by Don Barnett and Ira Weiss
Numerous phone calls and e-mails to both the WMC CEO and CFO requesting the chance to speak by phone, in-person or by e-mail with anyone at WMC went unanswered. This piece is based on interviews with an auditor, doctors, and nurses who have or have had an association with WMC. This is the first part of a 2-part series on the county hospital.
As soon as elections for Williamson County Commission were over in May 2018 the Commission gave the local Chamber of Commerce an additional annual $100K to promote more growth. The $1.5 million of county taxpayers’ money the Chamber has received over the last 5 years is clearly not an investment that is working out well for taxpayers. In another expected post-election move the Commission raised county property taxes by a modest 3.3%, the second increase in 3 years. This increase barely makes a dent in the liabilities the county has accumulated and will most assuredly be followed shortly by additional property tax increases.
Adding to the growing debt the county carries – the $738 million in debt works out to more than $9,000 for each household in the county – the county hospital looms as a potential money pit.
Williamson Medical Center (WMC) has racked up $4 million in operating losses since it launched its latest venture, The Bone and Joint Institute. The red ink has not sparked any publicity nor any statements of explanation from the County Commission or the WMC.
The hospital is a not-for-profit, county-owned facility, one of a very small and dwindling number in Tennessee. Were the hospital to fund its capital improvements and operations as a stand-alone entity it would pay more in interest for its borrowing and be required to undergo a thorough audit. As it stands now, it avoids both a public audit and higher interest rates for borrowing because the county taxpayer is ultimately on the hook for the hospital debt.
Any discussion of changing the status of the hospital – either by leasing or selling to another hospital – is stone walled by reference to Tennessee state statutes that restrict the use of proceeds from such a deal. The “poison pill” strategy was written into state law by WMC Board Members and County Commissioners working with the Tennessee legislature. Of course, these statutes could be changed anytime if there was a need.
The Bone and Joint Institute was basically presented to the County Commission as a fait accompli. Most Commissioners were unaware they had signed on to the project until ground-breaking in April 2018. After construction had begun and millions already spent, the hospital asked for, and got, $45 million from the County Commission to build the new facility. The new clinic hired away orthopedic surgeons from Vanderbilt Hospital with the promise of a substantial increase over their Vanderbilt salary, possibly a violation of the federal rules and regulations that govern hospitals. (Hospitals, especially non-profits, operate in a highly regulated environment. In an earlier arrangement intended to favor affiliated doctors, the hospital paid a $750,000 fine for leasing clinic space to doctors at less than market rates.)
Vanderbilt Hospital took a bit of a cold bath when WMC poached their physicians, but that doesn’t compare to the bath county taxpayers are about to take with WMC’s latest move.
The WMC board was in such a hurry to get the clinic built they didn’t even inform the entire County Commission of plans until building had started. Oddly, even though the clinic was officially opened in April 2019, no surgeries have been performed there. The first surgery will happen in Spring 2020 according to sources.
Why is it taking a year after completion to bring the clinic fully on-line?
According to sources – both current and former WMC employees, in a move apparently taken to further sweeten the deal for the former Vanderbilt physicians, WMC is changing the Bone and Joint Institute from a non-profit to a for-profit hospital with some part of the private ownership going to the physicians on clinic staff. If so, this means county taxpayers have funded the establishment of a private, profit-making entity, which originally was presented as a county-owned, non-profit facility.
Re-negotiating complicated Medicare, Tenncare and other government and insurance contracts caused by the last minute change of direction has taken time and money in legal fees. Even hiring for ancillary staffing has been set back. Under previous plans, WMC employees would have transitioned over to the new clinic and remained WMC employees. Under the new structure they will no longer be WMC employees. Faced with loss of tenure in health and retirement plans in the new entity, many staffers are choosing not to go over to the Bone and Joint Institute.
The fact that the new clinic is not doing what it was built to do probably explains much of the recent months’ financial losses.
The restructuring will make it possible to keep the profits maximized for the new owners while losses are conveniently shunted off to the county.
Consider WMC’s Children’s Hospital, which has 16 beds, but logs less than 3 patients per day in the facility on average. With numbers like this, there is no way the Children’s Hospital is breaking even. Vanderbilt Hospital has no part of ownership, but manages the WMC Children’s Hospital, known as the Monroe Carell Jr. Children’s Hospital Vanderbilt at Williamson Medical Center. According to several former WMC staffers, this arrangement has resulted in the WMC Children’s Hospital sending paying patients to Vanderbilt Hospital while the WMC Children’s Hospital is more likely to keep those who cannot pay. You might call it “Vanderbilt’s revenge”.
In similar fashion the temptation will be great for the Bone and Joint clinic to offload its charity cases to WMC whenever possible.
At the very least, this is a system with no checks and balances and plenty of conflicts of interest. The County Commission and the WMC Board are so intertwined it is hard to imagine this situation ever changing. For instance, the WMC Board Chairman and the County Commission Chairman are brothers. The Williamson County Mayor is on the WMC Board and the Williamson County Schools General Counsel is on both the WMC Board and the County Commission! Two other County Commissioners also serve on the WMC Board. Yet another County Commissioner serves as the head of the Williamson Medical Center Foundation, a full-time salaried position paid out of foundation revenues. The foundation Director’s salary accounts for a large majority of the foundation’s revenues. That’s the definition of a sinecure. The foundation Director has never recused himself from a Commission vote on matters affecting WMC.
An auditor and several former staffers describe an environment at WMC of cover-up, strict control and punishment for those who point out issues, even if those issues relate to lethal malpractice.
Minor and not-so-minor venalities abound that wouldn’t be tolerated long in most of corporate America. For instance, one upper-level manager routinely places travel expenses (airfare, lodging and fees) for hospital staff to attend conferences on the manager’s credit card instead of the hospital credit card in order to reap travel points. When a staffer defended a whistle blower who was trying to expose a series of medical mistakes, the staffer’s prior personnel records were altered to put her in a poor light. This brazen document falsification was later acknowledged by the hospital attorney.
WMC and the County Commission have long evaded public accountability and have a lot of questions to answer.
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Don Barnett is a retired IT professional and freelance writer living in Williamson County. Ira Weiss is a retired security executive with 28 years of experience servicing U.S. government agencies, DoD, foreign governments, high-profile corporate, commercial and industrial clients, and property management companies. Certified Protection Professional (CPP-ASIS), Certified Master Anti-Terrorism Specialist (CMAS – ATAB), Analytical Risk Management Certified, NRA Certified Instructor, Jurisdictional Threat and Hazard Identification and Risk Assessment Certified who migrated from the Washington, DC area.