[StBernard] Some St. Bernard Parish Hospital staff and management leave, many cite board control

[Westley Annis]

Some St. Bernard Parish Hospital staff and management leave, many cite board
control
 By Benjamin Alexander-Bloch, Staff Writer 
on October 19, 2012 at 4:53 PM, updated October 19, 2012 at 8:33 PM

For seven years after Hurricane Katrina, St. Bernard Parish has endeavored
to rebuild itself. New schools have been opened and public infrastructure
has been repaired. A hospital was one of the last major hurdles to recovery,
and in September, the new public St. Bernard Parish Hospital officially
opened its doors.

But within its first month, the nascent hospital has seen nearly half of its
administrative managers leave or resign, and the management group that had
contracted to run the facility recently announced it is pulling out.
Officials say the shakeup will not affect daily operations at the hospital,
which has seen up to 80 emergency room patients and 19 overnight patients a
day.

Wayne Landry, chairman of the board that oversees the St. Bernard Hospital
District, said that the departures simply are "growing pains of a start-up
hospital." But officials with the nonprofit Franciscan Missionaries of Our
Lady Health System, which was to manage the $70 million facility in
Chalmette, and some current and former hospital employees have raised
questions about the role Landry and the board want to play in the day-to-day
running of the hospital. They say Landry, a former at-large parish
councilman who ran a bruising but unsuccessful campaign for sheriff last
year, meddles too much in administrative affairs and has forced out people
he sees as disloyal to him while recruiting allies.

"We run hospitals all over the state, and have done so for a long time, and
we wanted to bring that experience to this relationship," she continued.
"But we decided if we can't be effective to the patients of this parish,
then we felt there was no reason to be there."

The issues even bubbled to the surface at a recent St. Bernard Parish
Council meeting, where councilmen grilled Landry over the extent of his and
the hospital board's control over daily operations.

"Do you think that is ethically correct to be doing that?" Councilman Nathan
Gorbaty asked, referring to the extent of the board's control. "There are no
checks and balances right now."

Councilman Ray Lauga added that he had "envisioned the (hospital) board as
more of an oversight board."

Landry told the council what he had earlier told The Times-Picayune, that
the Franciscans left because they wanted to operate with "layers and layers
of management," whereas the hospital board wanted to run the business more
frugally. And in terms of ethics, Landry says the board is completely within
its legal right to oversee the hospital's day-to-day operations.

The hospital has been a priority of parish officials since Katrina as they
tried to repopulate the parish. The parish remains about 40 percent smaller
than it was before the storm, with a current population of about 40,000.

A millionaire who owns the Ferncrest Manor Living Center nursing home and
the small acute-care St. Catherine Memorial Hospital in New Orleans, Landry
won an at-large St. Bernard Parish Council seat in 2008 based in part on
campaign promises to speed hospital construction. Before his term on the
council ended last year, he had fulfilled those promises by successfully
spearheading that drive.

But now some have questioned how much control he plans to exert over its
operations.

Board oversight

Landry and at least one other board member have publicly criticized the
Franciscans' management, particularly Tim Burke, whom the Franciscans
installed as chief executive officer.

Board Treasurer Jim DiFatta said Burke was "disengaged" and added, "I'd like
the CEO to document how many days he showed up to work the last 18 months."
Both Landry and DiFatta accused Burke, who has left the hospital, of hiring
more staff than necessary.

Landry has taken on the CEO's duties while the board searches for someone
new. The board also has recently given DiFatta, a former accountant,
authority to oversee the work of the hospital's interim chief financial
officer.

And board member Andrew Sercovich has begun overseeing the gift shop, the
security department, and the hospital's food and nutrition services.

Landry said that neither he nor the other board members are paid for their
work on the board, or for their new, additional duties. Landry said a new
CEO would be chosen by the board and likely will report directly to the
board.

St. Bernard Parish Councilman Guy McInnis suggested having one
representative from the administration and one representative from the
council be part of the CEO search committee. Landry said he would have to
bring that to the board, but indicated he didn't see it as a real
possibility.

The Franciscan group, which is based in Baton Rouge and administers around
1,700 hospital beds statewide, signed a contract to manage the hospital in
March 2011. The contract was to last for an additional five years after the
hospital's opening.

