Do Profits Come First at Vegas Hospital?

LAS VEGAS —  In a city known for its freewheeling, money-grasping culture, Columbia Sunrise Medical Center seems right at home. This is a hospital that once raffled Caribbean cruises to physicians who admitted the most patients on slow weekends.

And that was before the hospital got a new owner four years ago: Columbia/HCA Healthcare Corp., whose aggressive business tactics, local medical people say, made the previous owners look like nickel-slot players.

Some of those practices have gotten Columbia, the nation’s largest for-profit hospital chain, into big trouble. The Nashville-based firm is a target of a massive federal investigation that has led to indictments of three middle managers for alleged Medicare fraud, with more indictments expected.

The federal probe has not reached Sunrise. But as the flagship of Columbia’s 340-hospital chain, Nevada’s largest medical center--which has treated casino high-rollers, the state’s top politicians, and such Las Vegas celebrities as Debbie Reynolds and Wayne Newton--is attracting a lot of unwelcome attention on its own.

A former Sunrise executive, Mark Gardner, has told state and federal authorities and insurance investigators the hospital was rife with improprieties and illegal behavior. He claimed it inflated Medicare claims, paid illegal kickbacks to doctors and turned away the uninsured--including a homeless man who died on the hospital lawn an hour after he was discharged from the emergency room without being tested. Gardner’s claims have sparked an investigation by Nevada’s attorney general.

Gardner, who was an administrative vice president, says he became fed up with the climate at Sunrise and took a buyout in mid-1996. He is shopping a book and pitching a movie deal based on his experiences at Columbia.

Gardner has attracted investigators’ attention because he has accused Sunrise of illegally inflating Medicare billings--a complex practice known as “upcoding,” which is a central focus of the federal probe. He also has accused Sunrise of using illegal financial inducements--including bogus hospital “directorships” and income guarantees--to reward doctors who admitted the most patients.

‘Flat-Out Lies’

In an interview, Jerald F. “Mitch” Mitchell, Sunrise’s chief administrator, dismissed Gardner’s allegations as “flat-out lies,” denying that the hospital engaged in Medicare fraud or pressured physicians to admit patients.

Mitchell, who says Gardner’s job was eliminated in a management restructuring, calls Gardner “overly aggressive” and a disgruntled former employee.

Frank Nemec, the hospital’s chief of staff, accuses the hospital of being so focused on profits that it has cut staffing below safe levels. Nurses who are trying to organize a union at Sunrise contend thin staffing has led to medication errors, injuries and inadequate monitoring of patients.

Gardner says the pressure to cut staff grew particularly intense in early 1996 when Columbia executive Jamie Hopping became head of the company’s western region. “Those months under Jamie were like hell,” he said. “We were already short-staffed and she wanted more cuts.”

Hopping, a protege of ousted Columbia CEO Richard L. Scott, is one of several high-level executives with close ties to Scott who have resigned in the wake of the widening federal probe. Hopping formerly oversaw Columbia’s Florida hospitals, which have been a key target of the federal inquiry.

Hopping could not be reached for comment.

The hospital fired an anesthesiologist for leaving a woman in childbirth to attend two critically ill emergency room patients. Nevada’s medical board commended the physician, while hospital regulators reprimanded Sunrise for failing to ensure that anesthesiologists were available for emergency room patients.

The Wrong Blood

The federal Health Care Financing Administration and Nevada officials are investigating the April death of a Sunrise surgical patient who was given the wrong type of blood. A laboratory technician--who later was fired by the hospital--misidentified the patient, state regulators said.

But the Service Employees International Union, which is trying to organize Sunrise nurses and other workers, claims the death was the result of “chronic under-staffing and “impossible workloads” for medical technicians that has increased the likelihood of medical mistakes. Sunrise spokeswoman Ann Lynch calls the incident “a tragedy” caused by human error not staffing problems.

In the interview, Mitchell produced a thick blue binder filled with thank-you letters from patients and their families. “We’ve been surveyed almost to death with no material findings” about poor patient care, Mitchell said. He noted that Sunrise was recently awarded accreditation “with commendation” from the industry’s top hospital review organization. And he claims that a recent poll conducted for the hospital by the Gallup organization found that more than 90% of Sunrise patients are “satisfied” with their care.

