Betsi Cadwaladr chairman and chief executive to step down after damning report
Operations have been delayed and waiting lists allowed to grow at hospitals in north Wales to avoid financial problems getting worse, according to a damning report.
"Significant management failings" risked patient safety for under-reporting infections.
The chairman and chief executive of Betsi Cadwaladr University Health Board are to step down after the findings.
Health and audit watchdogs found a catalogue of problems.
BCUHB runs NHS services in north Wales with a budget of around £1.2bn.
Healthcare Inspectorate Wales (HIW) and the Wales Audit Office (WAO) found a series of problems at the health board, which runs Ysbyty Gwynedd, Glan Clwyd and Wrexham Maelor hospitals.
They included finding that the relationship between chairman Prof Merfyn Jones and chief executive Mary Burrows had broken down and compromised the organisation.
The issues include:
- Management failings, which are contributing to significant risks with hospital infections such as c.dificile being under-reported.
- Big financial problems with the health board managing to avoid overspending sometimes only by delaying operations and letting waiting lists get longer.
- Bosses have failed to plan ahead for big changes that are needed to hospital services with no clear plan for which services might be cut or reorganised.
- Leadership at the board was "fundamentally compromised" with the relationship between the chairman and chief executive breaking down.
Health Minister Mark Drakeford said he had accepted Prof Jones' resignation.
He said Ms Burrows had also told him she intends to leave and the health board is working through the detail of her departure.
Mr Drakeford has asked senior NHS officials to swiftly appoint a successor to Ms Burrows to "enable the health board to begin a fresh chapter".
Set up in 2009, BCUHB runs all aspects of the NHS in the six counties of north Wales, from family doctors and dentists to hospitals.
The report noted serious issues with its management, particularly among the 22 people who make up the board itself.
Investigators found senior managers were not taking control of major issues like outbreaks of infections like C Difficile on wards.
There was a "gap between the ward and the board," as shown by the way management handled an outbreak of the C difficile infection at Ysbyty Glan Clwyd near Rhyl in May 2013.
The report found the health board is in "an extremely difficult position" because Prof Jones and Ms Burrows were not able to work together.
Prof Jones told BBC Wales that while he regretted not being able to deal with the deep-seated problems sooner, he insisted patient safety had always been a top priority.
He said: "Leadership at the top of an organisation is critical and getting people to work together is essential.
"The issues are very deep-seated, as the report makes clear, and they are structural. I don't believe that they are to do with personal relationships.
Aled Roberts, Liberal Democrat AM for North Wales, said the report was "shocking".
"It's the worst I've probably read in the 25 years I've worked in the public sector," he added.
"It's quite clear that the report states that the board is incapable of making decisions with regard to the finances of the health board.
"Certainly during the latter part of the financial year in the early spring, operations were being cancelled just to meet financial targets and that cannot be a proper way to run a health service."
Mr Drakeford welcomed the report, adding: "It is clear the board has been through a difficult period.
"However, many fundamental challenges still remain within the organisation."
He told BBC Wales that replacing two individuals would not be enough in itself to restore public confidence.
The minister said the board faced a "much bigger job" in changing the culture of the way it works.