PD Editorial: Sick call

<p>The latest controversy at Sebastopol’s Palm Drive Hospital is truly discouraging.</p><p>With most of the action taking place behind the scenes, it’s not yet clear if this is a clash of egos, if there has been misconduct by administrators, board members, or perhaps both.</p><p>What is clear is that barely two weeks after gaining a federal judge’s approval to exit bankruptcy, chaos reigns again at Palm Drive Hospital.</p><p>At least two issues seem to be driving the latest turmoil: One is an unexpectedly low bond rating that could drive up borrowing costs, potentially undermining the reorganization plan. The other is an allegation that bidding rules were violated by administrators on a six-figure contract and counter-allegations of interference by board members. </p><p>James Russell, the CEO who led Palm Drive through bankruptcy reorganization, was placed on paid leave Friday after the third closed-door board meetings in two weeks. Russell, in turn, accused board chairman Dan Smith of interfering with day-to-day management of the publicly owned hospital. He and other administrators also have alleged violations of open-meeting and medical privacy laws by board members.</p><p>The hospital has hired outside legal counsel to review “all allegations,” and both Russell and Smith deny any wrongdoing.</p><p>Palm Drive has flirted with insolvency time and again over the past decade. Its closure would leave the west county without an emergency room and other vital health facilities. </p><p>The hospital has survived because west county residents have agreed three times to tax themselves and because of the efforts of dedicated employees, administrators and board members.</p><p>Smith loaned the hospital $1 million when it couldn’t make its payroll in 2007 — and forgave the debt last week. Russell, who was hired 13 months ago, has helped steer Palm Drive from a $2.2 million operating deficit to its first projected year-end surplus in recent memory.</p><p>With its intensive care unit reopened and innovative new surgery and robotic medicine programs, the hospital has begun to carve a sustainable place for itself in Sonoma County’s health care market.</p><p>But if Palm Drive reverts to its old pattern of revolving-door management, the hospital cannot maintain the confidence of west county residents or the credit markets it needs to complete its reorganization plan.</p><p>The west county and the hospital will be best served if the latest conflict is sorted out quickly and any necessary changes to management, hospital policy or the board are made publicly and without delay.</p><p>Anything less will leave Palm Drive Hospital on the critical list.</p>