Tuesday, 2 October 2018

The Adventures of the Purloined Bequest, the Resident Heiress, and the Hidden Hospital System

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The sport is afoot again.  A collection of contemporary articles inside the media defined a collection of instances whose mysterious interrelationships Sherlock Holmes may also simply properly have appreciated.

The Purloined Bequest

A singular article inside the Wall Street Journal, entitled "Judge Rules in Case of Fortune Tied to Buffett," first made this case explicit, but a pair of ancient past is needed to come to be aware of it.

The tale concentrated on Long Island College Hospital, in Cobble Hill, Brooklyn, New York.  [Full disclosure: this tale got my attention incredibly simply as a result of the very truth I grew up shut with the aid of way of in Brooklyn, and was born at that hospital, which was also the native hospital my people usually used.]   LICH has lengthy been the foremost network hospital for downtown Brooklyn.

The tale seemed to leap in 2011, per the WSJ,

 In 2011, Judge [Carolyn] Demarest accepted the merger of LICH and SUNY Downstate on the condition or no longer it'll maintain the charitable hospital going. As edge of the deal, the hospital transferred properties to Downstate estimated to be rate as a lot as $1 billion collectively, according to a past court docket docket order.

The merger was supposed to maintain LICH in operation as a network hospital and seller of acute care to the poor.  However, issues did now no longer work out.

 This year, however, Downstate announced plans to near the hospital, most effective to protests from Brooklyn citizens and native politicians.

'It is clean that the thought upon which this Court legal the move of property has been defeated,' Justice Demarest wrote in her Aug. 20 decision, together with that Downstate had breached its contractual obligations. She cited a 'legal and ethical responsibility' to proper her past mistakes in approving the merger.

She directed Downstate to return all property to the hospital's past owner, Continuum Health Partners Inc., which as a result of this truth said it'll probably properly now no longer take the reins. The court docket docket is anticipated to assessment assorted proposals.

The choose also found that hospital management had been raiding an big endowment fund meant for assorted purposes,

A New York state choose dominated this week that a struggling Brooklyn hospital ought to pay off tens of tens of tens of hundreds of thousands of greenbacks it borrowed from an endowment arrange with the aid of way of early investors with billionaire Warren Buffett.

The ruling goals to rectify the past use of the coins with the aid of way of Long Island College Hospital, that's hurting financially and was scheduled to close. Mr. Buffett in July told The Wall Street Journal that his past due friends, Donald and Mildred Othmer, would have felt 'betrayed' on the methodology the payments had been spent.


 The Othmers, natives of Omaha, Neb., who later lived in Brooklyn, had been longtime pals of Mr. Buffett's, and every invested $25,000 with the billionaire in 1961.

When they died-he in 1995 and she in 1998-they gave away a fortune estimated at $780 million, together with the $135 million permanent endowment for the hospital. The Othmer wills stipulated the pastime on the endowment will be used for running fees nonetheless it the foremost ought to be held 'in perpetuity.'

In a collection of court-approved transactions that started in 2000, the hospital borrowed from the payments commonly to meet short-term obligations and cover debts.

The hospital argued that the coins was important to maintain the hospital afloat, which it said the Othmers would have wanted. The transfers depleted most of the endowment, a outcome that got proper perfect here to faded after the Journal wrote concerning the state of affairs in July.

New York Times and Brooklyn Daily Eagle articles concentrated on the query of regardless of even if SUNY/ Downstate meant to near the hospital so it'll probably maybe promote its reputedly useful actual property belongings in a now stylish neighborhood, but now no longer on how the hospital fell into these dire straits.

There happen to be a pair of lingering questions -

-  If the losses and borrowing started in 2000, or earlier, who was guilty for them, given the offer day home house proprietors have only been in role in case you imagine that 2011?

Note that the phrasing inside the article above ("the hospital argued that the coins was important to maintain the hospital afloat") told that earlier than SUNY took over, the hospital was independent.  However, the article mentioned, albeit only in transient in passing, that the hospital had a past owner, Continuum Health Partners Inc.

-  How had been the losses explained once they occurred, and what was the rationale for  borrowing from constrained endowment as a response, actually of, for example, direct efforts to cut back losses or boom capital and revenue?

