What Happens When "We'll Manage it the Way We Damn Well Want"

Back in the early days of Health Care Renewal (2005, to be exact), we first wrote about some very strange actions by the management of Phoebe Putney Health System.  At first, we noted that the Phoebe Putney responded to a reporter's inquiry about lavish travel expenses pertaining to the system's Cayman Islands health insurance subsidiary by saying, "We own it. We'll manage it the way we damn well want."

Then the story got far more convoluted.  In 2006, we wrote about the over the top response to anonymous faxes challenged hospital management's commitment to the institution's mission.  The system CEO compared the fax senders to "terrorists."  After the local district attorney handed over his investigative records to hospital system private investigators, the investigators allegedly threatened a local accountant whom they accused of sending the faxes.  Allegations that the district attorney received campaign funding from and may have had other financial ties to the hospital system surfaced.  The district attorney indicted the accountant and a physician colleague on charges of burglary and assault in the absence of any police report of such crimes.  We commented that regardless of the outcomes of the legal case, the hospital system's management's actions seemed at variance with its stated mission.

Now, in 2010, the case is in the news again.  Since our last post, according to the Atlanta Journal-Constitution, the prosecution of the accountant, Mr Charles Rehberg, and physician, Dr John Bagnato, failed.  The district attorney, Ken Hodges,

provided the information gathered through the subpoenas to Phoebe Putney, which the hospital system used to file a civil suit against Rehberg and Bagnato -- a suit that was ultimately dropped. Rehberg then countersued Phoebe Putney, and that case was settled out of court for an undisclosed sum.

Meanwhile, more ties between Hodges and the Pheobe Putney system turned up:

Hodges' decision to run for attorney general elevated the case from a localized matter to one of statewide import. While still a prosecutor in Albany, Hodges received political contributions from Phoebe Putney executives and individuals connected to the hospital system, and his wife was hired as public affairs manager at Phoebe Putney's hospital in Albany.

Since leaving the prosecutor's office in Dougherty County, Hodges has gone to work for the Baudino Law Group, which represents Phoebe Putney. According to records Phoebe Putney must file with the Internal Revenue Service, the hospital system paid Baudino more than $8 million for the fiscal year ending July 31, 2008, the most recent data available.

Now, it is Rehberg who is suing Hodges, for abuse of power. "Charles Rehberg's suuit essentially accuses him and another prosecutor of filing criminal chargest that they knew to be based on fabricated information." A preliminary hearing took place yesterday.

So, in summary, two individuals sent anonymous faxes that charged that the Phoebe Putney system failed "to fulfill its charitable obligations as tax-exempt entity."  Hospital system executives accused them of terrorism, and hospital system investigators allegedly threatened them.  However, a criminal investigation by a district attorney with alleged financial ties to the hospital system ended without any convictions.  A lawsuit by the system against the individuals was dropped.  A suit by the indviduals against the hospital system was settled by the system.  A suit by the individuals charging that the then district attorney abused his power by basing criminal charges on false information is pending. 

So what did the hospital system's management's actions in this case have to do with the system's stated values? -

Phoebe pursues its mission through a patient-centered environment of care reflecting high standards and promoting a balance of professional preparation and service, continuous improvement and based on core values where:

* PEOPLE come first, are treated with dignity and respect, and diversity of culture and thought is respected.
* RELATIONSHIPS are built on honesty and integrity.
* REPUTATION is built on trust and pride.

In fact, the Phoebe Putney management's pursuit of Mr Rehberg and Dr Bagnato seems diametrically opposed to these values, intended to crush all criticism of management by any means. Once again, we see leaders of once-respected not-for-profit health care institutions whose main goal seems to be consolidating their power and thwarting criticism.

I say again, to truly reform health care, our health care organizations must be lead by those who put the institutions' missions ahead of their self-interest, who manage according to the mission rather than "the way we damn well want."

Post Title → What Happens When "We'll Manage it the Way We Damn Well Want"

Do Health Care Managers Think "L'Organisation de la Sante C'est Moi?"

The thinking behind a comment that recently appeared on this blog bears examination beyond the reply I added in our "comments" section.

An anonymous commentator, responding to a post that addressed questions raised in the media about managers who left the troubled University of Medicine and Dentistry of New Jersey (UMDNJ) to work for Drexel University Medical School, wrote,

Through Drexel leadership, the medical school just finished an outstanding LCME review, a very good match, outstanding board scores and fiscal solvency.

