Friday, September 04, 2009

Captains Outrageous for Cape Anne's Health Care System

While on a brief vacation on lovely Cape Anne, Massachusetts, one of my daily automated Google searches provided an article of local interest. The person nominated to be CEO of the local hospital system had been at the center of controversy while in his previous position as leader of a hospital system in Cincinnatti, Ohio. When I got back, I put some relevant terms into Google, and lo and behold, came up with one of the more complicated and colorful, if unhappy stories about problems with health care leadership and goverance I have seen lately. So, to the tune of "lions and tigers and bears, oh my...."

Let me start with some background, and then to try to tell this story chronologically, noting issues as they came into public view. Northeast Health System is a regional hospital system in northeast Massachusets. It includes Addison Gilbert Hospital in Rockport, BayRidge Hospital in Lynn, and Beverly Hospital. Now bear with me through the amazing details.

Leadership Lacking in Transparency

The system's leadership seems to have recently inspired more than its share of controversy. Hints about the nature of the leadership problem appeared in an editorial in the Gloucester (MA) Daily Times in April, 2008.

Once again, Northeast Health System, the Beverly-based corporation that owns Gloucester's Addison Gilbert Hospital, is trying to have it both ways.

When it wants public support — including public money — it casts itself as serving the public. When it doesn't want the public looking into its affairs, it retreats behind the 'private corporation' wall.

That is not acceptable.

The latest example is Northeast's refusal to provide statistics on its diversion rate of patients from Addison Gilbert to Beverly Hospital during the past three years.

Although the editorial allowed that the diversion statistics might not prove to be that alarming, but

If there is not a problem here, the corporation is simply creating needless concern about it by its failure to be forthcoming.

Unfortunately, this is a continuing pattern for Northeast CEO Stephen Laverty, who apparently sees no problem with accepting subsidies of $500,000 from the state for two years running — subsidies secured in part through Tarr's efforts — but then ignoring reasonable requests for information about the corporation's operations, specifically as it pertains to Addison Gilbert.

Statistics on diversions should not be high-level trade secrets. Laverty must make Northeast more transparent.

Doctors Vote No Confidence

The pot really started to boil in May, 2008. At that point, as reported by the Boston Globe, its medical staff voted "no confidence" in CEO Stephen R Laverty:

In a private meeting, doctors at Beverly Hospital have taken a vote of no confidence in its chief executive, Stephen R. Laverty, citing frustration with his management.

The unusual step, made three weeks ago and acknowledged by hospital officials this week, was prompted by Laverty's alleged lack of communication and support in recent years, said several doctors who attended the April 29 meeting at the hospital.

'There's been a lot of cumulative dissatisfaction with how the physicians have been dealt with over a period of years in a variety of departments,' said Dr. Harriet A. Bering, an oncologist who was at the meeting. 'People had the same frustrations with incidents in which they hadn't been included in the decision-making process.'

A vote of no confidence, oh my. The article was not very specific about what lead to such an unusual step, but did note that doctors "accumulated grievances during Laverty's tenure. For instance, they said they were not properly consulted a few years ago when Beverly Hospital ended a successful cancer treatment program with North Shore Medical Center...." So this part of the story points to a hospital system management that does not see the need to communicate with and be transparent to dedicated health care professionals.

The Pregnancy Pact

In June, 2008, a story about a high school's unexpectedly high pregnancy rate and allegations that girls there entered into a "pregnancy pact" got international attention. The latter allegation was not proven, and although initial coverage did locate the story in Gloucester, MA (e.g., see the story in Time), the role of Northeast Health System was more obscure. Later we learned, in October, 2008, as reported in the Gloucester Times,

Addison Gilbert Hospital risked losing the state grant that pays for the operation of the Gloucester High School Health Center this spring when hospital leaders were reluctant to allow confidential access to birth control at the clinic, according to its former staff.

