Wallowa Memorial Hospital is seen in this aerial view. The hospital will have a new CEO, Dan Grigg, beginning Sept. 11.

ENTERPRISE — Larry Davy, who started his health-care career at Wallowa Memorial Hospital, and then — during two stints as its chief executive officer — spearheaded the drive to build a new hospital and led it through the COVID-19 pandemic, has announced his retirement.

The 65-year-old Davy, who has led the hospital and the Wallowa County Health Care District for more than a decade and a half, will step down from his position on June 24.

“I slammed into 65 last month,” he said. “You get to thinking, you know, I’m not immortal.” The hospital, he said, “is in a good place, and we have a really strong leadership team and a strong board, so I think it’s probably a good time to spend some time with family and reduce the stress a little bit.”

Nick Lunde, chair of the board of directors for the Wallowa County Health Care District, said the search already is on for Davy’s successor and that the search now is focused on internal candidates.

“Our first line of attack is to look inside our organization and hopefully identify the right person to promote,” he said. “Failing that, then we would advertise outside.”

Davy, who still has his registered nurse license, graduated from Walla Walla University’s nursing program in 1983. (His wife, Christy, also graduated from that program.) In 1999, he was named the chief nursing officer at Wallowa Memorial, and was named CEO in 2001.

At the time, Davy and Lunde recalled, the hospital had less than a week’s worth of operating cash on hand. Today, the hospital is operating out of a building that was constructed in 2007 and has expanded its outpatient clinic offerings. It’s paid off its debt and is on track, Lunde and Davy say, to turn a small profit in the 1-2% range at the end of its fiscal year. The hospital employs about 225 people.

During his first stint as CEO, Davy helped lead the effort to build a new hospital on its current site on Medical Parkway. The $21.8 million facility opened in 2007.

Later that year, Davy accepted an offer from Adventist Health to become the president and CEO of Tillamook County General Hospital, a much larger hospital. The job in Tillamook paid more, and that was important at the time for the Davys, who were helping to pay college tuition for their three children. (The move also allowed them to be closer to their youngest daughter, Abby, who was studying nursing.)

In 2014, Davy returned to Wallowa Memorial as the CEO after the retirement of Dave Harman. Davy said he welcomed the opportunity to return to a community where he has deep roots — his maternal great-grandparents, James and Hatti Merrill, are buried in the Wallowa Cemetery and he frequently visited Wallowa County relatives while growing up.

The move back to Wallowa Memorial Hospital also necessitated a cut in pay.

Pay issues Over the last year or so, Lunde said, the board of the Wallowa County Health Care District has been researching other hospitals in an attempt to determine whether Davy’s salary was in line with what CEOs at Oregon’s five other public health care districts were making. That work began before Davy announced his plans to retire.

“We thought we were keeping up” with salaries at other health care districts, Lunde said, but a recent survey of the state’s public health care districts showed that Davy’s base salary of $280,000 was at the bottom of the list.

“And, yet, our performance has been stellar,” Lunde said. “We’re the only (public) district hospital (in Oregon) that’s in the black,” and Wallowa Memorial is the only hospital in Oregon that made this year’s annual list of the top 100 critical access hospitals in the nation. “We felt that we needed to reflect that through compensation.”

At its meeting in February, the board authorized a one-time payment of $56,000 — 20% of Davy’s base salary — for its CEO. Board members knew that Davy was retiring, but they “felt that was just a fair thing to do, because we’ve been underpaying,” Lunde said.

Davy said, “What they did is give me enough so that I’m at the rate a brand-new CEO would get starting out. What (the board said) was, we’re at least going to make you whole for the last year, comparable to your colleagues.”

Davy said the hospital and the county’s public health district have benefited from what he termed a “phenomenal” amount of support from the community, its board of directors, its providers and employees and its numerous volunteers. But he added, “I think we have to be careful that we don’t take all the credit,” and he recalled remarks he made at the 2007 dedication of the hospital.

“I made the comment that we can add up all our efforts, and what everybody’s done, and it doesn’t (completely) explain where we’re standing, why we are standing here in a new hospital. … So, God has blessed us. But, at the same time, a lot of people have done phenomenal things to get us here.”

Davy will leave behind a string of accomplishments at the Wallowa County Health Care District, but the one he might be proudest of has nothing to do with facilities or budgets or accolades.

“You can point to financial turnarounds, new hospitals, those kinds of things,” he said. “But I think one of the most lasting things is being able to help develop the next generation of leadership in the hospital. We have an extremely strong team that’s really going to go places.”

And Davy, who plans to stay in Wallowa County after he retires, said he’ll be “cheering from the sidelines and watching things continue to improve.”

Nick Lunde, chair of the Wallowa County Health Care District Board of Directors, gives CEO Larry Davy credit for his work to get Wallowa Memorial designated a “critical access hospital.”

The designation from the Centers for Medicare & Medicaid Services is designed to reduce the financial vulnerability of rural hospitals and improve access to health care by keeping essential services in rural communities.

As of July 2022, there were 1,360 critical access hospitals in the United States.