LANCASTER — The Antelope Valley Healthcare District and Antelope Val­ley Hospital, Inc., will pay nearly $1 million in sev­er­ance packages to former An­tel­ope Valley Hospital CEO Michael Wall and Chief Financial Officer Co­lette Nichols, after the district determined it did not intend to ter­min­ate either contract for cause as stipulated in their contracts and both resigned.

The executives’ res­ig­na­tions were announced Nov. 20, after they had been placed on paid ad­min­is­tra­tive leave in October by the elected boards which govern the hospital and its operations.

During the district’s board meeting on Wed­nes­day, Board President Kris­tina Hong announced the district “did not intend to terminate for cause with­in the language of the contract” for Wall and Nich­ols.

In both contracts, items that would be cause for termination in­clude conviction of felony or misdemeanor, embezzlement of funds, willful failure to provide services and fraud. Wall’s contract also stipulates as cause for termination acts of dishonesty, intentional misrepresentation or other such acts.

Wall and Nichols were placed on paid ad­min­is­trative leave Oct. 17, while investigations continued into alleged improprieties, the exact nature of which has not been disclosed by either board, either publicly or with Wall and Nichols, they said.

One of those inves­tigation has concluded and the second is no longer proceeding and reached no conclusion, Hong said.

No details in either investigation have been made available to the public as yet, as there are issues of attorney-client priv­ilege involved that must be cleared first, she said.

According to Wall’s sev­er­ance agreement, he will receive $450,000 in severance pay and the remaining $56,000 of the $100,000 loan for purchasing a house with­in the district he re­ceived when he was hired in January 2017 was forgiven. Under the terms of his contract, the $100,000 loan was to be for­giv­en over the course of the four-year contract term at $25,000 each year he remained employed.

Wall will also receive the full $161,700 performance bonus for 2018 that was al­ready due to him because he met the contract re­quire­ments.

In addition, the district will pay the health insur­ance premiums for six months should he continue with the employee group plan under federal laws which allow for such ex­tensions.

For Nichols, the sever­ance agreement pays $475,000 and will pay the health insurance pre­mi­ums for herself and her child for 12 months should she continue with the group health plan.

Wall was hired by the Antelope Valley Healthcare District Board under a four-year agreement in Jan­uary 2017, following a board turnover in the No­vem­ber 2016 election that led to the ouster of Alec­to Healthcare Services man­agement company, after 13 months.

Nichols joined the exec­utive team in March 2017.

When asked Friday if she had anything to say about the executives’ tenure with the hospital, Hong answered “absolutely nothing.”

Reached Friday, both Wall and Nichols spoke fond­ly of their time with Antelope Valley Hospital and the people there, and ex­pressed pride in the ac­com­plishments of the past two years.

“For me, I just decided it was time for me to move on,” Wall said. “I was really proud of what I was able to accomplish, particularly with Colette. The organ­iz­ation really had a lot of successes, through work­ing with the medical staff, work­ing with the board, work­ing with rank and file.”

“I appreciated working with the board and working with the community. I fell in love with the com­mu­nity,” he said. “I just made the decision based on ev­ery­thing that was going on that it was time for me to move on.”

“I elected to bring my working relationship with the hospital to a close because the hospital count­ed on me to achieve great re­sults, I’ve achieved them successfully, and now I’m ready to devote my full focus to the next chal­lenge,” Nichols said. “A.V. Hospital has given me so many wonderful memories, so much warmth and affection, and I cannot thank them enough for the honor of the opportunity to be their (Chief Operating Officer and Chief Financial Officer). It’s no secret that my heart belongs to the hospital’s incredible staff, its world-class physicians, its precious patients, and this Antelope Valley community of 500,000 people who I’ve been privileged to live amongst and call my friends for the past eight years.”

Wall and Nichols list­ed among the ac­com­plish­ments of their ten­ure improvements to the hos­pit­al’s financial per­for­mance, including up­gra­ding the hospital’s credit out­look with Moody’s In­vest­ors Service from “neg­ative” to “stable” for the first time in six years.

“It’s huge. CFO’s work for a lifetime to get that kind of upgrade. It was really nice for the hospital,” Nichols said.

Part of the effort in improving the hospital’s fi­nan­ces included staffing chan­ges which impacted some 300 employees in order to reduce the hos­pit­al’s labor costs to bring them in line with industry standards.

“The financial recovery plan may have painful for those individuals who were affected, I understand that, but you can not have a hos­pital at 67% of salaries, wages and benefits and be sustainable long-term. That’s an industry stan­dard,” Wall said.

Wall also cited the im­prove­ment in the hospital’s grade from an “F” to a “C” by the Washington-based Leapfrog Group, a non­profit health care or­gan­ization that pub­lish­es hospital safety grades twice a year.

“I’m really proud of the work that we did on so many fronts,” Wall said.

Nichols also cited as achievements in re­de­sign­ing the surgery schedule with surgeons and staff to increase surgical volume by as much as 40% with the same staffing levels, and leading “a complete creation of a new Mission, Vision, and Values with the executive team that the board unanimously ap­proved, with an emphasis on teamwork, collegiality, respect, and a focus on quality.”

Both also cited the success of Measure H in November 2017, which brought on a new organ­izational structure in­tended to improve stability in the district’s governance by creating a non-profit corporation with a nine-member board to manage the hospital for the district. The measure passed with more than 73% of the vote.

That model for gov­ern­ance and how the district will proceed with it is now a matter of discussion as the time nears for its com­pletion.

The support for that meas­ure last year was one sign of building rela­tion­ships with community leaders, Nichols said. This led to support for com­munity activities “in a way that the hospital has not participated in  years. This was consistent with our Mission and we became a vital community resource to support the Antelope Valley,” she said.

“I sincerely hope and believe that AV Hospital’s best days are still to come and its proudest moments are yet to be. Tomorrow might never have happened had we lacked the courage we have showed together in the last two years to chart a course of strength, transformation and honor,” Nichols said.

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(1) comment


Wow, Ms Hong and the rest of the Antelope Valley board members sound like a bunch of idiots! Would hate to have them running my organization.
E Kolhede

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