WhidbeyHealth cuts ties with HealthTech

Published 1:30 am Friday, July 10, 2026

WhidbeyHealth’s board voted Thursday to end its relationship with medical management firm HealthTech and employ CEO Nathan Staggs directly, while authorizing two commissioners to negotiate a settlement agreement with the company outside of a public meeting.

The board approved a settlement agreement with few details, instead authorizing board President Marion Jouas and Commissioner Katherine Nelson to negotiate and approve the final terms.

It’s unclear whether the settlement will require additional payments to HealthTech or how it will address a contractual noncompete provision involving Staggs.

The board previously named Staggs as the superintendent of the public hospital district — a necessary step under state law — yet he was an employee of HealthTech. Under the new resolution, he is a hospital employee and earns $460,000 a year, plus benefits.

The vote was 3-0. Hospital Commissioner Marcy Shimada wasn’t at that part of the meeting, and Dr. Mark Borden resigned from the board at the prior meeting.

In March 2022, hospital commissioners — none of whom are still on the board — entered into a five-year contract with HealthTech after the board fired former CEO Ron Telles. HealthTech had claimed that a noncompetitive clause in the contract precluded the CEO from working for WhidbeyHealth for one year after termination.

The relationship between HealthTech and the hospital has deteriorated since the beginning of the year.

In January, the medical staff passed a vote of no confidence in the company in the wake of a controversial meeting at which a majority of board members fired Staggs and then rescinded the decision after a vocal protest from medical staff. The medical staff asked the board to pursue dissolution of the contract with HealthTech.

During that public meeting, a representative from HealthTech summoned two of the board members — James Golder and James Canty — into the hall in a highly unusual move that drew criticism. After the meeting, Borden blamed HealthTech for convincing him to vote to fire Staggs. Golder and Canty resigned.

The hospital board’s relationship with HealthTech, however, started out as positive, with former board members thanking the company for bailing out the hospital district during a difficult time.

Under the contract, HealthTech provides the hospital with a CEO and a CFO as well as a range of other management services. The CEO and CFO were HealthTech employees but reported to the board.

The contract cost the hospital millions of dollars over time. In 2023, the hospital paid HealthTech $1.7 million; the cost increased to $2.2 million in 2025, according to the hospital administration. The overall cost includes salaries and benefits for the CEO and CFO. In 2025, Staggs’ salaries and benefits amounted to $511,000.

In addition, the hospital contracted with Impekkable, a staffing company associated with HealthTech. The contract cost the hospital an additional $200,000 in 2025, according to hospital officials.

Jouas and Gregory Richardson, who was on the board at the time, wrote a letter to HealthTech on June 10, 2025 to clarify the company’s role and to complain about what they felt was overreach and interference on the part of HealthTech.

“We have appreciated that support and accepted the significant cost, but we want you to be aware of the limits and style of involvement that have evolved to a level that is now considered invasive and over-controlling,” their letter states. “We need to observe a marked reduction in the pressures that are being exerted and the negative impacts we are experiencing.”

A HealthTech official responded with a letter of his own, defending the company and claiming that Jouas and Richardson got their facts wrong.

The letter, signed by Derek Morkel, chairman of the board for HealthTech, states Jouas and Richardson were mistaken in asserting that the board maintains control over the retention of the CEO. Noting sections of the contract, Morkel wrote that the CEO is an at-will employee of HealthTech and either the hospital board or the company can terminate him.

HealthTech previously asserted that its contract prohibited Staggs from working for WhidbeyHealth for one year after leaving the company. How the settlement resolves that issue has not been disclosed.