to ensure that the city keeps everything in good working order until a management contract is in place and executed, not for them to do it indefinitely. Obviously, if my company is running the hospital, it would also be responsible for maintenance.
“I’m surprised that with the corporate and business experience of several members of the hospital commission that they do not seem to understand that a LOI is simply an agreement to pursue negotiations toward a contract. It neither binds the city to a contract, nor does it preclude changes to any item mentioned in the LOI. It’s merely an agreement that we are going to move ahead with discussions.
“I have resolved myself to the idea that the commission is intent on running the hospital itself despite ample evidence that, so far, they have not been doing a good job at all. I wish them the best of luck.”
Former hospital staff and members of the medical community conclude that commissioners have gone beyond the traditional oversight duties and are micromanaging, acting like hospital employees.
The firings of Shaw and Petrino and loss of ER Manager Joy Kennedy coincided with an audit of the hospital by the Arkansas Department of Health and the Centers for Medicare and Medicaid Services. In the 2.5 months since the first firings, the hospital has struggled to satisfy auditors even after spending thousands on a Little Rock attorney to assist.
Former employees said the deficiencies were not as serious as it seemed from the audit report because a lot of the failings were a result of having lost clinical staff with the knowledge of how to answer the highly technical audit. The hospital must correct deficiencies, or it could lose its Medicare agreement, which would likely cause closure of the hospital. A response from the auditors is expected this week.
Dicks, who Kennedy said was bullying her the same day Petrino was fired, was later asked to resign by Mayor Butch Berry, but Berry blocked the resignation of Turner that was requested by alderman Harry Meyer at a council meeting in December. Berry said Turner, a real estate agent, was needed to manage the Medicare audit.
Petrino and Shaw filed lawsuits alleging they were fired for being whistleblowers about HIPAA violations at the hospital. On Dec. 9, the commission discussed alleged commissioner violations of HIPAA patient privacy laws with one commissioner stating the opinion that “the governing body does have the right or it’s part of their oversight duties to view medical records and it is not a HIPAA violation. But that language is nowhere spelled out in any record I’ve ever seen.”
The ER is currently on trauma divert, meaning ambulances carrying trauma patients are bypassing the hospital because blood products are not available. The lab is not currently fully functioning. Former Lab Director Tina Adams told city council that the new hospital IT company doesn’t know how to interface with the laboratory reports.
At the commission meeting Jan. 20, Edmondson said the laboratory should be fully functioning by the end of the month and there will be no more need for diversion of patients. CFO Asbury reported a loss of $132,000 for the previous month, which she attributed to a decline in use of the ER.
Edmondson said at the recent hospital commission meeting that three nurses have been staffing each shift at the hospital, contrary to reports that often only one nurse is on duty, and that travel nurses are often not showing up.
Concerned former employees and other members of the community have requested that Turner and Dicks be removed from the commission, and that Edmondson and Asbury be fired. But the hospital commission has stood firmly behind those three and has made no visible effort to address allegations of bullying, lack of adequate patient supplies, harassment and violations of FOIA and HIPAA patient privacy laws.
At end of the meeting Jan. 20, chair Martin said, “Cynthia and Jodi have done a wonderful job.”
Eureka Springs City Council has the hospital issues on the Jan. 27 meeting agenda