Wednesday, January 04, 2006

A Mulligan for Roger Williams Medical Center CEO

A local story for all you golf fans, about Roger Williams Medical Center here in Rhode Island:

We posted a while back about the messy story of former RI State Senator and Committee Chair, John Celona, who admitted selling the services of his office to three major health care organizations, the CVS drug company chain, Rhode Island Blue Cross and Blue Shield, and Roger Williams Medical Center in Providence. (See previous post here.)

A federal grand jury is continuing the investigation of this case. Late last year, the Providence Journal reported that federal prosecutors had offered the Medical Center a deferred prosecution agreement, "which would require the hospital to admit to wrongdoing in the hiring of John A. Celona," and "to pay a fine, cooperate with the investigation, and agree to to internal reforms." So far, the Medical Center has not agreed.

One bone of contention was an internal report the hospital commissioned in 1998 to investigate the financial dealings of the Medical Center's Chief Executive Officer (CEO) Robert A Urciuoli. The report incidentally refuted charges that Celona was hired by the hospital for a "no-show" job, but did seem to demonstrate that Celona was using his position as a State Senator to benefit the hospital.

In December, 2005, the Providence Journal reported that CEO Urciuoli had been put on leave by the hospital, but was continuing to collect more than $300,000 in salary.

On New Year's Day, the Providence Journal reported, eight years on, about the contents on the 1998 internal investigation. In 1998, Dr Philip O'Dowd became a member of the Medical Center's Board of Trustees when he was elected President of the Medical Center's Medical Staff. O'Dowd began hearing complaints from hospital staff that "Urciuoli had charged personal expenses to the hospital, steered hospital contracts to friends, and improperly borrowed more than $40,000 from the hospital against unused vacation time."

The Executive Committee of the Board, (Chairman Herbert Cummings, former President of Citizens Bank, Robert A Licht, former state Lieutenant Governor, Raymond Mancini, owner of Rhode Island Distributing, a liquor distributing firm, Edward C Arditte, a Textron executive, Bradford Gorham, a lawyer and state Republican party chairman, and Raymond Murphy, an accountant with Sullivan & Co), authorized an investigation by Dennis Saylor, a lawyer and former federal prosecutor, and now a judge. This showed:
  • Urciuoli charged the hospital for extended trips with family members to lavish golf resorts. For example, in 1997 he and his fiance went to The Breakers in Palm Beach, Florida for a four day conference. But they stayed at the Breakers for 10 days. All 10 days of the trip were charged to the hospital, for a total cost over $7000. Urciuoli later explained that the extra days were needed to "settle in" after the "long flight." The couple also stayed at the Scottsdale Princess Resort in Arizona for eight days, for almost $6,000, for a conference on "Health Care Issues in the 90's." However, "no such conference took place." By requesting reimbursement for this trip, Saylor thought that "Mr. Urciuoli may have committed a serious fraud upon the hospital." Urciuoli's excuse was that he did not want to disappoint his family by canceling the trip when he found there was no conference.
  • Urciuoli charged "at least $4,300 in personal meal and entertainment expenses, including $2,850 for family dinners" to the hospital. For example, "in a span of about two weeks in July, 1997, Urciuoli charged two birthday dinners for his two future stepdaughters at the Clarke Cooke House in Newport. The total: $1,599." Urciuoli's excuse was that these charges were a "mistake."
  • More than $29,000 other charges on Urciuoli's corporate American Express card were "highly questionable."
  • Urciuoli drew several interest-free loans from the hospital, totaling more than $90,000, which he never repaid. In one case, he claimed to have paid back a $5000 loan, but "hospital records recorded the $5,000 payroll deduction as a charitable donation to the United Way." Saylor said that this payment "may raise an inference of tax fraud...."
  • Urciuoli "also appeared to exhibit an unusual degree of favoritism" toward hospital vendors. In one case, he dealt with Thomas F. Fay, a consultant to copier company IKON, but also a former Chief Justice of the RI Supreme Court who had been convicted of corruption. Fay introduced Urciuoli to IKON manager Robert Ferland, and the two subsequently traveled to Nantucket in another trip financed by the hospital. Saylor found evidence that Urciuoli shared information on competing bids for copying services with Ferland.
Saylor delivered his report to the hospital Board's Executive Committee. The Committee presented an oral summary, but refused to share the full report with the Board of Trustees. The Committee recommended that Urcuioli should keep his job, but pay the hospital $16,000, a figure which was clearly less than the questionable expenses and loans that Urciuoli charged to the hospital. Committee member Gorham recently said a reason to keep Urciuoli in his position was worry "about the hospital's reputation." In golf terms, the Board granted Urciuoli a "mulligan."
Dr O'Dowd was unhappy with their presentation, "In my opinion virtually all of the employee allegations against Mr. Urciuoli were understated or misrepresented by the EC of the board in an attempt to represent it as clearing Mr. Urciuoli of any serious charges." Other Board members recalled that Saylor had found evidence that Urcioli committed fraud. Nuala Pell, wife of former Senator Claiborne Pell, said she was "surprised that we weren't allowed to see the full report. I thought it was very odd." Gorham said, "they were worried about confidentiality. They were worried that the hospital's reputation would be damaged."
The Medical Center Board voted 13-3 to accept the Executive Committee's recommendations. Nuala Pell later said, "Urciuoli obviously used his position for personal advantage. I felt he should have been fired." Board member Russell W Field Jr later said, "The reason I voted against it was that it didn't smell right. When a person does something wrong, particularly an executive, I lose faith in that person."
Based on Dr O'Dowd's complaints, the RI Attorney General's office launched a criminal investigation. But, the hospital refused to share Saylor's report, citing attorney-client privilege, and Board Chairman Cummings said the hospital did not want to pursue criminal charges against Urcioli. The only result of this investigation was a civil agreement that Urciuoli would pay the hospital $85,000 for the cost of Saylor's investigation.
After the Board voted to retain Urciuoli, several hospital executives left in protest. Dr O'Dowd is no longer at Roger Williams Medical Center.
Reactions to these late revelations of long-ago events has been swift.

