Loudoun Healthcare Inc. announced recently that a $20 million deficit in the last two years will require cost-cutting and a financial turnaround if it is not to sell its not-for-profit Loudoun Hospital Center. In the wake of last week's resignation of Loudoun Healthcare's president and chief executive, G.T. Dunlop Ecker, board Chairman Joseph M. Ramos issued this question-and-answer statement.
Q: What prompted Mr. Ecker's resignation? Did the board of directors vote him out?
A: Mr. Ecker and the board reached the conclusion that a change would be best for all concerned. This was an amicable discussion which resulted in his decision to resign.
Q: When does the board expect to find a replacement? Will this be difficult considering Loudoun Healthcare's present situation?
A: A search for an interim chief executive officer or turnaround specialist is already underway, and several potential candidates have been identified. We expect to find a well-qualified individual, as the turnaround of the organization is underway and our location as the third fastest-growing county in the country will be looked on as an opportunity.
Q: How does this affect the board's stance on the hospital's turnaround?
A: Mr. Ecker's resignation does not affect the board or management's commitment to the financial turnaround of Loudoun Healthcare. The board remains fully committed to the continued operation of Loudoun Hospital as a community-based, not-for-profit hospital.
Q: What role does Michael Rindler [a consultant hired by Loudoun Healthcare to help in the initial turnaround effort] now play?
A: He continues his present role developing a cost reduction plan, which will be presented to the board within 30 days.
Q: Do you anticipate other resignations or terminations from senior management?
Q: What role did the medical staff have in Mr. Ecker's resignation?
A: The medical staff is an integral part of the hospital, and their input is sought, and respected, as always, in all important issues of the board.
Q: What about this rift between Michael Rindler and the board?
A: There is no rift. This is the time for the board, the trustees, the medical staff and the administration to demonstrate leadership. There will always be different points of view in any situation like ours, but we view this as healthy and constructive. We are unified in our commitment to remain a community-controlled, not-for-profit hospital. We are equally committed to our mission of providing compassionate care accessible to the entire Loudoun community.
Q: Will the integrated physician practices be sold back to the doctors?
A: There are no plans to sell the practices back to the physicians. Our focus in on making them profitable. If that can't be done, we will look at all alternatives.
Q: Has Loudoun Healthcare accepted a loan from Inova [Health System]? If so, what are the terms? Is Loudoun Healthcare talking with Winchester and other systems?
A: Negotiations are ongoing with several potential creditors. We believe it is inappropriate to comment on these prior to being finalized.
Q: Who will be running the hospital after Ecker leaves [Aug. 1]? Is the board taking a more active role in the day-to-day operations now?
A: The board is meeting biweekly and more often as needed and is taking aggressive and decisive actions. It will be more directly involved in monitoring the management activities of Loudoun Healthcare from this point forward.
Mr. Ecker is in the position of president and CEO until Aug. 1. Senior management will manage the day-to-day operations of Loudoun Healthcare until a new CEO arrives. The selection process has begun, and we expect to have a person in that role in August.
Q: What is the current progress on the turnaround efforts for the necessary $12 million, and the $5 million for the integrated physicians' group?
A: Six teams of Loudoun Healthcare directors and managers and a physicians' group are meeting frequently to evaluate cost-savings steps for Loudoun Healthcare's turnaround process. They are well on their way toward identification of our targeted goal. Management will report to the officers of the board from 8 a.m. to noon each Saturday with their progress toward accomplishment of these cost-reduction measures.
Q: Will a layoff be necessary to enact the cost-savings? If so, how many employees will be affected?
A: Before a reduction in staff is considered, all aspects of the organization are under review for potential cost-savings. We hope to achieve most cost-savings in that manner; however, elimination of some positions will accompany restructuring in some service areas. Patient care will be maintained at our current high levels of quality and patient satisfaction.
Q: Will Loudoun Healthcare be closing some of its affiliates? Is the Cornwall campus to be sold? If so, how does that affect Shenandoah University [which operates there] and the county's proposal [to develop the site]?
A: At this point, we are evaluating all options. We received 13 proposals in response to a request for proposal inviting interested parties to offer their ideas for the redevelopment of the Cornwall Street campus [site of the old hospital]. We are open to ideas on lease, joint venture, partnerships as well as sale. We are reviewing four very attractive proposals, as well has having discussions with the County of Loudoun. Shenandoah has a lease agreement with Loudoun Healthcare for its space at Cornwall.
Q: Would it be possible for the county to loan Loudoun Healthcare the necessary funds?
A: Loudoun Healthcare has not requested financial support from the county government nor does it anticipate doing so.
Q: When can the community anticipate an announcement on the hospital's future?
A: Within the coming weeks, updates will be made available on the status of the financial turnaround and on the search for a new CEO. Loudoun Healthcare invites the community to contact us with your questions and concerns.
To get in touch with Loudoun Healthcare, write to Linda Roberts, community relations, P.O. Box 6000, Leesburg, Va. 20177 or call her at 703-771-2850.