Watsonville Community Hospital CEO resigns; board to announce next steps Wednesday

Pajaro Valley Health Care District CEO Steven Salyer discusses new public ownership of Watsonville Community Hospital
Pajaro Valley Health Care District CEO Steven Salyer discusses new public ownership of Watsonville Community Hospital in September 2022.
(Hillary Ojeda / Lookout Santa Cruz )

After steering Watsonville Community Hospital through its transition to public ownership during nearly two years at the helm, CEO Steven Salyer submitted his resignation late last week, leaving the hospital’s governing board to fill the unexpected vacancy.

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Citing personal and family matters, Steven Salyer is leaving his role as Watsonville Community Hospital CEO after serving just under two years and steering the hospital through a bankruptcy and the institution’s transition to public ownership.

Salyer submitted his resignation letter to the hospital’s board of directors late last week and the board chair, John Friel, informed employees and the community on Monday.

Friel, who chairs the Pajaro Valley Health Care District board, said Salyer’s resignation was unexpected and “unfortunately, these things happen.” He added that the hospital is thankful for the CEO’s contributions throughout the bankruptcy and transition to public ownership.

“Needless to say, we’re disappointed that Steven made this decision. It’s for personal and family reasons,” Friel said. “People have to leave for a variety of reasons and we just move forward. We’ll do a search and find a qualified individual to bring on board. It will slow things down a little bit, but we’ll continue the course.”

On Wednesday, the board is set to announce next steps for interim leadership and its plans to find a new CEO; that announcement will come after a closed-session meeting preceded by an open session about the hospital’s strategic planning process, according to Friel. The board will also officially accept Salyer’s resignation.

Hospital officials said Salyer was not available for an interview, but provided a statement from him.

“I love this hospital and community,” he said in the statement. “I poured my soul into this organization and I’m proud of the work and accomplishments.”

Reiterating what hospital leaders told Lookout earlier this month, Friel and other board members said the hospital is doing well financially after filing for bankruptcy in November 2021. Since the health care district took over ownership Sept. 1, district leaders have updated staff schedules and renegotiated insurance contracts, among other significant changes as part of its business plan.

Watsonville Community Hospital
(Kevin Painchaud / Lookout Santa Cruz)

So while officials say the hospital is on its way to breaking even and they’re confident in its cost-saving measures, Salyer’s departure will interrupt the hospital’s progress. The health care district recently contracted with a firm to start the strategic planning process, and district board member Marcus Pimentel said the board will have to discuss how to move strategic planning forward with Salyer leaving. The board could decide to delay the strategic planning process until the hospital has a new CEO.

“Our district and our hospital deserves a well-guided, inclusive process to develop a strategic plan for our district and our hospital,” Pimentel said. “We made a commitment as a board to do that, and now it’s a challenge for us to stay on pace with that with this current transition.”

Salyer was hired by the hospital’s previous owners in July 2021 and will serve his last day April 10. Previously, he was CEO of UP Health System, a specialty care and trauma hospital in Marquette, Michigan, and CEO of Sebastian River Medical Center in Sebastian, Florida. Before transitioning to health care, Salyer was a captain in the United States Marine Corps.

He started working at Watsonville Community Hospital just months before it declared bankruptcy. He led the hospital through the bankruptcy process, developed and implemented a business plan to avoid repeating annual losses of $20 million and hired a new leadership team as it transitioned into the public-ownership model.

Pimentel also emphasized Salyer’s commitment and leadership.

“He came here and almost immediately in his first weeks and saw how dire the hospital was,” he said. “I’m grateful that he committed to sticking through the bankruptcy process — converting to a government community-run hospital, run by elected locals.”

June Ponce, the new executive director of the hospital’s foundation, said the community appreciates Sayler’s contributions, and that his departure is unfortunate.

The work that he did was amazing to get us this opportunity to reach positive financial stability and a solid leadership team,” she said. “We’re a community hospital and that’s how we’re going to continue to operate.”


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