Today the Providence Journal reported that efforts are underway in the state legislature to find ways to "hold executives and directors of Rhode Island hospitals to higher standards of 'accountability and transparency.'" The current Lieutenant Governor of Rhode Island, Charles J Fogarty, said that it is "discouraging" that hospital leaders "were not working for the good of the public and the patients they are there to serve." Furthermore, "as we have seen with Blue Cross in Rhode Island and Enron and WorldComm nationally, some of these higher-ups think that a company is their private domain. One of the biggest outrages is that many Rhode Islanders who are struggling to pay their premiums, or have lost their health insurance, have to read about these expenditures by a nonprofit health-care institution."

Let me sum up with today's lead editorial in the Providence Journal.

Roger Williams Medical Center President Robert Urciuoli's creative use of his expense account in the late 1990s, and the hospital board's countenancing of same, recalls how some chief executives in the for-profit sector have acted with arrogance, treating their companies as private fiefdoms as they are paid ever more extravagantly. That's bad enough. But in a nonprofit organization such as Roger Williams Medical Center, it seems worse.

At first glance, you might be surprised that the hospital's board did not terminate him for what in some places and organizations would quickly get you fired. But then, many boards, be they of Enron or a hospital, tend to be remarkably tolerant of the senior managers they are supposed to supervise.

Mr. Urciuoli's actions and bad ethics are depressing enough. But, again, what was the board thinking?

Meanwhile, it might be interesting to speculate when the extraordinary greed of our era will end -- a greed that has come to encompass the top of organizations that are supposed to serve the public interest.

Thus the saga of Roger Williams Medical Center is added to the depressing litany of inept and corrupt leadership of health care organizations. But depression is not a health response to this sort of sleaze in health care any more. We need to stand up for health care leadership that is accountable and transparent, and representative and honest too.

If not us physicians, who? If not now, when?

[Update as of Jan 5, 2006: The Associated Press reported that Roger Williams Medical Center itself, CEO Urciuoli, former hospital Vice President for public relations and development Fran Driscoll, and Peter Sangermano, President of an assisted living facility linked to the Medical Center all have been indicted by a federal grand jury for conspiracy and mail fraud related to the hospital's hiring of former RI state Senator John Celona. Watch Health Care Renewal for more on this.]

ADDENDUM (2 January, 2010) - Incoming RI Governor Lincoln Chafee named Robert A Licht, former member of the executive committee of the board of Roger Williams Medical Center (see above), to head the Department of Administration, per the Providence Journal.

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