Debate about prescribing contraceptives erupted within a health center advisory board working on a response to the rise in teen pregnancies in Gloucester this year and turned public when the medical director and nurse practitioner resigned because representatives of Northeast Health Systems, the company that owns Addison Gilbert and runs the clinic, would not consider adding confidential prescription of contraceptives to the care offered.

A pregnancy pact, oh my. But this part of the story speaks to system management that seems unsympathetic to the concerns of its health professionals.

Nurses Vote No Confidence, and Allege a Punitive Culture and Intimidation; Vice President Accused of Art Theft

Also in October, 2008, the nurses also voted no confidence, again per the Gloucester Times in an editorial that provided more hints about the nature of the system's leadership problems,

Conflicts between Northeast Health System CEO Stephen Laverty and his subordinates are, unfortunately, nothing new.

By now, in fact, they have taken on a weary familiarity
. After persistent rumors of unrest, a group of subordinates goes public with their frustration and resentment of the CEO. This past week, it was the nurses union, with members at both Beverly Hospital and Gloucester's Addison Gilbert Hospital, that took a 'no confidence' vote in Laverty.

The union is now trying to pressure the board of trustees to fire him, saying Laverty has created a 'punitive organizational culture (with) ... oppressive management practices.' And a 2005 Beverly Hospital citation by OSHA, which surfaced along with the nurses' discontent, gives credence to that claim.

The nurses, of course, are not alone. This past April, it was doctors who took a no confidence vote. In 2006, the Massachusetts Nursing Association filed a formal complaint against Laverty for entering operating rooms unannounced to observe surgeries.

Yet, the response from Laverty is always the same — no response. And his spokespeople offer little more than vague references to 'challenges' and 'competing agendas,' concluding with how proud they all are of themselves.

The editorial allowed, "It's also true that, in any large business, especially one as competitive as health care, there are sure to be conflicts between management and labor." However,

Still, it has to concern the Northeast trustees that every time there is trouble or unrest, Laverty is at the center of it.

It should concern them that morale continues to sink under his style of leadership, which most subordinates agree is a mix of arrogance and intimidation. Effective leaders don't assert their authority by demeaning their subordinates. They lead by building people up, not tearing them down. They lead by inspiring, not breeding resentment.

The truth is, Northeast still inspires shaky confidence among Cape Ann residents for a variety of reasons, including the corporation's out-and-out refusal to share numbers regarding the number of ambulance transport "diversions" from Addison Gilbert to Beverly — and, more recently, Northeast's stewardship over Addison Gilbert's wonderful endowment of artwork.

The recent arrest of a former Beverly Hospital associate vice president — a reported friend of Laverty — on charges of stealing donated art and antiques worth more than $200,000 from the hospital, hardly inspires confidence. And public confidence is one of the most important assets any health care institution has, since its patients are entrusting their health and livelihoods to it.

At times like this, when the public starts asking questions about problems, Northeast officials tend to retreat behind the 'private corporation' wall. It is true that Northeast is not part of the public sector. But it regularly seeks donations from the public. It has received at least $1.5 million in state money, supposedly to support its services to the public, but somehow still finds enough money to pay Laverty well more than $600,000 a year.

The trustees surely should not take the nurses vote as the only credible word on Laverty. But they need to take it, along with other continuing conflicts, very seriously.

Another no confidence vote, a punitive organizational culture and oppressive management, arrogance and intimidation, and art theft, oh my. So here we have much more detail about bad management, punitive, oppressive, arrogant, and ruling by intimidation. We also have allegations of criminal behavior by top managers.

Wait, what was that, a vice president of the system arrested for stealing art from it? In November, 2008, the Boston Globe suggested Laverty's imminent departure, and added more about the art theft.

The current situation comes after years of increasing resentment between Laverty and hospital staff. His internal relationships at the hospital were also damaged by his longstanding association with Paul G. Galzerano, Beverly's former associate vice president for support services. Galzerano sometimes argued with staff members, according to longtime employees, and often threatened them based on his close association with Laverty, according to former nurses.

