March 27, 2009
Dear Providence employee,
I am writing to inform you about some difficult decisions that will be made over the next two months to address current financial challenges and to ensure that our Providence ministries in Spokane and Stevens counties can continue to weather this serious economic recession. I know you are aware from previous communications that the financial outlook is challenging.
We as a system have experienced significant investment losses; the state budget cuts to hospitals and health care will be drastic; and, in keeping with our Mission, it is inevitable that we will treat many more uninsured and underinsured individuals in the months ahead. What you may not be aware of is that Providence Health Care is already experiencing significant financial challenges year-to-date in 2009. At this point, we are $9 million behind budget and this gap is increasing monthly. The economic recession is part of the cause, but we also have some productivity and expense overruns that have contributed to our poor financial performance.
As such, in addition to curtailing as many non-mission critical expenses as possible, we have made the difficult decision to implement some level of staff reductions in the Spokane hospitals during the months of April and May. As a faith-based organization, we consider any action that impacts our employees as an extremely serious step and, therefore, a great deal of work is being done to ensure that we minimize the number of people who will be directly affected. At this point we do not know how many staff will be impacted, but we will keep you informed as our internal analysis and that of the Wellspring consultants continues.
We know this news is unsettling for you and your families. Our commitment is to ensure that these changes occur with the deepest concern and compassion for employees. And where possible, we will work diligently to find opportunities within our own or other Providence ministries for those who are affected.
We are also committed to ensuring that throughout this challenging time, we continue to provide the high level of quality and service for which we are known to patients and their families.Through it all, Providence is committed to making the right decisions based on our values of respect, compassion, justice, excellence and stewardship. Our Catholic ministry has been in existence for over 123 years. Throughout our history, we have triumphed over many adversities. We are absolutely confident that we will emerge from these difficult times and will continue to fulfill our Mission for many generations to come.
Future correspondence said that staff reductions would number about one tenth of the overall staff. Now, this announcement of dire financial straits would come to surprise to many on the staff for several reasons. First, not but weeks earlier, Elaine Cuture, COO of Providence Sacred Heart Hospital, told a meeting upper staff that the system was making $8 billion yearly and expenses of 9 million dollars weekly (or about half a billion in expenses)
Furthermore, according to their latest financial statement, the Providence system has just over $1.7 billion in investments, including more than $200 million in cash. (page 21) So, it appears that the system shouldn't have any trouble paying their staff. Furthermore, when Agwunobi says that Providence is "$9 million behind budget" all this means is that they are $9 million behind the estimates they set. That certainly doesn't necessarily mean the system is in such dire straits that they need to cut staff.
Now, while lay offs have been announced only a handful of upper managers have actually been laid off. As such, the bulk of nearly 300 people yet to be laid off still haven't been identified. As such, staff morale is low. There is bickering and some back stabbing. Finally, while lay offs have been announced, the system has not yet announced that any services will be cut back. As such, it is entirely possible that the layoffs will create a situation in which the system will simply not have enough staff for all the services. You simply can't have any other situation if you cut staff but not services. Such a situation will put all the patients in danger.
Now, you might be asking why you should care. Unless you work at Providence or are a patient, these events are not that important. What is important is that the person, Dr. Andrew Agwunobi, is allowed to orchestrate these lay offs at all. About a year and a half ago, I wrote a piece about Agwunobi (Dr. Andy as he likes to be called) entitled Why is this Man Working? That was two jobs ago. Since 20001, he has had no less than six jobs on both coasts in four different cities. Make no mistake, Dr. Agwunobi wasn't just upwardly mobile. He has been in a position of CEO or board director in each of these positions.
In 20001, he took over as CEO of South Fulton Hospital in Atlanta. This is a 75 bed hospital that primarily serves the poor. When he took over, JCAHO, the organization that oversees hospitals, gave a marginal but passing grade to South Fulton. Dr. Agwunobi left South Fulton in 2003 and a couple months later JCAHO failed South Fulton and placed it on probation. Of course, it was up to successors to clean up the mess he started. He then moved onto Grady Hospital. About a year later, CMS, a division of Health and Human Services, issued a report on Grady Hospital and its conclusion was
Grady presents an immediate and serious threat to the health and safety of the patients
In the aftermath of this report, he was removed as CEO. He then became the COO of St. Joseph's medical center in California. He lasted there about a year, and then moved to Florida to become a board member of Wellcare. (another health care system and this was located in Florida) He stayed at Wellcare for six months, cashed out about a million dollars worth of stock options, and moved onto head the AHCA (a government agency in Florida's Department of Health). His first move as head of AHCA was to investigate none other than Well Care. His department partnered with about ten government agencies to raid the offices of Well Care. Immediately following the raids, the stock of Well Care plummetted. He stayed head of AHCA for about a year until the heat of the clear conflict of interest of raiding his former employer finally caused him to resign (though local news claimed he was looking to spend more time with his family) Now, he has spent the last six months as CEO of Providence.
Now, try and connect the dots. We have an incompetent and a corrupt individual. Everywhere he has been has ended in disaster. South Fulton took several years to get out from under the probation slapped on it in the aftermath of Agwunobi's reign. Grady was nearly shut down at the end of 2007 by JCAHO. Wellcare no longer exists in nearly any form. What do you think will happen to Providence Health Systems. We have an indivdual claiming that the system is in dire financial straits even though all the evidence says otherwise. There's no way to verify what he is saying. Unless he augments his plan, he will create an understaffed hospital that will simply be a danger to the patients, much like the situation he lead at Grady Hospital.
The real story is NOT the situation materializing at Providence. Anyone who has followed his career could predict this. Furthermore, the over under is another nine months before he moves onto continue his reign of terror elsewhere, likely the East coast since that's the pattern forming now. The real story is how the board of Providence could hire this guy in the face of such overwhelming evidence that he is nothing less than a menace to any entity that gets near him. Isn't it their fiduciary duty to conduct the sort of research I just did? I asked how he could still be working and since two more employers gave him employment. How much more damage will he do to the nation's health care system before people finally say enough is enough.