Note that the article implied that once SUNY acquired LICH, it acquired a pair of very useful actual estate.  Why did the past management of LICH now no longer assume promoting off a pair of of this actual property to clean up its debts?

-  Did mismanagement of the hospital outcome in extra losses, and did borrowing payments from the precept of the hospital's endowment to offset these losses amounted to extra mismanagement?

Meanwhile, a moment even extra weird tale about one assorted New York City hospital very fairly a lot simultaneously got media attention.

The Resident Heiress

The case first made it into the media in 2012, while the tabloid New York Post reported,

Beth Israel Medical Center milked reclusive copper heiress Huguette Clark for extra than $13 million in fees, donations or even a precious portray throughout her 20-year reside as a affected user - and grasping executives angled for $125 million more, her loved ones allege in surprising new court docket docket filings over Clark’s estate.

The alleged shakedown was illuminated in an electronic mail wherein hospital board member and former CEO Dr. Robert Newman referred to Clark as 'the best bucks contributing talent we’ve ever had,' according to court docket docket papers.

He told a colleague her 'potential has been overwhelming[ly] unrealized.'

At one point, he told to Clark that she pay very fairly a lot one-third of her estimated $400 million fortune to maintain the now-shuttered Beth Israel North on the Upper East Side open so she may also simply properly maintain dwelling inside the room she had refused to go away for 15 years regardless of being in nice bodily health, the papers allege.

But actually of addressing Clark’s crippling anxiety, hospital honchos completed on her fears, sexy in 'a concentrated effort, orchestrated on the maximum board and executive levels,' to get her money, court docket docket news obtained with the aid of way of The Post allege.

Clark’s loss of life final 12 months at age 104 trigger a fight over her estate. Her remote loved ones declare legal skilled Wallace Bock, accountant Irving Kamsler, private-duty nurse Hadassah Peri and the Beth Israel administrators manipulated the feeble Clark for her money.

The nurse, who obtained payments and items from Clark, stands to inherit very fairly a lot $34 million and Clark’s precious doll collection inside the now-disputed will. Beth Israel is to get $1 million.

The Paris-born Clark inherited her coins from her father, William, a rail and mining baron and former US senator whose wealth rivaled the Rockefellers’.

She went to Beth Israel North in 1991, while she was 85, after a physician found her emaciated and ill in indeed surely one in every of her three sprawling Fifth Avenue apartments.

She spent the final NULL many years of her life in dismal hospital rooms with the colors drawn and door shut even although there was 'no medical foundation for conserving her' past the primary few months, news show.

Clark was 'the proper patient' for the hospital, her loved ones charge, noting, 'She required no medical care, possessed large wealth, paid over $800 a day for her room, and grew to switch into progressively extra based on the hospital.'

'Beth Israel had a plan to subtly, but ever so persistently, court docket docket Huguette for the purpose of garnering items and lastly do a will in elect of the hospital,' court docket docket papers claim.

This case also appears to be about effectively to do donors and hospital executives.  Yet what makes it most weird are the circumstance of Ms Clark's hospital stay.  As a former intern, resident, fellow, and educating hospital attending, I can attest that the majority hospital administrators are concerned, if now no longer obsessed, with discharging sufferers quickly.  Hospital remains are recently paid with the aid of way of most insurers according to the patients' diagnoses, but now no longer their dimension of stay.  Long remains rate hospitals money.  Furthermore, unnecessarily lengthy remains expend instruments that may also simply higher serve acutely ill and injured patients.  Yet Ms Clark stayed an marvelous 20 plus years, with out any visible medical rationale.  No hospital official contested the truth that Ms Clark stayed that lengthy inside the NY Post article.

Furthermore, in a 2013 New York Times article, the hospital's lawyer, defending a parallel try to get properly the coins donated to the hospital, wrote

 Beth Israel had sold Mrs. Clark with 'a well-attended home the place she was capable to dwell out her days in security, relative nice properly being and comfort, and with the pleasures of human company.' Besides, he said, the quantity of coins she gave to Beth Israel was “not very big due to the fact that her huge wealth.”

Furthermore, a member of the Beth Israel fund-raising crew wrote in a memo disclosed throughout litigation,

 She was wisely sufficient with the aid of way of then to go home to her spacious rental at Fifth Avenue and 72nd Street, overlooking Central Park, Ms. [Cynthia L] Cromer said, but 'she requested if she may also simply properly reside inside the hospital longer: she feels mushy and safe, and her rental is being renovated.'