Galzerano, who left the hospital last year, was arrested in October by Groveland police, who alleged he stole paintings, a grandfather clock, and furniture from Beverly Hospital. The items were found in his home, according to police, who alleged they were stolen when the hospital was undergoing renovations. Galzerano could not be reached for comment yesterday.

Threats by allegedly an art thief, oh my.

Birthing Center Threatened with Closure

But Laverty's departure did not end the controversy. Also in November, 2008, the Boston Globe reported,

A proposal to cease all deliveries at the North Shore Birth Center in Beverly - one of only two hospital-affiliated centers statewide that offer natural birth options - has ignited a passionate protest from women across the region.

With a debate and potential vote by Beverly Hospital's board of trustees expected Tuesday morning, women have been picketing the hospital, circulating fliers, writing letters to board members, blogging and organizing on Facebook, where more than 500 members have already signed on to the campaign.

Service cuts, oh my. After the art work was stolen, the system decided to cut costs by reducing an apparently very popular service.

Specialty Service Cuts, Bed Cuts, and Board Conflicts

An eloquent letter to the Cape Anne Beacon in January, 2009, (and an abbreviated version in the Gloucester Times) by Ms Beverly Quint of Drumlin Road, Rockport, provided much more detail about the legacy of the leadership and governance problems at Northeast Health Systems:

Since November, I’ve heard a number of people say on line at the market, or greeting one another for coffee or waiting for a movie to start, 'Thank goodness he’s gone. Now we can get somewhere without the worry.'

At first I thought they might be talking about the presidential election, but it became clear that most of them felt that anyone leading the country at this time was not expected to perform feats of magic. Then I wondered if they were talking about Father Time, himself, the old guy with the flowing robe and the long beard. It has, in fact, been a year of plunging confidence and quiet desperation. No, people were talking of neither of these; people were and are talking about the exit of Stephen Laverty, the much-criticized CEO of Northeast Health Systems, the corporation that 14 years ago merged with Addison Gilbert Hospital, our community hospital.

I wish I could share my neighbors’ rejoicing at Mr. Laverty’s exit, but I am more worried than ever about the potential loss of our hospital, the lifeline for Cape Ann citizens, isolated as we are from the mainland, connected by two not-always-reliable bridges. Here’s why I’m more worried than ever:

When NEHS announced its merger with AGH, it declared that the merger would benefit both parties. Almost immediately, NEHS began to dismantle AGH, service by service. Nor has NEHS ever made available to the community a detailed accounting of its use of $2 million given by the state Department of Public Health for the protection of emergency surgical and anesthesiologist services at AGH. Here it should be added that NEHS has never given a detailed accounting to the community of other sums taken from AGH, in the form of income from investments, real estate and an art collection estimated at $4 million.

Having downsized AGH’s bed capacity by refusing to use the beds on Steele Two and having sent patients to Beverly for every or no reason and having closed several departments, what remains in Gloucester is a shell. Even as such, we can still call it our community hospital so long — and only so long — as it provides eight services all under one roof, eight services essential for retaining its license. Now even that status for AGH is at risk. And that is why I am more worried than ever. If those eight services go, we lose all — and now they are being plucked at by NEHS. We are at the tipping point, with or without Stephen Laverty.

Let me give you a few examples. One of the eight services essential to our hospital’s survival is the availability of a surgeon 24/7. Instead, NEHS, without announcing it, sends any patient whom they think might need surgery to Beverly Hospital. Till Jan. 1 of this year, we had only one general surgeon based on Cape Ann. Now, again without publicizing it, he will not be available on call for emergency services.

The same is true of anesthesiologists. Without publicizing it, NEHS has not recruited anesthesiologists for AGH, even as it has not recruited surgeons for AGH. This, despite the previously mentioned $2 million received from DPH for bolstering those specialties.

