Mad River Community Hospital. | File photo.

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David Neal, chief executive at Mad River Community Hospital, has been unexpectedly ousted from his position, a member of the hospital’s Community Health Advisory Board confirmed to the Outpost this afternoon.

Managers and other hospital personnel were informed of Neal’s sudden departure at a meeting this morning that left some attendees with more questions than answers.

When asked why Neal might have been let go, retired nurse and Community Health Advisory Board member Nancy Terhorst replied, “I don’t have any idea. It just came out of the blue.”

Douglas Shaw remains the hospital’s chief executive officer, a position that’s distinct from Neal’s former position as chief executive. 

Neal’s exit comes eight months after Mad River Community Hospital announced that it wanted to sell itself to an Arizona-based healthcare enterprise called Southwest Healthcare Services, LLC. 

Last May the two parties entered into a 90-day due diligence period, with Mad River saying they expected to secure regulatory approvals and finalize the deal by fall of 2023, and yet the hospital remains locally owned. Management has remained circumspect about the status of the proposed deal, with hospital spokesperson Cynthia M. Keene declining to respond to emailed questions on the topic.

In a letter issued to hospital employees last Wednesday, however, Shaw said discussions between Mad River and Southwest continue to take place regularly. But he referred to the proposed sale in terms of “if” rather than “when”:

Southwest is a great organization, and we continue to have meetings regularly to ensure that, if there is an opportunity to work together, it will be mutually beneficial. Unfortunately, things have taken longer than expected; however, even with the difficult market climate hospitals across the nation are currently facing, we see light at the end of the tunnel. As a result, our goal is not to rush into any deal but to take our time to ensure that we get this right for you, our community and for Mad River’s legacy (which is also my father’s legacy).

Shaw added that he will share more information, including an ownership transition date, “if and when it becomes available.”

Meanwhile, a few details have emerged about what Southwest Healthcare Services has been doing since last May:

  • Last month a Fresno area radio station reported that a related company called Praise Health attempted to buy a shuttered Hospital in Madera but later abandoned that effort. Its coverage quoted Dede Tsuruoka as a spokesperson for both Praise and Pacific Hospital of the Valley, where Precious Mayes is president and CEO. 
  • Although Mayes had also been a manager and member of Southwest Healthcare Services, LLC, she was removed from both roles in August, leaving Paul R. Tuft as the only manager and member, according to filings with the Arizona Corporation Commission.

For her part, Terhorst continues to hope for a robust future for Mad River Community Hospital, which is the nearest emergency room for more than 35,000 residents in Arcata, McKinleyville and elsewhere in northern Humboldt County. 

“I’m optimistic,” she said. “I don’t think these people are going to take us and run us into the ground.”

She added that Mad River Community Hospital is ready to take on more laboratory work as Providence prepares to close its outpatient labs. Terhorst has urged member hospital officials to talk with the community about the sale and its status, but she says that hospital executives counter that they cannot speak publicly during their due diligence period.

In his letter to employees, Shaw said he and Mad River’s board of directors “remain committed to doing whatever is best for the community and our hospital.”

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NOTE: Carrie Peyton-Dahlberg contributed much of the reporting to this story.