Never thoughts that the primary concern of the hospital is to offer acute appear to be after the sick and injured, now to no longer offer mushy retirement housing. But hospital managers are reputedly on record acknowledging that the hospital was simply providing Ms Clark with companies which will be at all circumstances potential in a retirement community, now no longer companies that acute care hospitals at all circumstances offer anybody   There is now no longer any proof that the hospital ever sold identical companies to any assorted patients.

The visible mystery, then, is

- why no user on the hospital, no doctor, nurse, or manager, or no visitor, regulator, accrediting agency, insurer ever wondered why the hospital was providing a lengthy run home to a former patient?

No reply to the query has seemed in any policy I even have visible of this case, together with a September, 2013,.NY Times followup article on the get together of the case nearing trial.

In the absence of a creditable trigger for this uncommon distortion of the hospital mission,

- is there any assorted conclusion than that its purpose was to extract an large quantity of coins from a vulnerable, rich, but now now no longer acutely ill former patient?

This would mean an uncommon but monumentally unethical type of hospital mismanagement.

So we've NULL contemporary tales about major, unusual, reputedly extreme mismanagement with the aid of way of hospital executives.  These tales had been reported as in the get together that they had been independent.

However, buried inside the unique NY Post article, but unmentioned in equally of the foremost NY Times articles, however, was a trace of how this case and that above of the purloined inheritance seemed to be linked.

The Hidden Hospital System

The NY Post article referred thus to the Beth Israel CEO who allegedly driven Ms Clark for contributions,

 Newman, former CEO of Continuum Health Partners, Beth Israel’s examine organization, took the uncommon step of providing to assist Clark entire a will so 'some faceless bureaucrat of the government' wouldn’t get his palms on her estate, court docket docket papers say.

Quick Watson, did you phrase that?

Continuum Health Partners was the "parent organization" of Beth Israel Hospital throughout a minimum of a pair of of the time Ms Clark was in home there.  Continuum Health Partners also was the "previous owner" of Long Island College Hospital throughout a minimum of a pair of of the time it reputedly was soreness big losses and its endowment was being depleted.  So had been equally these tales actually concerning the identical organization, the identical hospital system?

Digging a bit of little bit of further, per its own LinkedIn page,

 Continuum Health Partners, Inc. was shaped in 1997 as a partnership of three venerable institutions - Beth Israel Medical Center, St. Luke's Hospital, and Roosevelt Hospital.

So whereas the hospital device did now no longer exist while Ms Clark first entered Beth Israel Hospital, the heiress' "care" was below the manage of the commerce agency reputedly from 1997 to the day she died.

Furthermore, as famous in a 2011 Chronicle of Higher Education article, potential from Innovative Resources Group Inc,

 If there was a honeymoon after the merger of Long Island College Hospital, in Brooklyn, with Continuum Health Partners, in New York in 1998, few matter it. The bickering started early and dragged on for years, but divorce didn’t happen inevitable till the medical docs went public.

So the hospital device recognized as Continuum Health Partners took over Long Island College Hospital in 1998 and held it for thirteen years.  Furthermore, reputedly LICH was edge of Continuum Health Partners throughout the time while its losses rose and the Othmer bequest was depleted.  For example, from the CHE article,

  Several physicians told a crowd gathered lawn the hospital’s front in 2008 that Continuum had withheld coins from the 150-year-old institution, needlessly chopping affected user companies and endangering the hospital’s future.

Also in 2008, the Brooklyn Heights Blog reported this reaction to a query about payments from the Continuum Health Partners CEO, Stanley Bazenoff,

 LICH faces an prompt fiscal crisis. Unless motion is taken quickly, he said, LICH will now no longer have payments accessible to meet payrolls and assorted offer day expenses. He ascribed LICH’s area to simply several factors. First, the hospital contains a heavy debt burden-approximately $150 million in lengthy run bonds financed with the aid of way of method of the New York State Dormitory Authority and $25 million in short-term commercial paper-which result in annual debt seller (including pastime and amortization) rate of approximately $22 million. Second, LICH has an running deficit, presently about $40 million on an annual basis,...

