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Felix Adamo/ The Californian

Russell Judd was appointed the new CEO of Kern Medical Center by the Board of Supervisors. This photo was taken in November.

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John Harte / Special to The Californian

Russell Judd, president of Mercy Hospitals of Bakersfield, will take the helm at Kern Medical Center. Judd, pictured here in July 2012, will not be a county employee. The county will contract with a management firm created by Judd to run the public hospital.

Russell Judd, the president and CEO of the two Mercy hospitals in Bakersfield, will take the top job at Kern Medical Center, the county’s financially battered hospital.

But in a twist, Judd will not be a county employee.

Instead, the county will contract with a management firm created by Judd that will run KMC for it.

The arrangement is designed to give Judd more flexibility in KMC’s operation and an ability to quickly pursue marketing and business opportunities that would be slowed or stopped by the methodical churn of county bureaucracy.

"We have to run Kern Medical Center like a hospital," Judd said. "It's what I know how to do."

Both supervisors and Judd said he will still be held accountable for protecting taxpayer money and keeping the public informed about hospital operations, both good and bad.

The county has not finalized the contract with Judd’s firm and the cost of the deal will not be available until the Kern County Board of Supervisors takes the deal up on Dec. 3, said County Administrative Officer John Nilon. The five-year contract will be with Judd and two other administrators who will make up “KMC Management Inc.,” the county announced in a news release.

Judd's team would go to work Dec. 16.

"I know what a gem Kern Medical Center is to this community," Judd said. "Over the last nine years at Mercy, I have seen the very important role Kern Medical Center plays in keeping our community healthy."

He said he is committed to succeeding.

"I pledge to give it my very best — to put forward the effort necessary to get KMC where it needs to be."

Both Maggard and Judd said that all other KMC employees will remain in their county jobs and retain their pay and benefits.

Judd said he will work closely with those employees and expects to see KMC band together to build a future.

"The situation is desperate enough that I'm certain everyone will have the courage to make the decisions needed" to move KMC forward, Judd said. "I know Kern Medical Center. But more importantly, I know what Kern Medical Center can be."

Judd expects to immediately become the focal point of intense public scrutiny.

He takes the helm just two months after the firing of his predecessor, Paul Hensler, and in the midst of a sweeping overhaul of the hospital's finances by new Chief Financial Officer Sandra Martin.

Martin will continue to report directly to supervisors, not Judd.

Martin is working to cut some $6.5 million from KMC’s 2013-2014 spending plan — a budget that KMC has already overspent by $7.6 million since July.

In total, Kern County is grappling with a $64 million budget hole stemming from the revelation a few months ago that hospital financial staff had — for seven years — systematically overestimated how much money the county would be paid by the state and federal government for caring for indigent patients.

Judd and the rest of the new fiscal team will also be reacting to the reworking of the nation’s health care system under the Affordable Care Act.

And a host of outside individuals and groups will be tracking that work.

Maggard appointed a panel of local experts including Clinica Sierra Vista CEO Steve Schilling and former Congressman Bill Thomas to dig into hospital operations.

Doctors and employee unions are watching with a concerned eye, too.

Ernest Harris, regional director of the Service Employees’ International Union, Local 521, said the county shouldn’t sit back and “penny-pinch” the hospital, blaming some of KMC’s fiscal problems on the lack of staffing in critical fiscal department jobs.

Judd has history with Kern’s public hospital. He worked as an administrative intern there while he earning a master’s degree in health care administration from Cal State Bakersfield. He worked at the hospital from 1991 to 1996.

Judd went on to work at several other hospitals, including in Barstow, Arizona and Pennsylvania. He returned to Bakersfield in 2004 to take the top post over Mercy hospitals.

Jon Van Boening, senior vice president, operations Central California for Dignity Health and president and CEO of Bakersfield Memorial Hospital, said he accepted Judd’s resignation this week. He piled praise on Judd and supervisors for giving him the job.

“I’ve enjoyed Russell as a colleague for the past nine years,” Van Boening said. “I’m very happy for Russell and his family that he has an opportunity in his career to accept a new challenge.”

Van Boening, who graduated from the same master’s program as Judd, added that he is glad supervisors recognized Judd’s strengths and talent and have given him the chance to turn KMC around.

“Russell is a skilled and experienced and proven hospital executive,” he said.

The CEO said he supports a hospital authority model for running KMC, similar to how Dignity Health runs its hospitals via a company-wide executive board as well as local boards of directors. He said he does not think supervisors have time to act as KMC’s board of directors.

Still, the executive said he trusts supervisors and Maggard’s leadership and that Dignity Health Bakersfield will support whatever model the supervisors select to run KMC.

Van Boening will work with Dignity Health executives to transition Mercy Hospital Bakersfield, which has a location downtown and one in the southwest, to new leadership.

“We have talent on the ground currently to ensure that the transition in leadership at Mercy will be seamless,” Van Boening said.

Judd received $557,102 in 2012, according to Mercy Foundation Bakersfield’s tax filings. Hensler’s base annual salary was up to $395,040 at the time he was fired.

Maggard said there was no formal recruitment effort to find Judd and there were no other candidates for the job. The discussion of the unique deal came up in a conversation between Judd and Supervisor David Couch.

Couch brought it to Maggard and the ball started rolling to make the deal.

Maggard said Judd was chosen because he has a history of turning around troubled hospitals. And, he noted, Judd has deep roots at KMC and Kern County.

What that means, operationally, is that Judd will be able to move easily into a role of advocate trying to improve KMC's place in the local health care environment, Maggard said.

"To be a player in the medical community, you have to be active in the medical community," he said. "He is a part of the fabric of Kern County. He knows the players.”