"Through Drexel leadership?" Based on my experience in medical education, I would argue, instead, that the people most responsible for good results in an accreditation review, in placing students into residencies, and in board examinations are the students themselves (especially related to the latter two), and the faculty who taught them. Medical school managers, of course, help provide the infrastructure and manage the financing that enables medical education to succeed. But giving the management first credit for educational results is somewhat grandiose. Managers may deserve more credit for fiscal solvency. But so do the students who pay the tuition, and the hard-working health care professionals and support personnel who actually do most of the work.

We have posted previously about how health care managers and bureaucrats seem to believe that what they do is central and more important than anyone else's work to their organizations.

For example, see this post which quotes the Chief Financial Officer (CFO) of Pheobe Putney Health System, "we'll manage it the way we damn well want."

Also, see this post about how the merger with UnitedHealth Group resulted in rich rewards for Pacificare executives. Wall Street analysts thought that the executives were deserving of huge financial rewards for the "risk" they took in trying to turn around a troubled health care company. However, it was their stock-holders who were at financial risk. The executives were paid employees, whose salaries were no more, and possibly less at risk than any other employees if the corporation were to fail.

The attitudes in these three cases seem analogous to that attributed to the French King Louis XIV, "l'etat c'est moi." Managers' apparent beliefs that they are of the most central importance to the medical school, the hospital system, or the managed care company negate the contributions of all the other dedicated people who make these organizations work. The managers perhaps believe that they in effect are owners of these organizations, which, of course, they do not actually own.

This notion that "l'organisation de la sante c'est moi" may represent some of the garbled thinking underlying our presently mismanged health care system.

(I apologize to all and sundry if I have made any errors using the French language. My language education was unfortunately stunted.)

Post Title → Do Health Care Managers Think "L'Organisation de la Sante C'est Moi?"

Pheobe Putney Accuses Whistle-Blowers of "Terroristic" Faxes

A while back, we posted about Phoebe Putney Health Systems, a hospital system in Georgia. The story then was that hospital executives had rung up lavish travel expenses connected with a hospital malpractice insurance subsidiary located in the Cayman Islands. When an Atlanta Journal-Constitution reporter then asked asked Phoebe Putney Chief Financial Officer (CFO) Kerry Loudermilk about these expenses. Loudermilk first said what is lavish "is in the eye of the beholder." He responded to further questions about Grove Pointe, "We own it. We'll manage it the way we damn well want." At the time, I commented that although the hospital system may own its non-profit subsidiary, the hospital executives own neither, and are not entitled to run either any way they "damn well want."

Pheobe Putney is back in the news.

First, the system, using the power of eminent domain through its Hospital Authority, attempted to seize the house of an elderly woman so it could expand its employees' day-care center (see story on AccessNorthGA). The women challenged the system in court. A jury found that Pheobe Putney wanted the house, it would have to pay five times what it offered, plus moving expenses. Meanwhile, in response to this case, Georgia Governor Sonny Perdue is advocating a state constitutional amendment to restrict the use of eminent domain to seize property.

Second, the Atlanta Journal-Constitution reported on a convoluted story of what happened to some people who tried to blow the whistle on Phoebe Putney's financial practices.

It started with faxes called the "Phoebe Factoids," and headlined with the "Top 10 Most Highly Guarded Secrets at Pheobe," which were sent anonymously to a variety of recipients in 2003 and 2004.

As the Journal-Constitution put it, "Pheobe officials were infuriated. The hospital system, through an attorney, hired private investigators who were former FBI agents and aggressively hunted the identity of the faxers. The system's chief executive officer recently compared the fax campaign to terrorism. 'We live in a society that has plenty of terroristic activities,' with hospitals identified as potential targets, said Pheobe CEO Joel Wernick. When an organization is 'bombarded' with faxes, it has an obligation to find out where they're coming from, he said."

Pheobe Putney asked the Dougherty County District Attorney to investigate. DA Ken Hodges convened a grand jury which subpoenad telephone records, but then turned over the records to Pheobe Putney. Apparently based on these records, Pheobe Putney identified local accountant Charles Rehberg as author of the faxes. The Journal-Constitution reported that Pheobe Putney's private investigators then confronted Rehberg, "the investigators blocked his pickup, Rehberg said, and threatened him and his family."