However, Sunrise has twice been reprimanded by federal regulators during the past three years. And some current and former employees paint a picture of a hospital they say was so obsessed with profitability that it compromised patient care with bare-bones staffing and inferior-quality supplies and equipment. They also contend that Sunrise provides as little charity care as possible.

Such claims go beyond the allegations of billing fraud and questionable physician recruitment tactics that have pushed Columbia/HCA into the headlines around the country. Much less attention has been focused on how Columbia hospitals perform their essential task: treating the sick.

The controversy at Sunrise highlights the issue of patient care at one of Columbia’s largest and most profitable hospitals. And it raises the question of whether there is an inherent conflict between investor-owned hospitals goals of maximizing profits and community hospitals’ traditional role of treating the sick--and the needy--with compassion.

“These people [don’t care] about little kids with brain tumors,” says a physician and former staff leader at Sunrise.

To many, the impression of a heartless corporation has been fostered by Scott’s hard-nosed management style and occasionally insensitive public remarks.

“Do we have an obligation to provide health care for everybody?” the former CEO once asked in an interview. “Is any fast-food restaurant obligated to feed everyone who shows up?”

‘Focus’ on Quality

Columbia/HCA’s new management takes a more conciliatory posture. Once this investigation is cleared up, says spokesman Jeffrey Prescott, “quality patient care” will be the name of the game. “There is no question that will be our main focus going forward.”

As new CEO Thomas Frist Jr. put it at a July news conference, “We need to have the perception out there that we care.”

Columbia hospitals as a group have performed respectably in accrediting reviews and a few independent surveys that seek to measure hospital “quality.” Roughly a third of its 340 hospitals have received the highest possible rating by the Joint Commission on Accreditation of Healthcare Organizations, a quality review group that is considered the “Good Housekeeping” seal for hospitals.

(Three executives indicted in the federal probe worked at one of Columbia’s top-rated hospitals in Fort Charlotte, Fla.)

Columbia’s hospitals have come under attack in many cities for skimping on patient care and charitable services.

While a struggling hospital might slash medical costs or charity care as its only means of surviving, Sunrise generates the kinds of profits that most hospital chiefs dream about.

It had net billings of $305 million in 1996, with earnings of $64 million before interest, taxes, depreciation and amortization--a key hospital financial yardstick--a figure that Columbia officials acknowledge makes Sunrise one of its most profitable hospitals. That is a noteworthy accomplishment in a company that was a darling of Wall Street for its hefty profits.

Columbia Changes

Mitchell insists that Sunrise’s profits are merely “respectable.”

Some nurses and physicians say the staffing shortages stem from a significant change Columbia made when it took over the hospital. Instead of adjusting staffing daily based on how sick patients are, Sunrise more or less predetermines staffing levels, they say.

That is important because, as at many hospitals across the country, Sunrise patients are on average sicker and are being discharged earlier than a few years ago--largely the result of insurers’ efforts to cut costs by limiting hospital stays.

Before Columbia, the hospital would call in more nurses and other workers if an unusually high number of sick patients were admitted, Sunrise doctors and nurses say. Such patients require more care from nurses: more medications and monitoring and more time talking to families about post-hospital care.

Industry officials say it is standard practice at hospitals to adjust nursing staff for each shift based on the severity of patients’ illnesses.

Mitchell, who came to Sunrise in September 1995 from a Columbia-owned hospital in Wichita, Kan., insists that Columbia did not change staffing policies after it bought Sunrise. “We staff by severity of illness,” he insists.

But Chief of Staff Nemec says, “The patients we are admitting are much sicker and require much more intensive nursing care than we have. The burden on the nurses has been tremendous.”

Nemec has said that he sometimes keeps his patients in the intensive care unit longer than he would like because he isn’t confident that patients will get adequate nursing care on the general floors.

Gardner says Columbia’s staffing policies are no accident. “Our nursing staff was not based on quality of care but on how much money we could make,” he says. “When you cut nursing staff,’ he says, “you can virtually improve earnings overnight.”

Mitchell says the hospital’s staffing has more than kept pace with a 50% increase in admissions since 1993. But figures from HCIA Inc., an independent health care data firm, show that the ratio of full-time staff to the hospital’s average daily patient count--a key measure of hospital staffing levels-- actually fell 19% from 1993 to 1996.

Contrast in Care

Jerri Woolston, 32, an intensive care nurse and union supporter, contrasts the Las Vegas hospital with a poor Catholic-owned hospital in Salt Lake City where she worked. When finances got tight, she said, “the nuns would come and help us by consoling grieving families and transporting patients.”

