John Sarpa and the AVH board: Firm leadership in a crisis
The news started trickling out in January. Aspen Valley Hospital was in trouble. Millions of dollars of uncollected bills had set the public institution on a path to bankruptcy. The hospital’s CEO was fired. The chief financial officer soon followed. And in the most shocking development, 10 percent of AVH’s work force – some 34 employees – were laid off in a single day.Now the dust seems to have settled. AVH has stabilized its finances and set a course toward financial health. And it has become clear just what a crucial role the hospital board of trustees played in saving a cherished community institution.
It was a transformation driven by a mix of ego and skill. Led by board president John Sarpa, a savvy businessman originally from Washington, D.C., the board got involved more than ever before in the hospital’s finances. Not satisfied with mere oversight, board members pushed aside management and dove into the financial crisis themselves.Board member and venture capitalist John Jellinek pushed for millions of dollars to hire consultants, many of whom Jellinek knew personally. Sarpa received almost daily phone calls from the hospital updating its progress. The board even went so far as to hire one of its own members – Elaine Gerson – as a consultant.The efforts paid off. In September, the hospital hired a new CEO. Soon thereafter, it was reported that AVH had pulled itself out of the red and expects to make money next year.
Still, the board’s hard-nosed approach upset many people who felt hospital leaders should have a more humane approach to health care. Even in public meetings, the board often came across as brash, secretive and unwilling to field tough questions. In May’s election for two open seats on the AVH board, local voters elected two doctors in a clear effort to balance a business-oriented board. To many, Sarpa and his board will always be the businessmen who hijacked Aspen’s hospital.But love them or hate them, the board’s profound influence on AVH is undeniable. That many of their ideas – construction of a new hospital building, affiliations with larger hospitals, outsourcing billing operations – are currently on the top of the new CEO’s priority list reflects that influence.
Former interim CEO Bob Karp, who oversaw the financial crisis, said in an interview in April that the community should thank the hospital board. Were it not for them, Karp claimed, AVH would no longer exist.”Were it not for some of the actions of some of our board members, this hospital had a real chance of being lost to this community,” Karp said.Eben Harrell’s e-mail address is firstname.lastname@example.org
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