Thursday, August 18, 2011

The Best and the Brightest Behaving Badly

To err is human, and any group of humans can be expected to include those who stray.  However, the constant spin that surrounds most top leaders of health care organizations seems to suggest that these people are different.  In particular, the lavish compensation given leaders of health care organizations is often justified by claims that those in leadership positions are the best and the brightest. 

Catching up after a vacation afforded me the opportunity to go through a large volume of news stories, leading to a collection of those from the last year that showed the contrast between such compensation and behavior that was far from the "best and the brightest. "

North Memorial Health Care CEO Pleads Guilty to Engaging in Prostitution

As reported by the Minneapolis Star-Tribune, after David Cress "was arrested Sept 1 [2010] during a vice operation."  The plea bargain will allow that "the charge against him will be vacated in a year."

According to the health care system's 2009 IRS form 990, Mr Cress total compensation was then $984,412.  In addition, that year he received a SERP [ supplemental executive retirement plan] payment of $3,393,712.

Childrens' Hospital of Philadelphia Chief Counsel Pleads Guilty to Theft

As reported by the Philadelphia Inquirer:
Roosevelt Hairston Jr., 46, the former general counsel of Children's Hospital of Philadelphia, pleaded guilty today to stealing $1.7 million from the institution.

He could face six or more years in federal prison.

Although his attorney claimed that Hairston is not "a greedy person," he did live "in a 7,000-square-foot home."  The hospital's 2009 IRS form 990 showed that Hairston's total compensation then was $602,982.

Franciscan Hospital for Children CEO Dismissed for Financial Irregularities

As reported by the Boston Globe,
The board of Franciscan Hospital for Children in Boston, one of the country’s largest hospitals for severely disabled children, has fired its longtime chief executive, Paul J. DellaRocco, citing financial irregularities.

Board chairman Robert Needham said yesterday in written comments to the Globe that DellaRocco was 'inappropriately submitting and documenting expenses.'

'This type of behavior is clearly at odds with both our policies and our nonprofit mission,' he said. 'We therefore took proactive steps to remove him from the position.'

This seems worse because of the hospital's difficult financial position:
Franciscan, which has relied on donations and state Medicaid funding to cover its costs for most of its 60-year history, had struggled financially in recent years. In 2009, the hospital laid off 40 people, or 10 percent of its workforce, and asked all employees, including DellaRocco, to take a 2 to 3 percent pay cut.

Nonetheless, "the hospital had loaned DellaRocco $150,000 a year earlier to help him finance construction of a retirement home on the Caribbean island of St Martin...." Furthermore, findings released after divorce litigation revealed DellaRocco's lavish lifestyle apparently at the hospital's expense:
DellaRocco owns a company, Haelen Health Systems Inc., which has a management contract with Franciscan. He used Haelen’s assets to pay for many of his personal expenses, including entertainment and interest on his personal loan from Franciscan, according to Judge Dorothy M. Gibson of Middlesex Probate and Family Court in her findings of fact in the divorce. He and his wife invested more than $1.8 million in the St. Martin villa, much of it coming from Haelen, the judge wrote.

In the divorce, Gibson noted the 'upper middle-class lifestyle' the DellaRoccos enjoyed. They honeymooned for a month in Tahiti, Thailand, Bali, Singapore, and Australia. He furnished their $950,000 Weston home with more than $85,000 in furniture, jewelry, electronics, and antiques.

DellaRocco’s compensation from Franciscan was $225,000 in the fiscal year that ended in September 2009, according to the hospital’s most recent filings with the Massachusetts attorney general’s office. His total income, including wages from the hospital, capital gains, and profits from his company, was about $674,000 in 2007 and about $348,000 in 2008.

Slidell Memorial Hospital CEO Fired After Second DWI Arrest

As reported by,
Slidell Memorial Hospital's chief executive officer lost his job Thursday after a recent drunken driving arrest, his second in six years.