Denis Hamill, a columnist for the New York Daily News, made this accusation in a February, 2013, editorial:

Under Continuum, the once-profitable LICH ran up $300 million in debt from natural administrative malpractice. And then Brezenoff brokered the stinky SUNY Downstate merger, with state taxpayers absorbing the $300 million debt.

So it especially appears like there will be an argument that Continuum Health Partners, below its CEO, Stanley Bazenoff, was guilty for the manipulation of pseudo-patient and effectively to do heiress Hughette Clark to safe an large donation, and the very fairly a lot simultaneous depletion of Long Island College Hospital's finances, together with an large bequest that was supposed to be untouchable.

Not surprisingly, Mr Bazenoff, defined with the aid of way of Mr Hamill as

a ruthless powerbroker ... whose nickname at LICH is Darth Vader


a quintessential member of what muckraker Jack Newfield recognized as The Permanent Government of New York 

also appears to have got effectively to do in his role as chief of Continuum Health Partners, alongside together at the same time together with his assorted best managers.   The weblog LICH Watch found these result from the system's 2009 IRS 990 report,

here are a pair of highlights, figures for Continuum employees who, hm, earned extra than a million coins for the year:

Chandra Sen, MD, $2,109,204

Stanley Brezenoff, $2,014,413

Kathryn C. Meyer, Esq. $1,049,807

John Collura, $1,307,556

Gail Donovan, $1,365,354

 A 2011 New York Post article stated,

 Stan Brezenoff, CEO of Continuum Health Partners, overseeing such hospitals as Beth Israel, St. Luke’s and Roosevelt, pulled in about $3.5 million.

 So this result in yet extra mysteries, first concerning the user instances while visible as occurring inside one big hospital system:

-  Why had been Long Island College Hospital's payments addressed as though it had been an independent entity, while it was in truth only a subsidiary of Continuum Health Partners?

-  Why was Continuum Health Partners role inside the hospital's enlarging debt and depleting endowment now no longer discussed?


-  Why was the weird clean up of Hughette Clark attributed to "Beth Israel executives," but now no longer Continuum Health Executives, while Beth Israel was also only a subsidiary of Continuum Health?

Then there will be the higher mystery,

-  Why have these NULL instances been discussed as absolutely independent, once they happen to be edge of a development of behavior with the aid of way of Continuum Health Partners management?


While we proceed to see cases, a pair of amazingly bizarre, suggesting mismanagement and unethical management of hospitals and hospital systems, there appears to be an absolutely correct loss of pastime about how they happened and what their implications may also simply properly be.  This loss of pastime is so profound that no user appears to have visible that NULL vibrant and uncommon instances getting magnificent media observe inside the identical metropolis and the identical time concerned the identical big hospital system.

Health care companies happen to develop into ever larger.  Such enlarging companies can concentrate their power, dominate their "markets," and therefore boom their gross sales and the repayment in their best employed managers.  Without any countervailing force, they push it's miles easy to inexorably toward oligopoly after which monopoly.

Furthermore, the instances of the purloined bequest and the resident heiress present that ever higher companies with ever extra complicated techniques are ever higher at hiding the accountability in their best employed managers.  We have formerly noted, e.g. a case wherein a subsidiary of GlaxoSmithKline pleaded guilty to crimes involving production of adulterated drugs, thus shielding GSK and its management from responsibility, how subsidiaries of big companies may also simply properly plead guilty to crimes, thus absolving their examine companies and its managers of any blame.

In the offer day cases, it appears that in some method an large properly being care device was capable to store clean of accountability with the aid of way of letting its edge hospitals happen to be independent.  Yet or no longer it's the higher device that was reserving the gross sales and making millionaires out of its employed managers.  This appears to present how concentration of energy into ever extra complicated companies will be used to improve the anechoic effect, making mismanagement and these in cost for it ever extra obscure.

As we've said till blue in our collective faces, if we do now no longer cling the actual leaders of properly being care in cost for his or her actions and the actions in their companies on their watches, we are in a gap to rely on continued misbehavior, and therefore continued properly being care dysfunction. 

It's correct to cease with this, a video of Jeremy Brett in A Scandal in Bohemia, from the primary season of the present as first proven on PBS.

Thank You and Good article The Adventures of the Purloined Bequest, the Resident Heiress, and the Hidden Hospital System this time, hopefully can benefit for you all. see you in other article postings.

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