August 06, 2001 11:00 pm

By Gary Fletcher

Observer Staff Writer

ENTERPRISE A man whose first job as a nurse was at the hospital here is now its chief executive officer.

Economics of operation is a priority for Larry Davy, 43, the new CEO of the Wallowa Valley Health Care District and its Wallowa Memorial Hospital.

Davy was the director of nursing at the hospital the past two years.

Last week, the board named Gail Johnson, R.N., to assume that position and Davy replaced Kim Dahlman, who resigned as CEO effective July 1. Davy had been serving as interim executive.

Davy has been in nursing since graduating from Walla Walla College in 1983.

Davy worked 15 years in Portland at Adventist Medical Center in surgical service, the final two years as director.

Davys work on his masters degree through distance learning will be temporarily interrupted while he studies to become a long-term care administrator for the nursing home, connected to the hospital, and part of the same health care district. Dahlman was administrator for both units.

Davy has been granted a provisional license to administer the care center until he passes the state exam.

Upon his interim appointment July 3, Davy began to implement changes for improvements.

Davy formed an eight-person operations council to address budgetary issues. He says that Wallowa Memorial Hospital has a very good staff, and he seeks their suggestions on ways to reduce expenses and increase revenue.

Last week he reported on the councils aggressive plan to make the hospital self-supporting within three years. That does not necessarily include any future capital improvements.

A 10-year tax base for capital improvements and debt reduction was approved by county voters in 2000. Davy said that within three to five years he wants to begin reducing the rate on the tax base.

If you dont set big goals, you cant achieve, Davy said.

Davy also has a degree in religion and is an elder in a local church. His wife, Christy, is a cardiac rehabilitation nurse at the hospital. They have three children, Matthew, 16, Leah, 13, and Abby, 8.