Joe Sluka

After eight years at the helm of Central Oregon’s four-hospital health system, Joe Sluka said he will step down as president and CEO.

Sluka cited the challenges of the pandemic and the financial fallout from that effort at St. Charles Health System as reasons for stepping down.

“I am so proud of this organization and the more than 4,500 employees who put their hearts into caring for our community every single day,” Sluka said in a prepared statement. “This is a very difficult decision. I feel it is time for me to step aside, recharge and provide the opportunity for new operational leaders to guide St. Charles forward.”

St. Charles Health System ended the first quarter of the year at an operating loss of $17.2 million, according to the hospital. The losses have been attributed to caring for the community, at or near full capacity over the past two years of the COVID-19 pandemic. During that time, the hospital often paid wages that were three times higher than normal. And, during the early days of the pandemic, the hospital canceled many private-pay surgeries that contribute to the hospital’s profitability. Earlier this year the hospital system laid off 105 nonclinical staff members and eliminated 76 vacant positions as a way to offset the losses. It also instituted other cost-cutting measures to stem financial losses.

The hospital named Dr. Steve Gordon, a former member of the St. Charles board of directors, as interim CEO. A primary care physician, Gordon has worked as a health care management consultant with Point B. Inc. since 2016. Prior to that he served in executive leadership roles for PeaceHealth in Vancouver, Washington, and Providence Health and Services in Portland.

St. Charles operates four hospitals, one each in Bend, Redmond, Madras and Prineville.

During Sluka’s tenure, he’s grappled with labor issues, including a nursing shortage, a medical technicians strike in 2021 and just last month, the announcement by more than 300 providers that they were forming a labor union to ensure a bigger say in decision-making affecting patient care.

“We thank Joe Sluka for his service and wish him well in the next chapter of his life,” said Joel Hernandez, a registered nurse at St. Charles and Oregon Nurses Association board member. “He led St. Charles during an important period of expansion and change and helped build upon our reputation as an outstanding community hospital and health system.”

The union, which represents about 1,200 nurses at St. Charles Bend, Redmond and Prineville, urged the board to find a replacement as quickly as possible and to include the input from local nurses and allied health care workers.

Oliver Tatom, who works at St. Charles Bend and is a candidate for Deschutes County Commission, said he felt Sluka listened to workers.

“I felt listened to,” Tatom said. “I saw action being taken that they recognized the issues and were interested in helping to resolve them. I felt like he cared about the front-line caregivers and wanted to make things better for us.”

Central Oregon Providers Network, the labor union organized to represent the 300 medical providers, said it will work with whomever is appointed to fill Sluka’s position.

The National Labor Relations Board was supposed to hold a hearing on Friday, but it was delayed indefinitely. The hospital had asked the labor board to dismiss the union’s petition for a secret ballot election.

Former board member and state Rep. Knute Buehler said that Sluka’s retirement represents another challenge for the hospital system.

“This is a very perilous time for St. Charles Health System with ongoing labor strife, poor physician relations, a deteriorating financial condition and now key leadership changes,” Buehler said. “A turnaround is needed which will require a transformational leader or being acquired by an outside health system due to the complexity of the problems.

“It’s crucial for us all that the board of directors make a series of very astute decisions to navigate the storm.”