The nine members of the public, not-for-profit hospital's board of commissioners fired Robert Hawley Jr. at the end of a regular public meeting held at a cancer treatment complex he helped build. Immediately after his fate was decided, Hawley left the room silently, rode an elevator to the bottom floor, climbed into the passenger seat of a sport-utility vehicle waiting for him in the parking lot and drove off.

'Mr. Hawley's ... arrest ... made this decision necessary,' board Chairman Larry Englande said. 'As a community hospital, we insist upon the highest standards of care for the patients and families we serve.'

'We require that our physicians, nurses, employees and management team live up to those high standards. We must expect no less from our chief executive officer.'

The account of his arrest was as follows:
On the day he was jailed, Hawley drove a blue, convertible BMW past crossover No. 1 near the end of the northbound Causeway about 4 a.m. A bridge police officer reportedly noticed him weaving in and out of his lane. The officer got behind Hawley, but Hawley allegedly changed lanes and accelerated to about 80 mph, or 15 mph over the speed limit, still swerving, bridge general manager Carlton Dufrechou has said.

The officer turned his patrol lights on and pulled over Hawley immediately after they exited the Causeway. Hawley had bloodshot eyes and the smell of alcohol on his breath, the officer reported. He also allegedly swayed when he got out of the car, told the officer he was going home after 'having a couple of beers' on the south shore and performed poorly in a field sobriety test, Dufrechou said Thursday.

Hawley underwent a breath test. Although his precise blood-alcohol level has not been publicized, the test indicated that 'he was impaired,' or over the state's limit of 0.08, Dufrechou added.

It was Hawley's second DWI arrest since 2005. A state trooper pulled him over on the early morning of March 13 that year for supposedly driving left of center on U.S. 190 south of Interstate 12 near Mandeville. State Police alleged Hawley had an open alcoholic beverage in his car. He submitted to a breath test, registered 0.124 and spent several hours in jail.

Court records do not show how the case was disposed of. Hawley has declined to discuss it.

I cannot find any public record of Mr Hawley's compensation.


As noted earlier, we are all human, and we are all prone to failings.  That health care organizational executives sometimes are also prone to failings should not be news.  It is only because their fawning public relations departments and cozy boards have insisted they have no failings, which is why they are paid so much more than most of their dedicated employees who actually care for patients.

We should not expect health care leaders to be perfect.  However, we also should not award them power and pay as if they were.


Afraid said...

Oh my. I think I have to stop reading these posts before bed so I can sleep better.

Anonymous said...

The conduct is despicable. It is common practice for these CEO buffoons to use the hospital bank accounts as their piggy banks. Check out the immumerable leaders of a hospital system in Western Pa "earning" in excess of $1 million dollars per year; and their use of corporate jets.

Anonymous said...

We all suffer in our daily lives by the growing sense of entitlement by the general population. Friends teach at the local university tell of 18 year olds demanding time and better grades, because their parents are paying their salary.

Our local city, loosing population and jobs, demands paperwork and compliance to archaic rules because they, the politicians, need to feel important. I went to have a battery replace in a watch at a high end jewelry store where the watch was purchased and was told to come back the next day. They now always take a day to put in a watch battery. The jewelry store is entitled to make me return for service.

The recent riots in England show that entitlement can create a whole class of non-workers who demand more of everything, including the cell phones used to coordinate their attacks. In this country we are now providing cell phones to those who are on welfare free of charge.

Let’s not even start on the clergy.

It should not come as a surprise that those who are removed from the day to day operations, and difficulties of everyday life, should feel entitled. Medicine is a business and in many ways worse than most. There is a universal deference given to those in medicine, doctor or not, that has been used to lever bad behavior for personal gain.

My personal belief is that this is the tip of the iceberg. We, as the general public, do not even know of those who retire, or are allowed to resign, over inappropriate actions.

The drug/device companies will tell you they spent money bringing a product to market and they are entitled to sell it even if it, at best, does not work. Hospitals will tell you they are entitled to large amounts of money due to their good works, even if it is the staff doing the work, and the billing system is designed to maximize all income sources.

It appears that everyone is entitled, except those of us who are expected to financially support this system for all of those entitled persons.

Steve Lucas