WhidbeyHealth ends HealthTech deal, hires CEO Nathan Staggs directly

WhidbeyHealth’s board voted Thursday to end its management agreement with HealthTech and put CEO Nathan Staggs directly on the hospital district payroll. The 3-0 vote came with one commissioner absent for that portion of the meeting and another already resigned.

The board also authorized President Marion Jouas and Commissioner Katherine Nelson to negotiate and approve a final settlement agreement outside a public meeting. The resolution leaves unresolved whether WhidbeyHealth will owe additional payments to HealthTech and how a noncompete clause involving Staggs will be handled. The new resolution makes Staggs a direct hospital employee at $460,000 a year plus benefits, ending a structure in which he had been treated as superintendent under state law while still employed through HealthTech.

WhidbeyHealth put the arrangement in place during the COVID pandemic in 2022, when HealthTech was hired to supply leadership that included Staggs and chief financial officer Paul Rogers. By late January, the medical staff had voted no confidence in HealthTech, and on Feb. 27 the board and the management firm were already at odds over governance, CEO authority, contract costs and revenue-cycle performance.

Thursday’s action followed months of open conflict that became impossible to ignore after the Jan. 22 meeting, when the board first voted 3-2 to fire Staggs and then reversed itself after doctors, nurses and other staff crowded the room and protested. Commissioner James Golder resigned the next day. In a Jan. 30 medical staff op-ed, the district’s clinicians said the relationship with HealthTech had grown untenable after the upheaval.

Its July 9 special-session agenda listed Resolution #486 to terminate the HealthTech management agreement and Resolution #487 to approve compensation for the superintendent. It also scheduled an executive session under RCW 42.30.110 to discuss litigation or legal risks expected to create adverse financial consequences.