St. Charles Health System President and CEO Joe Sluka stepped down on Tuesday after eight years at the helm. The sudden change comes after two years of the COVID-19 pandemic, the recent layoffs more than 100 St. Charles workers and as employees are moving forward with efforts to unionize.
Dr. Steve Gordon is taking over as interim CEO effective Tuesday. The St. Charles Board of Directors will begin a national search for a successor.
“I am so proud of this organization and the more than 4,500 employees who put their hearts into caring for our communities every single day. This is a very difficult decision,” Sluka said in a statement from St. Charles. “At the same time, after leading through more than two years of a global pandemic and the corresponding recovery I feel it is time for me to step aside, recharge and provide the opportunity for new operational leaders to guide St. Charles forward.”
In a conference call with the media, St. Charles Board chairman Jamie Orlikoff said the decision was Sluka’s.
“This was his decision. His call. He had been deliberating this and struggling with it. As he told me, he’s never quit anything in his life,” Orlikoff said.
“I think the pandemic was the primary stressor. It’s almost impossible to exaggerate challenge and we’re still dealing with the ramifications of it,” he added.
Sluka’s departure is the latest in what Orlikoff indicated is the highest health system CEO turnover rate in history. That’s partly due to the pandemic and partly due to demographics.
“We were seeing a generational turnover among baby boomer CEOs prior to the pandemic, but we anticipated this. The pandemic has significantly accelerated this,” Orlikoff said.
Gordon is a former member of the St. Charles Board of Directors and has previous executive leadership experience at multiple health service organizations.
“I am energized to build on Joe’s legacy and advance and strengthen St. Charles despite the current challenges the health care industry faces,” Gordon said in a statement. “I will continue to work closely with Joe in his strategic advisor role and am grateful that I’ll have his support, insight and ideas moving forward.”
Orlikoff said St. Charles “lucked out” by Gordon agreeing to take over as interim CEO. He added that Gordon has no interest in the permanent job.
The announcement comes less than two months after St. Charles laid off 105 workers while also leaving 76 vacant positions unfilled. St. Charles blamed flat revenue along with increased costs for supplies, equipment and contract labor during the COVID-19 pandemic.
St. Charles said at the time it was facing an operating loss of approximately 6.7% for 2022 to date, having lost $21.8 million through April. It said the layoffs would reduce annual expenses by $20 million, but it won’t prevent the system from experiencing “substantial operating loss” in 2022.
Additionally, the Central Oregon Providers Network (COPN) filed for union representation last month. Nearly 300 St. Charles employees are members of COPN.
St. Charles touted some of the successes it says happened under Sluka, including construction of a new patient tower and a state-of-the art intensive care unit at St. Charles Hospital in Bend, expansions of the Madras and Prineville locations, the addition of robotic surgery in Redmond and the opening of outpatient clinics in the south side of Bend and in La Pine.
In addition to his role as president and CEO of St. Charles, Sluka also served as chairman of the Oregon Association of Hospitals and Health Systems Board of Directors for two years through the height of the pandemic.