Admin Committee to Recommend Severance, Regional Search
After only a year on the job, McDonough District Hospital’s (MDH) Chief Nursing Officer (CNO) Wayne Laramie is out, and CEO Bill Murdock is off the hospital’s payroll in 60 days.
The Board of Directors discussed the move in a closed session during Monday’s Board of Directors meeting, and voted on the actions, in a motion that did not reveal the details of the discussion or decision, when returning back to open session, which is a probable violation of the Open Meetings Act. The Community News Brief is seeking clarification from the Public Access Counselor in the Office of the Illinois Attorney General.
At a special meeting of the MDH Board and Administrative Committee Wednesday evening, following a closed session, Board Chair Dan O’Neill recommended the following decisions move forward to the full Board of Directors for review and approval: a separation agreement for Murdock, which will be presented to the full Board for approval next week; a regional search for the CEO; and a seven-person search committee formed.
Pat Osterman, vice president of business strategy, shared in an email May 21 that Melissa Onion, BSN, RN, CLC has been appointed as interim Chief Nursing Officer.
Additional information on the inerim CNO will be shared next week.
“Melissa has demonstrated strong leadership at MDH, and we are confident in her ability to guide the nursing team as we begin the process of identifying a permanent Chief Nursing Officer,” Osterman added.
Murdock was named as the permanent CEO in May 2024. He had previously served as the interim CEO/president after the embattled then-CEO Brian Dietz was expelled through a mutual separation agreement in December 2023. Before being named interim CEO in January 2024, Murdock had served as the hospital’s Chief Financial Officer since April 2019.
[Editor’s Note: In Dietz’s separation agreement, he was paid $325,000: $108,333 to Abrahamson, Rdzanek and Wilkins, LLC (Dietz’s attorneys), and $216,666.67, to Dietz, less applicable withholdings/deductions in 10 payments].
Laramie joined MDH’s administrative team in April 2025, after serving as the CNO at OSF St. Anthony’s in Rockford for four years. Laramie’s contract was terminated effective May 19.
In his role as CNO, it was Laramie who negotiated a new multi-million-dollar contract with Lifeguard, which was deemed by the Board and hospital administration to be financially unsustainable within a few months of its signing. Hospital administrators made the decision to eliminate the contract with Lifeguard; however, a few weeks after that decision, MDH leaders agreed to enter into a one-year contract with Lifeguard, which runs through the end of April 2027.
An email that was sent to MDH staff May 20 from the Board of Directors regarding the recent shake-ups stated: “We recognize this has been a challenging time across the hospital. These challenges – whether related to staffing, financial performance, third-party contracts, or organizational communication – can create uncertainty and added stress. We want to acknowledge that reality.
At the same time, there is meaningful work underway to address these issues and position MDH for a stronger, more sustainable future. While some efforts may take time, we are approaching them with a needed sense of urgency. Our focus remains clear: doing what is best for our organization, our employees, and the communities we serve. That begins with delivering high-quality patient care and ensuring long-term financial sustainability... we want to share several important updates.”
Among the updates shared were the changes in administration related to the CEO and CNO. In addition the email stated that hospitalist services will continue through the current service providers and the Board will work to negotiate a contract to retain existing hospitalists.
According to Osterman, in response to questions from The Community News Brief, the Board cannot respond to personnel-related questions surrounding the moves to dismiss Laramie and Murdock.
“The Board is actively working to identify an interim Chief Executive Officer, while also initiating the process to select a permanent CEO,” Osterman added.
Osterman also shared in response to the CNB’s inquiry that MDH’s financial performance remains a challenge, reflecting broader trends affecting rural hospitals across the country, including pressures related to reimbursement, payor mix and rising costs.
“While our financial position is not where it was two years ago, MDH continues to benefit from a historically strong balance sheet as we work diligently to improve operating performance,” he added. “The Board and Administration remain focused on maintaining high-quality patient care while advancing financial stability. As part of this effort, we are conducting a thorough assessment of MDH’s operations with the goal of preserving our future as a strong, independent, county-run healthcare provider.”
