By Delcenia Cosman

Homer Independent Press

A citizen initiative to change the South Peninsula Hospital operating board selection process has invited scrutiny of the hospital’s governance structure as some community members call for increased accountability and meaningful reform. 

Local realtor Chris Story raised the issue in a July 19 blog post after airing multiple podcast episodes in which he publicly shared grievances with the end-of-life care received by his mother, Lynn Story, at SPH in June. He said his family is asking SPH for improved responsiveness to community and patient concerns, as well as more transparency in how decisions are made by hospital leadership. To that end, he also posted a draft resolution proposing that the operating board of directors be elected by hospital service area members and that the board comply with the Alaska Open Meetings Act.

Currently, individuals interested in serving on the operating board must submit an application and complete an interview process with the board’s Governance Committee board members. If appointed by the board, new members serve three-year terms. 

The operating board holds public meetings on the last Wednesday of each month. During a community Q&A session last Thursday, which more than 160 people tuned into on Zoom, chair Aaron Weisser said the board also holds periodic executive sessions, which are not open to the public.

“Executive sessions can be for a number of reasons — they can be committee meetings, they could be informational sessions or educational sessions. That happens because there is a significant protected class of information,” Weisser said. 

In general, executive sessions take place when discussions pertain to sensitive or confidential information. Weisser highlighted some such matters specific to the hospital, including personnel discussions, credentialing, patient care, legal advice and strategic planning.

“There are components of these that require us to be able to operate in executive session … but all of the official actions of the board are required, as per our operating agreement, to occur in the open session,” he said.

In his draft resolution, Story argues that South Peninsula Hospital is a publicly owned facility and, therefore, service area members should be able to elect the hospital’s governing body.

CEO Ryan Smith said it was a “legitimate discussion.” During last Thursday’s Q&A, he walked listeners through the hospital’s ownership and governance structure.

South Peninsula Hospital sits on land owned by the City of Homer, but its assets, including the building, are owned by the Kenai Peninsula Borough. Medical services are provided by South Peninsula Hospital Inc., the nonprofit that operates through an agreement with the borough. Smith said that the borough assembly is “really the decision maker for our organization” and is responsible for major capital purchases, maintenance, master facility planning, and funding existing and future infrastructure needs.

The 11-member operating board is responsible for the hospital’s day-to-day operations and acts as an advisor to the borough on major capital asset and maintenance needs.

Because the hospital receives funding from property tax dollars to support service area operations, SPH also has a nine-member elected Service Area Board that advises the borough mayor and assembly on spending those tax dollars. Smith noted during the Q&A that service area board members were originally appointed by the assembly when the board was first formed. The change allowing SAB members to be elected by residents in the hospital service area came about in 1973. 

The CEO is hired by the operating board and is in turn responsible for hiring the hospital leadership team and working with it and the medical staff to manage the hospital. 

“It’s a little bit of a unique structure, and one we like to talk about because when people have issues relative to the hospital, we like to be able to point them in the right direction of who can actually influence the action that the constituent might want to take,” Smith said. 

In a follow-up conversation on Tuesday, Smith said that as a 501(c)(3) board, it’s normal for current board members to elect new members, rather than going through a public election process. He also said the path to changing the operating board to an elected board may not be so simple as changing the articles of incorporation or the SPH Inc. bylaws. Instead, the borough would likely need to terminate the operating agreement with SPH Inc. and then decide whether to make the Service Area Board the operating board or create a new elected or appointed board.

“(SPH Inc.) was incorporated a certain way with certain bylaws. I’m not saying it couldn’t happen, but it would be highly irregular for a 501(c)(3) board to become an elected board. There would be different paths to get to an elected board,” he said.

The borough attorney did not respond to a request for confirmation of this information before press time. 

The operating agreement does contain provisions for termination of the agreement by either the borough or SPH Inc. on grounds such as breach of terms, inadequate staffing or financial loss. The borough also may terminate the agreement if dissatisfied with the hospital’s performance and if the hospital takes no remedial action in a timely manner. Borough termination of the agreement would require approval from the assembly through a resolution. 

“None of those things are currently on the table,” Smith said. “In other words, we’re meeting the performance expectations of the agreement.”

The current agreement is in effect through Dec. 31, 2029. If it is not terminated by Dec. 31, 2028, Smith said, it will automatically renew for another five years.

SPH Service Area Board Chair Francie Roberts said Wednesday that the SAB will not vote on the draft resolution at the upcoming meeting on Aug. 13, but it will discuss whether to bring the draft forward in September. If the SAB advances the resolution, or a revised version of it, it will go to the borough assembly.

Assembly member Willy Dunne, who represents the Southern Kenai Peninsula, read Story’s draft resolution and said it “contains some interesting ideas that are certainly worthy of public discussion,” and he looks forward to hearing what the SAB and the public have to say. 

Assembly member Kelly Cooper, who represents Homer, did not respond to a request for comment before press time.

Homer Independent Press did not receive responses to follow-up questions posed to the operating board before press time. 

The SPH operating board next meets at 6:30 p.m. on Aug. 26 in the hospital conference room and via Zoom.