Availability of hospital beds is another of the eight essential services required for AGH to stay alive, but NEHS refuses to open medical-surgical beds on Steele Two, sending patients away from their families, over the bridge instead.

NEHS has also not made an effort to insist that specialists, such as pulmonologists, see hospitalized patients at AGH, but are insisting that patients, instead, be moved to Beverly. As a by-product, this means that patients’ family members — many elderly, many handicapped, many who do not drive —are deprived of a closeness, something that can be emotionally important to patients’ recovery.

For starters, the present board of trustees needs to be questioned on the very high percentage of trustees who are physicians and executives employed by NEHS.

Cuts in surgical and anesthesia services, cuts in beds, shifting of medical sub-specialty services, and conflicted board members, oh my. So whatever the management is doing, it is not increasing services. Also, Ms Quint's letter suggested that conflicted governance may be enabling bad management.

Can It All Be Blamed on the Previous CEO?

In another letter published only last month, in August, 2009, Ms Quint suggested that things had not changed much under an interim CEO,

Not only has the Board of Directors of Northeast ignored a petition by 8,000 Cape Ann residents begging Northeast to disclose its plans and make a commitment in writing. Not only has Northeast ignored a petition by Rockport residents at Town Meeting to be more interactive in commitment to this issue.

Not only has it ignored Rockport selectmen's request to report at regular meetings to which the public could have input

Not only has it snubbed overtures by state Sen. Bruce Tarr to meet regularly with his Task Force, it has systematically downsized, downsized, downsized Addison Gilbert.

Some of this has been ascribed to the particularly tyrannical nature of former Northeast CEO Stephen Laverty. Yet here is a most recent example that belies Mr. Laverty's personality as the supreme cause of the problems. On July 28, Dr. Henry Ramini, interim replacement for Mr. Laverty, spoke to Rockport selectmen on the status of Addison Gilbert. Did you know Dr. Ramini would be there? Nobody seemed to know.

Even the selectmen — one of whom, I understand, had been on vacation — seemed unprepared to publicize Dr. Ramini's appearance. What I later learned from people who happened to hear Dr. Ramini was that he is a much kinder, gentler appearing person than his predecessor. However, the content of his presentation was not particularly reassuring: He urged the town of Rockport to be nice to any future doctors who might deign to seek employment here.

Again, the suggestion is that there are systemic problems with governance and leadership

"An Ugly Set of Facts"

And that will bring us up to the story that my automated search produced. The candidate to be the new Northeast Health System CEO also has his issues. Per the Gloucester Times from August, 2009,

The man in line to become the next CEO of Northeast Health System is leaving behind a crumbling hospital system in Ohio that has been plagued by lawsuits and controversy.

Supporters of Kenneth Hanover say he does not deserve blame for the breakup of the Health Alliance, a $1.4 billion corporation that he served as president and chief executive officer.

But in two court decisions, judges ruled that the Health Alliance and Hanover failed to live up to a legal obligation to act for the benefit of two of its hospitals, improperly used 'enormous sums' of money to fight the lawsuit and gave bonuses to doctors to prevent them from working at those hospitals.

'The record is replete with evidence that the Alliance breached its fiduciary
to (The Christ Hospital),' Judge Ralph Winkler wrote in his decision last year for the Ohio Court of Appeals.

Considering the turmoil surrounding Laverty's tenure at Northeast Health System, it might seem surprising that the organization would replace him with a man with such a controversial background of his own.

The breakup of the Health Alliance became so acrimonious that the Ohio attorney general's office stepped in. In July 2007, in the midst of the legal battle, the chairman of Christ Hospital wrote a letter calling for Hanover to be replaced.

Monica Rimai, the interim president at the University of Cincinnati and a former Health Alliance board member, acknowledged that the lawsuit and the breakup constitute 'an ugly set of facts and we lost.'

Robert Weigel, chairman of Fort Hamilton Hospital, which is in the processing of withdrawing from the Alliance, said Hanover is "one of the smartest men I know." He also said Hanover has a forceful manner than can rub some people the wrong way.

