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Hôtel-Dieu Grace Hospital in Windsor, Ont.Greg Plante

The Ontario government has moved decisively to head off a potential power struggle with a Roman Catholic group over control of a troubled Windsor hospital.

Health Minister Deb Matthews appointed a supervisor of Hôtel-Dieu Grace Hospital on Wednesday to assume all the powers of the board of directors and report directly to her. She also put the religious group on notice that the hospital has only one master - the provincial government.

The Religious Hospitallers of St. Joseph, a little-known group that founded Hôtel-Dieu more than a century ago, exercised its considerable powers last month by dismissing the hospital's long-time chairman.

The ouster not only shocked Hôtel-Dieu staff and some board members, it was widely seen as a challenge to the government's authority over the province's publicly funded hospitals. Egidio Sovran was dismissed as chairman just days after Ms. Matthews put the hospital on notice that she planned to appoint a supervisor.

"It was a very extreme power they used and it really rubbed a lot of people the wrong way," said a hospital employee who asked not to be named.

Groups that run religious hospitals in Canada have broad reserve powers, albeit ones that are rarely used. According to Hôtel-Dieu's bylaws, Religious Hospitallers can appoint board members and the chief executive officer as well as approve new construction projects and the annual operating budget.

Ms. Matthews made it clear that the province's Public Hospitals Act, not religious groups, have the final word on governance.

"To make it very simple, the powers of the supervisor supersede those of anyone else," she said in an interview.

Ms. Matthews delivered the same message on Wednesday in a telephone call to Robert Stewart, president of Catholic Health International. Religious Hospitallers is part of Catholic Health, which in turn is affiliated with more than 30 hospitals and long-term care homes across Canada, including three hospitals in Ontario.

It was Dr. Stewart who informed Mr. Sovran that Religious Hospitallers' board members had unanimously decided to remove him as chairman. Dr. Stewart and Frank Bagatto, Religious Hospitallers' representative on the hospital's board, did not return The Globe's phone messages.

Religious Hospitallers' history in Windsor dates back to 1888, when five nuns from Religious Hospitallers of St. Joseph in Montreal arrived in the border city to care for the sick and the poor. The hospital opened in 1890 with 100 beds, and nuns served as its chief executive officer until 1968.

Ms. Matthews said Dr. Stewart is "fully cooperating" with the supervisor, former assistant deputy health minister Ken Deane. But instead of bringing in a fresh set of eyes to address the hospital's dysfunctional work environment, the minister turned to someone with first-hand experience at Hôtel-Dieu. Mr. Deane was its chief executive officer from 2002 to 2004.

"I think it can cut both ways," he said in an interview, "with pluses and minuses on either side."

The challenges confronting the hospital are unique. Not only is it at the centre of a scandal over diagnostic test errors, it is also grappling with much deeper problems that have fostered a long-standing atmosphere of distrust and disrespect between medical staff and senior management.

Progressive Conservative health critic Christine Elliott criticized the government for initially responding to a report released last August that outlined the hospital's unhealthy work environment by just appointing a part-time facilitator to oversee changes.

The government launched a probe into the hospital last year after it came to light that a surgeon had performed mastectomies on two cancer-free women, and that a pathologist allegedly made mistakes on tests. The hospital suspended the pathologist in January, 2010.

"They seem to have underestimated the complexity of the problem at every step along the way," Ms. Elliott said in an interview.

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