Rehberg was helped by a local physician, Dr John Bagnato. The financial information they found lead them to believe that the hospital and others were "overcharging the uninsured and aggressively seeking payment - therby violating their charitable obligations as tax-exempt organizations." They ended up consulting for attorney Richard Scruggs' lawsuit against not-for-profit hospitals who allegedly overcharged poor patients.

The Grand Jury first indicted Bagnato and Rehberg on felony aggravated assault and burglary counts, as well as misdemeanor counts for making harassing phone calls. The burglary was allegedly at the home of physician James Hotz.

But irregularities cropped up. The Journal-Constitution found out that DA Hodges "received political contributions from Pheobe executives and others connected to Pheobe, and that his wife had been hired by Pheobe Putney Memorial Hospital." Futhermore, the newspaper got statements from people who said that "Hodges' office investigated the faxes case as a 'favor' to the hospital system." Hodges denied connections "between the campaign contributions, his wife's job, and his subpeona actions. And he defended his practice of sharing information." But then "Albany media reported that a bill for the phone records was sent by Hodges' office to a law firm that represents Pheobe." Rehberg's attorney then charged that "Pheobe is financing part of the prosecution."
Furthermore, thew newspaper found out that "there was no police or law enforcement report of a burglary or assault at that [Hotz's] residence.... And the indictment listed no date for the burglary or assault." After Hodges recused himself from the case due to allegations above, Houston County DA Kelly Burke got a new indictment which omitted the felony charges.

Obviously, much of the above consists of charges and counter-charges, none of which have been tested in court. Yet I would submit that at best, the managers of Pheobe Putney Health Systems have used a heavy-handed approach that is ill-suited to its role as non-profit health care provider whose stated core values include "people come first," and "relationships are built on honesty and integrity." Accusing people who sent faxes about financial data of terrorism? Sending ex-FBI agents to investigate the faxes? Paying the District Attorney for records obtained by a Grand Jury?

To repeat, Pheobe Putney managers should be running the organization in accord with its mission to benefit the public, which may not necessarily be the way they "damn well want."

Post Title → Pheobe Putney Accuses Whistle-Blowers of "Terroristic" Faxes

"We'll Manage It the Way We Damn Well Want"

Phoebe Putney Health System is a health care system in Georgia, which boasts of "world-class medicine, hometown commitment." Its stated core values include "people come first," and "relationships are built on honesty and integrity."
Pheobe Putney was the subject of federal lawsuits, now dismissed, and state lawsuits alleging that it over-charged uninsured patients. It is one of the hospital systems that is now subject of congressional investigations of the not-for-profit status of hospitals and health systems. (See news article here.)
Now, the Atlanta Journal-Constitution has reported that top Phoebe Putney executives have run up lavish travel expenses for trips related to a for-profit subsidy. Pheobe Putney set up Grove Pointe Indemnity, based in the Cayman Islands, to provide the system with malpractice insurance. Top Phoebe Putney executives traveled to the Caymans, the Bahamas, and London, UK for Grove Pointe meetings. All travel was by private jet or first class on commercial airliners. Travel expenses included Cuban cigars, ($258 worth for one meal in London meeting), expensive beverages ($538 for one meal), and high-end accomodations (e.g., rooms at the Ritz in London, at 355 pounds sterling a night).
The Journal-Constitution asked Phoebe Putney Chief Financial Officer (CFO) Kerry Loudermilk about these expenses. Loudermilk first said what is lavish "is in the eye of the beholder." He responded to further questions about Grove Pointe, "We own it. We'll manage it the way we damn well want." A search of the GuideStar site for Pheobe Putney's 2002 Internal Revenue Service form 990 revealed that Grove Pointe had an income just under $2.5 million, and a total loss of just over $1.25 million in that year. Meanwhile, Loudermilk's total compensation was just under $3oo,ooo. He was one of eight executives who made more than $200,ooo. Three made over $300,000, and the system's CEO made nearly $600,000.
It will be interesting to see what the congressional investigation discovers about Phoebe Putney. Meanwhile, Loudermilk's response suggests that maybe the hired managers of this not-for-profit health care system feel a bit more ownership of it than they are entitled to. Although Pheobe Putney clearly owns Grove Pointe Indemnity, the managers of a not-for-profit do not own the organization. They should be running the organization in accord with its mission to benefit the public, which may not necessarily be the way they "damn well want." It's not clear that this job entitles them to smoke Cuban cigars on the health system's budget.

Post Title → "We'll Manage It the Way We Damn Well Want"