"I have a lot of respect for his abilities and his thinking, but he can be tough to deal with," said Weigel....

An ugly set of facts about the new CEO, oh my. One wonders if the NEHS board had investigated its new CEO candidate's previous performance. On the other hand, maybe the board is most comfortable with CEOs that are "tough [for others] to deal with."

Pregnancy pacts, art theft, no confidence votes, punitive corporate culture, threats and intimidation, closed wards and clinics, slashed services, oh my. You just can't make this stuff up.

On a slightly more sober note, the curious case of Northeast Health Systems is a good example of how governance and leadership can go wrong, and the downstream effect on health services.

Reorganizing the colorful facts above, we seem to start with poor governance, possibly by a conflicted board (per Ms Quint). That board seems most comfortable with aggressive leaders who seem more intent on imposing their will on dedicated, professional staff, rather than working collaboratively, and hiding behind a veil of corporate secrecy, rather than providing the transparency appropriate for a not-for-profit organization whose mission is to to serve the community. Meanwhile, services of all kinds decline, while the community that once supported the organization now regards it with suspicion and alarm.

The current debate about health care reform has focused - to the extent it has focused on anything - on financing and insurance. As we have said many times before, we cannot fix the health care crisis simply by changing financing mechanisms or money flows.

We can only improve health care by improving the leadership and governance of health care organizations, and by rethinking the size and scope of health care organizations. The most crucial part of health care is what goes on between individual health care professionals and individual patients. Yet our system is composed of endlessly enlarging bureaucracies run by self-interested, often clueless, and sometimes dishonest, if not criminal leaders. This must change, unless we want this crisis to get much, much worse.

The title of this post is a weakly satirical bow to the Rudyard Kipling novel set partially in Gloucester, MA.


Anonymous said...

Since Paul Levy has expressed some positive thoughts about Laverty, and the issue is rarely as black and white as some might hope it to be, perhaps he'd care to comment.

Anonymous said...


I do not know any of the people involved in this issue, nor will I presume to speak for anyone involved. What I do know is that it is very difficult to get a true assessment of a person's qualification from a social or business meeting.

People, when out today, are very guarded about what they say and how they say it. Those who we find at the center of controversy often make a very good impression. They say the right things and agree with the right concepts.

Those with negative information are rightfully afraid of legal suits, or are hoping to move the problem along. We are then forced to look for code words in dealing with people who are deceptive in an effort to determine if there is in fact a problem with their employment.

People will not follow orders is a phrase that raises alerts for me. This type of person often does not encourage input, or uses their position to demean others. Another possibility is they use their position to set others up to take the fall for misdeeds. This is only one example.

The problem we face today is the decades long vetting process of old is gone, replaced by moving before your problems catch up with you. This issue is not limited to medicine but found in almost all organizations. One of my personal disappointments was finding this problem rampant in the clergy.

Boards, at all levels, have got to be willing to antagonize, or possibly insult, candidates in an effort to determine their qualification. Do not contact my employer has become a screen, along with a select list of references who may not have a working relationship with the person, to cover bad behavior. Not firing someone because it will look bad is not an excuse to allow them to destroy an organization.

Steve Lucas

Anonymous said...

I wish this problem were rare, but it is not. A similar situation occurred in my own hospital system far away from Massachusetts several years ago. The President and CFO voted themselves huge pensions and then left, followed by progressive tension between the next (internally promoted) CEO and the medical staff, followed by an anonymous leak to the local newspaper, followed by a JCAHO inspection and loss of accreditation, etc., etc.

The real question is, what is the root cause of all this executive misbehavior in hospitals? Is it unique, or just part of more generalized CEO behavior in corporations? I personally think it has to do with a business/corporate mentality now in health care which attracts those with only a business mentality, leading to generalized-type corporate CEO misbehavior.
Of course, an M.D. degree does not inoculate against such behavior, as evidenced by the former head of United Health.