The Franciscans' flagship hospital is Our Lady of the Lake Regional Medical
Center in Baton Rouge, and it also has signed on to run the new 80-bed
hospital planned in eastern New Orleans.

"Do you think that is ethically correct to be doing that?" -- Councilman
Nathan Gorbaty

After the St. Bernard Parish Hospital was licensed and accredited -- which
occurred in mid September -- the board would serve as the governing body and
the Franciscans, through Burke, would "be responsible for day to day
operations, subject to the board's oversight and review in accordance with
the terms of the management agreement and applicable state and federal
regulations," according to a February agreement.

The Franciscans have told the board they are owed $953,758.82 for their work
since 2011. The money was to be paid through about $11.5 million in New
Market Tax Credit funds, which the hospital received last month. Harrell
said this week that the Franciscans still are awaiting payment. Landry and
other board members said that the board and the hospital's interim Chief
Financial Officer, Joseph Kemka, are reviewing the Franciscans' invoices.

While parish councilmen questioned Landry on that bill, Landry said the
board plans to negotiate some reductions and then will pay the tab, possibly
through a payment plan.

Layoffs, resignations and loyalty

In recent weeks, 40 percent of the hospital administration's approximately
25 managers and directors -- at least 10 people overall -- have either been
fired, left, or given notice. The hospital board has not released exact
numbers, but based on interviews with staff, The Times-Picayune compiled a
list of names and Landry confirmed most of the people on it.

Landry said that some of those employees will continue working part-time and
that not everyone who is leaving is doing so because of discontent with the
hospital's management structure.

Landry defended the layoffs, saying they will save the hospital several
hundred thousand dollars annually. "By being frugal, you avoid financial
problems," he said.

Landry called the moves a "reduction in force" rather than firings. "Firing
would be due to them not performing well," he said. "But we just reduced
force."

In an email to hospital employees earlier this month, Landry said "no more
reductions in force are necessary well into the foreseeable future!"

Council members aren't alone in questioning Landry and the board's role in
managing the hospital. Several former and current hospital administrative
employees interviewed over the past month said they think Landry and the
board exert too much control and insist on political fealty.

Craig Pennington, who recently resigned as the hospital's infection
preventionist, said: "Wayne would go around asking people if they were loyal
to the board."

And Gretchen Smith, the longtime executive assistant to the hospital board
who says she was pushed out about two months ago, said the sense among the
employees is "that your loyalties couldn't lie with Burke, that they had to
lie with the board, and in terms of loyalty to the board, that meant Wayne."

Allegations of cronyism

Some former and current employees, as well some members of the Parish
Council, also privately say the hospital has hired a number of people who
worked for Landry's sheriff campaign or have other personal connections to
him. Based on conversations with current and former staff members, The
Times-Picayune compiled a list of about 10 such employees, and showed them
to Landry earlier this month.

Landry said those hired were more than qualified for their jobs. As for
personal connections, Landry said that's largely due to the parish's small
population.

"The parish is small and I am going to know most of the people who apply to
work here ... and 40 percent of the parish voted for me" in the sheriff's
runoff last fall, he said.

Landry says that at times he has "pre-interviewed" job applicants, but that
final hiring decisions were up to directors. But several directors
disagreed, saying Landry would push some job candidates through and strike
down others.

Landry denied those charges. Of the hospital's 200 employees, he said "there
are many who didn't support me during the election, even supported my
enemies ... There are 14 people I know of (who work at the hospital) who
were dead against me politically.''


As for questions about his role in managing the hospital, Landry says the
February agreement envisioned him taking a lead role. It said he would be
"the leader on activation activities" and have the primary role in "ensuring
timely opening, licensure and certification of the hospital."

That agreement also notes the departure of another Franciscan manager, Frank
Folino. Harrell, the Franciscan spokeswoman, said Landry pushed Folino out
even though "Folino was accountably carrying out his responsibilities to the
project."

When Landry fired four hospital employees the week before the Franciscans'
departure, Harrell said that the Franciscans again saw that as an
unnecessary and inappropriate exercise of Landry's control.

"If Mr. Landry is going to make hiring and firing decisions, that is just
unacceptable," she said. "That level of control and that level of
participation by a board is very unusual."

She said that ultimately Landry and the board's involvement in such
on-the-ground decisions is what prompted the Franciscans to leave.

"Mr. Landry has been very involved all along and his intention was to
continue being very involved," she said.