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Plot Thickens Regarding Memorial Hospital Payouts

May 07, 2012

Americans for Prosperity-Colorado today called on Colorado Springs Mayor Steve Bach and City Council to expand an inquiry, ordered last week, into whether a $1.15 million severance package approved by a fired board for an outgoing CEO is legally binding, after a document surfaced (attached) indicating that a group of 22 Memorial physicians voiced “no confidence” in the CEO back in November 2011. Despite such internal dissent, Memorial’s unelected trustees gave then-CEO Larry McEvoy a $120,000 pay raise in January 2012, as well as a now-controversial severance package totaling $1.15 as he headed for the door.

This raises questions, said the group, about who in leadership knew about the physician’s protest, when they knew about it, and why this critical piece of information doesn’t appear to have been more widely shared with people ostensibly in charge of the city-owned enterprise.

AFP-Co State Director Jeff Crank, who broke the story on his radio show Saturday, said that any city inquiry into the severance package should also explore who on City Council and Memorial’s recently-fired board of trustees knew about a meeting that appears to have taken place last November, according to the memo, between representatives of 22 whistle-blowing physicians and at least one member of the Memorial board. “It just boggles the mind to think that this critical piece of information, highly relevant to internal hospital operations and morale, wouldn’t have been shared not just with all Memorial trustees, but with members of City Council,” said Crank. “And why they would have under these circumstances approved a $120,000 pay raise for Dr. McEvoy in January, plus a $1.15 million severance deal just four months later, is also baffling.”

Crank wants to know whether this information was withheld by key trustees from colleagues and City Council – something that would seem to constitute a dereliction of the board’s oversight responsibilities and fiduciary duties. At least one council member who appeared on Crank’s show Saturday, Angela Dougan, said she had no recollection of being told about the physician’s rebellion. She only learned about it last week, when the memo was shared with her.

“The question of who knew what, and when they knew it, is critical to understanding whether trustees were actively involved in covering-up this critically important piece of information,” said Crank, “or whether some hospital and city insiders knew about these problems but weren’t going to let them get in the way of throwing public money Dr. McEvoy’s way.” Crank said the implications were troubling, either way.

The memo represents a list of complaints that was presented on behalf of 22 physicians to two trustees at a meeting prior to McEvoy’s salary increase in January, including:

1. Lack of trust in current administration to deal fairly with physicians and to follow through on commitments;
2. Lack of confidence in current administration to operate the Health System competently and to remove barriers to good patient care, ease of physician practice and good business practices;
3. That PLT and the SDC members not elected at-large do not represent the majority of physicians;
4. That physicians are not valued for their experience and expertise in running their own practices;
5. That the current administration, in spite of lip service to the contrary, is only interested in employment models for physicians;
6. That the health system treats physicians and patients as commodities;
7. That physician groups now employed by MHS came from practices that were not self-sustaining and therefore represent a financial drain on the health system;
8. That the current administration has painted a picture for the Board of Trustees that does not reflect most physicians’ perspective;
9. That not only individual groups of physicians but also the Medical Executive Committee have been marginalized by the current administration;
10. That results of the Press-Ganey Physician Satisfaction Survey conducted in April 2011 have not been adequately addressed or remedied;
11.That the falling volumes and marginal financial performance is in large part due to the above current realities at the health system and will continue to drive away physicians and their patients;
12. That these issues are especially noteworthy because of their consistency among the majority of physicians present.

It concludes with a resolution expressing “no confidence” in hospital administrators and calling on the replacement of the current administration as part of any lease deal approved by voters. “The independent medical staff at MHS does not support any lease proposal that does not include replacing current administration,” it said.

Crank asked that the ongoing inquiry into the legality of Dr. McEvoy’s severance package be broadened, in order to answer the question of who knew about the physician’s protest, and when they knew about it, as well as who on council was consulted with on the pay raise or severance package before they were approved by trustees. “There are questions here that go well beyond just the legality of the severance deal,” said Crank. “We won’t know why things went this badly wrong, or be able to restore public trust in these institutions, until we have more insight into whether the trustees were acting alone, or whether they were getting a nod and a wink from others in city leadership.”

Stay tuned for further developments.

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