Hazel Hawkins CEO resigns, but stays on as interim

Hospital board amends Ken Underwood’s contract so he can continue working until a new CEO is recruited.
Dr. Ariel Hurtado said Underwood's departure was a mutual agreement.
Dr. Ariel Hurtado said Underwood's departure was a mutual agreement.
Mary Casillas also said Underwood's departure was on mutual terms.
Mary Casillas also said Underwood's departure was on mutual terms.
Josie Sanchez read the statement announcing Underwood's departure.
Josie Sanchez read the statement announcing Underwood's departure.

The CEO of Hazel Hawkins Memorial Hospital will be stepping down this summer after 20 years of service. Ken Underwood’s contract expired on Feb. 1, but an amendment unanimously approved in open session at the Jan. 23 San Benito County Healthcare District Board of Directors meeting allows him to stay on for six months. Underwood will act as interim CEO, during which time the board will recruit for a new CEO.

Board chair Josie Sanchez announced Underwood’s resignation in a written statement at the meeting. She said that he would “complete his duties in accordance with his employment agreement through the end of this fiscal year, June 30, 2020.”

“With the pending approval of critical access hospital designation, the board determined it was an appropriate time to assign a new vision and direction with the hospital leadership,” Sanchez said.

The statement credited Underwood with recruiting 35 new specialists, including two full-time endocrinologists, three full-time orthopedic surgeons, a neurologist, rheumatologist, pulmonologist, psychiatrist, cardiologist, infectious disease specialist, three surgeons, two obstetricians, a gastroenterologist, a hospitalist team, two pediatricians, and the addition of the Pediatrix Medical Group, a MEDNAX affiliate.

While two board members said Underwood’s resignation was a mutual agreement, he spoke to BenitoLink prior to the meeting and said that a board member wanted him to leave. Though he didn’t name the board member, Underwood did say “he.” Dr. Ariel Hurtado is the only male member of the hospital board.

“I know one thing he wants to do before he leaves the board in November is to have a new CEO and CFO in here,” Underwood said. “I know he’s really pushing for that. It just adds to controversy. I have no plans. We’ll see what the board comes up with for my employment agreement. I’m not expecting to go anywhere anytime soon.”

Hurtado said he has no intention of leaving anytime soon and said Underwood’s departure was the result of a mutual agreement between himself and the board. He said because it was an employment issue, he could not discuss what took place behind closed doors. Hurtado that said Underwood felt it was a good time to leave because the hospital would shortly transition to critical care access status, which is at least a month away from being finalized.

“He felt he was more of a CEO type for growth, improving services,” Hurtado said, “and critical access will require a different type of leadership.”

Hurtado explained that to become eligible for the critical access designation, the hospital reduced its number of beds from 45 to 25. The average number of daily patients at Hazel Hawkins is below 13.

“That limits your growth and you can’t support certain specialties when you don’t have a lot of patients,” Hurtado said. “When you only have 10 patients, you can’t have a neurosurgeon, as an extreme example. So, [Underwood] felt at this stage of his career he was ready to transition out. We all felt it was a good time, and he wasn’t forced out.”

Board member Mary Casillas also said Underwood’s departure was on mutual terms.

“The addendum will keep Mr. Underwood until June 30 as CEO,” she said. “We did not renew his contract and there is an amended contract for the next six months.”

Hurtado said the board discussed succession plans and is looking for a different type of leadership.

“On the advice of our lawyers, we bought out the rest of his contract,” he said. “We are parting ways, but we need a CEO. Because this was done on good terms, we asked him to stay as interim CEO for the next six months.”

But the board had little choice in the buyout. In 2016, it renewed Underwood’s contract, which included a 12-month severance package if he were terminated without cause. At the time, several doctors and nurses accused board members and Underwood of corruption. Over the objections of then-board member Dr. Nazhat Parveen Sharma, his contract was renewed in a 3-1 vote.

Hurtado said the board wanted to keep Underwood for his “institutional knowledge” until the board could recruit a new CEO.

“This way, he can finish up on projects he was doing,” he said. “Different CEOs have different strengths. Some are better at growing. Some are better at rebuilding. Some have more people or public relations skills. We hope a new CEO will start July 1. We’re going to evaluate where the hospital is and come up with a set of objectives and qualities we’re looking for. If there is a CEO who has a lot of experience with critical care access that would be a definite plus.”


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John Chadwell

John Chadwell is a freelance photojournalist with additional experience as a copywriter, ghostwriter, scriptwriter, and novelist. He is a former U.S. Navy Combat Photojournalist and is an award-winning writer, having worked for magazine, newspapers, radio and television. He has a BA in Journalism and Mass Communications from Chapman University and graduate studies at USC Cinema School. John worked as a scriptwriting consultant, and his own script, "God's Club," was produced and released in 2016. He has also written eight novels, ranging from science fiction to true crime, which are sold on Amazon. To contact John Chadwell, send an email to: [email protected]