News

If doctor wins, he loses a lot

Not every candidate risks a contract worth $83,000, but that’s what Dr. Paul Zaveruha is doing in his run for a seat on the Whidbey General Hospital District board of directors.

Zaveruha hopes to retain his contract with the hospital as its Emergency Services Directors, but the present board has already told him that won’t happen. If elected, he’ll be stripped of the contract, according to a letter Zaveruha received from Peter Borden, board chairman.

But despite the risk of losing his job, Zaveruha is still running for office and he intends to fight to keep his current position as hospital EMS director.

“My intention is to finish the campaign, win the election, and clarify the conflict of interest statute,” Zaveruha said in a Thursday afternoon interview.

The hospital board stated his contract will be terminated to resolve any conflict of interest that may arise with Zaveruha holding a director’s position.

“The board doesn’t really care whether he’s one or the other, but he can’t have both,” said Commissioner Dr. Roger Case in an interview earlier this month.

Zaveruha’s argues that the terms of his EMS contract will steer him through any conflict of interest problems that might arise if he wins a seat on the hospital board.

He is also planning to put the shares of his business in trust of another physician to alleviate any further concerns.

Zaveruha’s business is contracted by the hospital, and as part of that agreement he serves as director of emergency medical and trauma services for $83,000 annually. The previous amount was $95,000 a year but it was reduced as part of the hospital’s cutbacks earlier this summer.

State officials

see a conflict

Zaveruha’s hopes of remaining as EMS director if elected may be slim, according to knowledgeable state officials.

Washington’s conflict of interest statute prohibits any commissioner from being beneficially interested in any contracts made by the board he or she serves on.

“If he (Zaveruha) were elected, there would be a conflict of interest,” said Stacia Hollar, deputy of legal affairs for the Washington State Auditor’s Office. To resolve such a conflict, the hospital board would have to void his contract or remove him as commissioner, according to Hollar.

If he takes office, Zaveruha could also face a $500 fine and the auditor’s office might eventually find that the hospital is violating the state’s conflict of interest statute, Hollar said, explaining what could ultimately happen.

Hollar’s view of the situation is supported by Jeff Mero, executive director of the Association of Washington Public Hospital Districts.

“Explicit law” about contract

“The state law is pretty explicit,” said Mero.“It requires that the contract would be terminated.”

He added that Zaveruha could renegotiate his contract with the hospital. But he could only earn $18,000 a year, the current amount permitted by the statute.

Zaveruha argues that because the hospital contracts with his business and not him, he may be able to avoid any conflict of interest by recusing himself from a decision.

Hollar of the state Auditor’s Office said there is a “remote interest” provision in the statute that under certain conditions allows people contracted by the hospital to serve on a hospital board. But it’s doubtful Zaveruha’s situation meets those conditions.

She also pointed out that Zaveruha has to be careful because he not only receives a salary from his business but also receives profits from being the owner of the business. That would not qualify as a remote interest, she said.

She cited examples of remote interests, including being a non-salaried officer of a nonprofit organization or being the landlord or tenant of a business contracting with the hospital.

Hollar added that if a hospital commissioner does have a “remote conflict,” then he could recuse himself from voting. But the conflict also has to be entered into the public record.

Mero said a similar problem happened in 2001 when Coulee Community Hospital in Eastern Washington was cited by the auditor’s office when a commissioner, who happened to be a physical therapist, was contracted to provide services to the hospital. And he said that relationship was less significant than Zaveruha’s situation.

Administrator for Coulee Community Hospital, Mike Wiltermood, said the conflict of interest was resolved when the physical therapist agreed to a $1,500 month contract.

Dr. Case gave up position

Dr. Case said that he resigned his position as director of the hospital-owned North Whidbey Community Clinic when he was elected to the board in 1996. He is currently the health officer for Island County.

Running against Zaveruha is Amy Ayers, the hospital’s former chief operating officer who retired last December. She said she doesn’t have any conflict because she isn’t currently employed by the hospital.

Retaining his job as Emergency Services Director may not be Zaveruha’s only problem if elected to the board. Mero said his position as a surgeon working at the hospital could also provide potential conflicts.

“It is a pretty gray area,” said Mero, adding that anybody can charge a conflict of interest and that the list of potential conflicts is lengthy.

Mero added that the hospital district would be responsible for defending a conflict of interest allegation, a situation which could lead to a lengthy and expensive court fight because of the case law on the subject.

After Zaveruha filed for the position the last week of July, the board met Aug. 11 in a closed session with legal counsel.

Case, Borden and Brad Berg, attorney for the hospital, later met with Zaveruha to talk about potential conflicts. Zaveruha also received the letter signed by Borden stating his EMS director contract would be terminated to resolve any conflicts.

“I think the pretense of the board is they don’t want me to take office,” Zaveruha said.

He added that the situation has gotten contentious because of the hospital’s position. This isn’t the first time he’s had difficulty running for a seat on the board. He said board members tried to keep him from running previously because they argued he lived outside the commissioner district and because his wife also works at the hospital.

Borden’s letter caused public controversy when publicized, so the board later sent an open letter to the hospital staff clarifying the board’s position. If Zaveruha is elected, the board plans to issue the 120-day termination notice for his Emergency Services contract.

You can reach News-Times reporter Nathan Whalen at nwhalen@whidbeynewstimes.com or 675-6611.

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