Editors Update, Jan. 29: The Tahoe Forest Hospital Board of Directors voted Tuesday to initiate its transition plan and have Virginia Razo become the interim CEO, effective immediately. Former CEO Bob Schapper will not have a formal consulting arrangement, and he has no role with the district now. The board also agreed to wait on starting a search for a new CEO.

Editors Update, Jan. 14: On Wednesday afternoon, the Nevada County District Attorney’s office confirmed an active and ongoing investigation into the hospital district.

Bob Schapper’s tumultuous tenure as the CEO of Tahoe Forest Hospital is over. The Tahoe Forest Hospital Board of Directors decided to not renew Schapper’s contract in a closed session meeting at the Tahoe Forest Foundation conference room on Tuesday night, Jan 13. Schapper will leave his CEO position on Jan. 27.

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Virginia Razo, the hospital’s COO, will become the interim CEO, according to a transition plan that still has to be voted on by the board at its Jan. 27 meeting. In July, the hospital will begin a search for a new CEO. Bob Schapper will continue to work for the hospital as a consultant until the end of his contract, which will expire June 30.

The “mutually agreed upon” decision was made without a vote, said Tahoe Forest Hospital Board President Karen Sessler, but was the “mutual consensus” of the meeting. No reason was given for the decision.

“The board had a discussion about what was in the best interests of the district and that is what was agreed upon,” said Paige Nebeker-Thomason, spokesperson for the hospital district.

At Tuesday’s meeting, members of the public lined the hallway outside of the small meeting room due to a lack of space for them to sit or stand inside. They entered one by one to speak in public comment about Schapper’s performance. Many sharply criticized Schapper’s tenure as CEO, saying that he has become a divisive figure and a distraction to the public hospital district. Some accused him of intimidation and unethical behavior.

“It is time to move on and find a new CEO who will restore trust with the community,” said Ronda Brooks, a nurse who was a candidate for the hospital board in the November election. “… It is clear that the current CEO has not portrayed our district and its operations with a proper, consistent image and I submit to you that it is time to find a new CEO with leadership skills that focus on respect, trust, and integrity without the distraction of scandals and corruption.”

Others supported Schapper. Obstetrician Shawni Coll read comments from medical staff praising Schapper’s performance, and Radiologist Thaddeus Laird spoke highly of Schapper’s leadership and vision for the hospital district.

“Please strongly consider asking Bob to stay on as CEO for one more year during which time he will transition Ginny Razo into that position,” wrote Dr. Laurence Heifetz in the physicians’ statement read by Dr. Coll. “Once the transition does take place, treat him respectfully and with an appropriate severance package.”

The decision to cut ties with Schapper came after months of simmering controversy and a long series of closed session meetings on Schapper’s performance and continued employment. Persistent questions about a conflict of interest regarding his wife’s employment at the public special district hospital were never fully explained or resolved by the board.

A Two-Year Investigation

Schapper’s potential conflict of interest was first publicly raised by Moonshine Ink in a July 2012 article entitled Tahoe Forest Hospital Under the Microscope: Where Does the Money Go? The newspaper reported findings from further investigation of the potential conflict of interest in an article entitled New Revelations: Tahoe Forest Hospital Report, published in July 2014. The report showed that Bob Schapper had direct connections to his wife’s company, which had been paid nearly $1 million through contracts with Tahoe Forest Hospital, and also investigated whether the simultaneous employment of the CEO and his wife constituted a violation of California Government Code 1090, which is a felony.

The July 2014 article revealed that Bob Schapper was listed as the vice president and treasurer of his wife’s company, Medical Practice Solutions, in bankruptcy filings submitted in the year 2000. Bob Schapper was also listed as chief financial officer of Medical Practice Solutions in state business documents.

By May 2014, Marsha Schapper had been laid off from the hospital district and the hospital board had launched an investigation into the potential conflict of interest. But all of the investigation’s details were withheld from the public, and all of the discussion occurred in closed-door meetings.

The Tahoe Forest Hospital Board commissioned an independent investigation into the issue, which was handled by Greg Moser of Procopio, Cory, Hargreaves and Savitch, one of the largest business law firms in the state. The report was completed but never released to the public, and the board allowed Bob Schapper’s lawyer to become heavily involved in the investigation, according to conversations with board members Dale Chamblin and John Mohun, and a review of the approximately $57,000 in legal fees that the hospital district ended up paying for Schapper’s personal legal defense. Without releasing the report, the board declared that there was “insufficient evidence” of a conflict of interest and closed the book on the case.

But the controversy over Schapper’s management style and potential conflicts of interest grew. At meeting after meeting, members of the public called for his resignation or asked the board not to renew his contract. Schapper was defended by members of the medical staff of Tahoe Forest Hospital like Heifetz and Coll. Former board member Rob Eskridge and former Tahoe Forest Hospital Foundation President Randy Hill were also outspoken supporters of Schapper.

By late last year, Tahoe Forest Hospital Board President John Mohun said at a public meeting that he no longer wanted Bob Schapper to remain as Tahoe Forest Hospital’s CEO. But Mohun was clearly in the minority. When the board moved to negotiate a new contract for Schapper during the final weeks before a newly elected board was seated, the public demanded that the new board be allowed to make the decision regarding the CEO’s contract.

Schapper first came to the Tahoe Forest Hospital in 2002, taking over for CEO Larry Long, who became a member of the hospital’s board of directors. He led or was involved in many projects and new initiatives at the hospital including, “creating an academic affiliation with UC Davis Health System, advancing clinical quality to levels of national recognition, implementing diagnostic imaging technology to levels rare for a rural community, and facilitating the modernization of the physical facility through improvements outlined in the Measure C general obligation bond,” according to a statement by Tahoe Forest Hospital.

New Board Meeting Location

The hospital board also recently announced a decision to hold regular monthly Board meetings at the Tahoe Truckee Unified School District at the site of the school district’s administrative offices. The location change is “due to space limitations and configuration of the Eskridge Conference Room located on the campus where Board meetings were previously held,” according to a statement released by Board President Sessler.  Regular board meetings will also now be streamed live on TTCTV’s website.  Hospital board meetings are held the last Tuesday of each month, with open session beginning at 6 p.m. 

Author

  • David Bunker

    David Bunker almost dropped out of journalism school to hunt non-native rats on an uninhabited Pacific island. Instead, he graduated college and launched into a career of dump truck driving and ditch digging before taking up writing as a profession. He’s written for newspapers and magazines across the West and won numerous first place awards in the California and Nevada press associations.

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