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CHAPTER 22:
THE NEW ADMINISTRATOR HAS PROBLEMS TO SOLVE
"I recall when I first got here, the director of finance handed me a note to sign to borrow a million dollars. I choked a little bit, because you don't sign a million-dollar note without reading it or at least asking what it's about. The hospital was so short of cash that they would pledge their accounts receivable to borrow a million dollars every month to meet their cash-flow needs. As soon as they collected their accounts receivable, they'd pay the bank back. But they could never get ahead, and the next month they'd borrow a million dollars and start all over again."

Cash flow was just one of the problems James D. Hart faced when he arrived at Northwest Hospital in January 1975. "It did not have a good working relationship between management, the board, and medical staff," Mr. Hart said. "Personnel problems were pretty evident in places. It was not bringing new, young talent in. It wasn't planning its future. The hospital might have edged into the black a time or two, but never enough to really count."

The board of trustees hired Jim Hart to revitalize Northwest Hospital. When Allan Davis resigned, a selection committee of George Holland, Frosty Richardson, John Larson, Byron Lane, Bill Millington, Winnie Hageman, Harold Cooper, and Dr. Louis Lancaster conducted a nationwide search for a replacement. They received about 250 applications, which Ms. Hageman and Mr. Richardson narrowed down to 60. The full board reduced this field to 20 and retained Holum Company, an executive search firm, to interview these semi-finalists and bring the top four back to Seattle for an interview.

Jim Hart had been the administrator at a small hospital in Roseburg, Oregon. When he started there, it was losing money (occupancy was at about 24 percent) and had serious political difficulties in the community. Within a year he had stopped the losses, improved the occupancy rate by about 15 percent, completed the building program, and "engaged in a vigorous and complex legal battle about future development of the hospital in that community," said Mr. Hart.

He learned later that Mr. Richardson had been his champion through the review process at Northwest Hospital, and, Mr. Hart said, "I think if there was anything that won me the position, it was Frosty. He asked me what I saw as my relationship to the board. I said I was not necessarily there to do the board's bidding, but rather was there to lead, lead the board as well as the hospital and that they would respond to me and plans I laid out. I figured I'd either won the interview or lost the job right on the spot! The board's been very good to allow me to have that kind of freedom."

The relationship has turned out to be a good one. The board has, indeed, given the administration freedom to act. "I'll give him all the credit in the world," said Ms. Hageman of Mr. Hart, "but he wouldn't be able to do some of the things he does and be delegated as much as he has been without a board that was willing to do that." On the other hand, the board appreciates Mr. Hart's expertise: "We wouldn't have that tower, we wouldn't have any of this," said Mr. Richardson, without Jim Hart. "In my opinion that tower should be named the James Hart Building!"

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