BOSS COULD FACE CUT; HOSPITAL CEO'S PAY STIRS UP CONTROVERSY.

Byline: Karen Maeshiro Daily News Staff Writer

When Bob Harenski arrived at Antelope Valley Hospital four years ago, the hospital had been through more than a year of political turmoil.

A recall election removed two board members. Two others resigned. Then a recalled director won re-election. Board meetings were contentious gatherings that drew big crowds. The medical staff's executive committee gave the hospital board a no-confidence vote.

Harenski was brought in to succeed a Florida-based management firm that ran the hospital for $400,000 a year after the board ousted a long-time chief executive officer in a $179,000 contract buyout.

``It was just a mess is what it was. It was utter turmoil and a lot of chaos,'' said former board member Hank Marvin, who served from 1992 to 1996. ``I think he stepped into a very difficult situation, and he calmed the whole thing down. He got everybody back to thinking about the hospital and health care in the community and improving the environment that they operated in. We got back to doing health care instead of battling each other.''

But new battle lines are appearing at the hospital.

The combat is over Harenski's compensation, projected at $536,000 this year.

Contract up soon

Most of the five board members indicated last week they want to cut Harenski's pay after a consultant compared it with hospital administrators' pay elsewhere and said it may be excessive. Harenski's contract will expire in January.

Supporters credit Harenski with saving the hospital from going broke and engineering a financial turnaround in which the 350-bed, 1,651-employee facility, the largest in the region, provided more services to the community at a time when other area hospitals closed or made cutbacks.

Critics, however, say fiscal success was achieved at the expense of rank-and-file workers, who feel they have no say on working conditions. Morale is low and hospital administration is unresponsive to worker concerns, they say.

Harenski wants to stay on at the hospital.

``I'm invested in the community. I was hired to come to do a job, and it's not finished yet,'' said Harenski, 51, a Palmdale resident who is married and has two sons.

Harenski was hired in January 1993 at an annual salary of $180,000, assuming the post after the hospital was run for a year by the Hunter Group.

Marvin said the CEO provided by the firm, David Coats, ran up about $10,000 in monthly expenses, including an apartment and a car in town and first-class fare back and forth from his home in Reno.

``We were paying a big expense for the CEO who commuted from Reno,'' Marvin said. ``He would fly in Monday and fly out Friday. There wasn't a whole lot of good we could do. The previous board hired him.''

Cutting costs

Harenski's arrival was accompanied by wrenching changes in the health-care field nationwide. The shift toward managed care stressed outpatient treatment and briefer hospital stays for patients.

With declining revenues and rising costs, the hospital spent $1.7 million on early retirement and resignation incentives to reduce its staff by 166 workers in July 1993.

In April 1994, the hospital further trimmed the staff by laying off 15 managers, and 47 workers were laid off the next year. A final audit showed losses for 1994-95 at $5.3 million.

It was under Harenski's stewardship, supporters say, that the hospital rebounded to an operating budget surplus of more than $6.7 million in the 1996-97 fiscal year, up 39 percent from the previous year.

``He was able to take the leadership and turn the hospital around at a time when there were a lot of hospitals going broke,'' board president Shirley Sayles said.

``Accounts receivable was out of control. We had a horrendous collection problem, and that's been turned around,'' Marvin said. ``I have to credit Harenski. He picked the right guys to bring in as consultants, and they worked hard to adjust accounts receivable.''

Harenski made some unpopular decisions, such as ordering layoffs and temporarily shutting down the progressive-care unit.

``It was necessary to save the organization. At that point, survival was most important,'' Sayles said. ``None of us like big change. It's reality. If it hadn't been turned around, the hospital wouldn't be here.''

Expansion planned

More recently, the hospital has launched an ambitious expansion program. This year it opened a magnetic resonance imaging center and is expanding its emergency room.

The hospital plans to open a $10.7 million, 99-bed facility for long-term skilled-nursing care. Also planned are a $700,000 five-bed pediatric intensive care unit, the first in the valley, and a clinic in Palmdale under a cooperative agreement with the city and county.

When county cutbacks brought an end to a cooperative obstetrics program that had included High Desert Hospital, Antelope Valley Hospital opened two prenatal clinics, one in Lancaster and one in Palmdale, Sayles noted.

In addition, the hospital last year announced a joint venture with local doctors to compete for contracts from health maintenance organizations and other insurance plans.

The hospital hired more than 50 people in the past month and expects more 100 new jobs by the end of the year.

``I think he's a fine CEO because he's a strong leader at the helm. He's all business. He recognizes a problem and doesn't brush over it and cover it up. He addresses it. He does what has to be done,'' Marvin said.

Tactics questioned

Harenski's critics acknowledge the hospital is in solid financial state but question the way that goal was achieved.

``The hospital is profitable, but employees didn't get raises that I would have liked to seen them get,'' said board member Steve Fox, one of the recalled directors re-elected to the board. ``We have to ask ourselves: Did we make a profit off the backs of employees? To some extent we did, and I don't agree with that.''

``The financial picture is glowing. Obviously something is right,'' said Susan Atwood, a labor and delivery nurse who is heading up a hospital union drive. ``We don't want it to be at the expense of the workers and ultimately at the expense of patients. I think he's done a lot of things right, but finance alone is not the only obligation we have.''

Fox said there should be better relationships among administrators, other employees, physicians and the board minority.

``The hospital economically has been doing well. The downside is it took us a good couple of years to get there,'' Fox said.

Fox said hospital workers' morale has suffered under Harenski.

``There was better morale. Now, it's at an all-time low, in my opinion,'' Fox said.

He called patient care, rather than pay, the major issue.

``The employees want to do a good job, but staff and supplies have been cut. It's harder on front-line employees. They're still doing a high quality job, but it's harder because of changes in supplies and staffing.''

Harenski's potential salary of $536,000 is galling to some employees who have settled for raises of 5 percent and 3.5 percent in the last two years, Atwood said.

``Do you know what one teeny bit of his salary would buy in nursing hours?'' she asked.

``Patients complain that they are not having their needs met in a timely fashion,'' Atwood said. ``There's not enough of us to go around and do what we have to do.''

She said employees believe the quality of care has been compromised but don't voice their concerns openly for fear of retribution.

Not everyone feels that way.

Elvie Ancheta, who has worked at the hospital 14 years, believes the hospital is in better shape now than before Harenski arrived. She says she finds him easy to talk to.

``I feel, personally, the hospital has grown and expanded its services and increased its market share. That translates into financial stability,'' said Ancheta, a registered nurse who coordinates education programs for staff and patients.

Hospital officials say they have actually increased bedside staffing per patient day between 1994 and 1997 - by 29 percent in registered nurses and 273 percent increase in nurses' aides. There was a 23 percent reduction in licensed vocational nurses 25 percent decrease in management per patient day.

``When you look at the numbers, the important thing is improving health care in the community. We've been able to add more employees to the bedside, and we reduced management,'' Harenski said. ``The facts speak for themselves.

``There's no doubt that health care employees are working harder. That's at every hospital in the country.''

Marvin and Sayles said Harenski may be weak in employee relations.

``I think (Harenski) could be better at getting out with the employees themselves, walking the halls and getting to know employees' names,'' Marvin said. ``A good leader should get out there and be seen. I think he should make a concentrated effort to get to know people who work at the hospital.''

``I firmly believe that a good performance needs to be recognized,'' Sayles said. ``That's an area that needs more emphasis. Employees are our most important asset.''