WhidbeyHealth and HealthTech Dispute Emerges Ahead of Contract Review

Medical staff leaders at WhidbeyHealth delivered a letter to the hospital’s elected board urging immediate action to end the district’s management contract with HealthTech, writing, “We respectfully request that the Board take prompt action to evaluate and pursue dissolution of the current HealthTech contract at the earliest feasible opportunity.” Commissioners met Feb. 26–27 and went into executive session to discuss “existing or reasonably expected litigation,” records show.

HealthTech pushed back in a letter signed by board chairman Derek Morkel, disputing claims that the WhidbeyHealth board controls the retention of the hospital CEO. Morkel cited contract language he said makes the CEO an at-will employee of HealthTech, allows either the hospital board or HealthTech to terminate the CEO, and contains a one-year noncompete that would preclude the CEO from working for WhidbeyHealth after termination. Morkel wrote, “Thus, the Board in no way maintains complete control over the CEO’s retention, and HealthTech explicitly reserves all rights to take appropriate action in that regard.”

The dispute surfaced publicly after letters were obtained through a public records request. Chief of Staff Dr. Robert Rookstool, writing on behalf of Medical Staff, added a blunt assessment of day-to-day operations: “At this time, the Medical Staff believe that a functional and trustworthy working relationship between WhidbeyHealth leadership and HealthTech no longer exists.” Those concerns formed the core of the request that the board evaluate contract dissolution sooner than the formal end date.

A hospital-district liaison identified only as Jouas emailed board members earlier in the week, saying, “I had a conversation last week with a Healthtech representative about our ongoing relationship.” Jouas added that she “related to them the entire Board of Commissioners will evaluate our future relationship as we fill our board positions to best represent our community.” Jouas’ full name and title were not provided in the records reviewed.

The current management contract between WhidbeyHealth and HealthTech runs through March 2027, though current and former board members signaled the district may explore ending the agreement earlier. Public correspondence and internal exchanges indicate the rift began in 2025 and centers on accusations of alleged overreach by HealthTech into hospital administration and a disagreement over who has the power to fire the CEO.

The Feb. 26–27 executive session notice citing “existing or reasonably expected litigation” raises potential legal stakes tied to contractual interpretation and the noncompete provision. The contract text itself, the CEO’s employment status, and the identities and roles of some players named in the letters remain unproduced in the documents available; those items will be central to any board decision on contract review and possible termination. With the contract active through March 2027, WhidbeyHealth’s elected commissioners must now balance Medical Staff demands, HealthTech’s contractual claims, and the prospect of litigation as they consider the district’s next steps.