Before Columbia, Woolston says, her unit had one nurse assigned to each of the sickest patients. It is now common for nurses to look after two or even three seriously ill patients each.

It is difficult to document the effect of such thin staffing on the patients, she says.

But she describes the situation as “dangerous,” resulting in “too many near misses.” “Most of the time they’ll have a dramatic drop in blood pressure or something and we save them. But sometimes, a week or two later, they may die of kidney failure or something and you wonder, was it because something wasn’t caught quickly enough?”

A former Sunrise physician has accused the hospital of retaliating against him after he called attention to the hospital’s violation of federal staffing standards.

In late August 1996, anesthesiologist Thomas C. Yee was attending a woman in childbirth when, at about 3:30 a.m., a nurse alerted him that a patient was hemorrhaging badly in the emergency room. The nurse told him she’d been unable to locate another anesthesiologist within the hospital, according to a subsequent federal report on the matter.

Perilous Vitals

After checking the condition of the woman in labor, Yee said in an interview, he rushed to the emergency room to assist the hemorrhaging patient, whose blood pressure and heart rate were perilously low. Less than an hour later, nurses summoned him to treat another emergency room patient.

Sunrise fired Yee from the medical staff, accusing him of abandoning his first patient. But Yee, who has a lawsuit pending against the hospital over its action, contends that the problem stemmed from the hospital’s failure to have an anesthesiologist on call.

When the Nevada Board of Medical Examiners, responsible for physician discipline, reviewed the incident, it concluded Yee had done nothing wrong. Instead, it took the extraordinary step of publicly commending him for his actions.

Sunrise officials say they had a procedure for summoning anesthesiologists to the emergency room. But state and federal health care investigators found Sunrise in violation of federal rules requiring a formal on-call procedure for anesthesiologists. The agency warned that the hospital would be banned from the Medicare program if the problem wasn’t fixed immediately.

Sunrise officials say they have since put in place a more formal system for reaching anesthesiologists. In a two-day investigation last April, regulators found that three of four emergency surgery patients whose records were reviewed waited at least 35 minutes for anesthesia services, with one waiting more than two hours. Rick Panelli, acting chief of the Nevada health agency that regulates hospitals, said the small sample suggested “significant systemic problems,” at Sunrise.

Care Limits Alleged

Although Yee continues to work in Las Vegas, he says in his lawsuit that he was professionally harmed by Sunrise’s actions.

Gardner and others say that Sunrise also tries to limit care for the uninsured. According to Gardner, Sunrise “routinely refused emergency room care to those who couldn’t pay.”

“So what? Why is there a county hospital in town?” said spokeswoman Lynch, a vice president, when asked about such claims. ‘I’d be surprised if a for-profit hospital gave any charity care.”

Lynch quickly added that Sunrise contributes its “fair share” of charity care and noted that, unlike tax-exempt nonprofit hospitals, Sunrise pays taxes that go toward public services.

In 1994, Sunrise was threatened with loss of its Medicare contract after federal regulators, investigating a “patient dumping” complaint, cited it for improperly discharging an uninsured homeless man from its emergency room.

That August, paramedics brought a disoriented man to Sunrise’s emergency room. He was discharged without a CAT scan. Hours later, the man went to a small Catholic hospital, which ran a scan that revealed a brain hemmorrhage requiring surgery.

Sunrise revised some procedures and sponsored education programs for emergency-room workers.

Homeless Man Dies

But a few months later, Sunrise failed to perform tests on a homeless man in its emergency room. About an hour later, after guards escorted him out, the man dropped dead of pneumonia on the hospital lawn.

Gardner readily admits he was the company man nurses had accused him of being. And he was well-rewarded for it. At 30, he said, he earned $55,000 a year. His work reviews were laudatory.

He adds: “I didn’t work for the customers or the patients. I worked for the shareholders.”

Gardner, now unemployed, lives in his hometown of Louisville.

He once told a newspaper he “committed felonies every day” while at Sunrise. Pressed for details about some of his dicier allegations, he responds, “I don’t want to implicate myself.”

Sunrise’s Mitchell grows visibly angry when asked about Gardner’s claims, and says: “I have to question why he hasn’t been indicted for all those felonies he says he’s committed. Why is no one investigating him?”