Commentary: Is the Henry Mayo Newhall Hospital board too cozy?

Lately I have been thinking about boards of directors and corporate executive pay because for the last several years it has been increasingly in the news. Corporate executives being arrested for stock option backdating or swindling of funds; boards of directors asleep at the wheel or just rubberstamping whatever the Chief Executive Officer wants, and more.
It’s interesting to see that Warren Buffet, one of the richest men in the world, gets paid by his company Berkshire Hathaway about $100,000 a year plus some perks. Or how about Steve Jobs the CEO of Apple getting a dollar a year. Obviously both men are billionaires and don’t need the money but it is an example of responsible corporate leadership.
There are plenty of other examples where corporate chiefs get a base salary and their bonuses are tied to performance. If the company does well and the owners (shareholders) are happy with the returns on their investment, then the CEO is rewarded and if the company doesn’t do well then that is reflected in the compensation too.
Good corporate boards should be made of individuals that bring some expertise or experience to the table and are active in the governance of the company. These are professionals that should not have conflicts of interest either by doing business with that company or have relatives working for the company.
That’s one of the reasons why it’s rather odd to me to see the Henry Mayo Newhall Memorial Hospital (HMNMH) board of directors appear to be so cozy. Especially with all the controversy that has surrounded the hospital over the years it would seem prudent to have a board of directors that are as independent as possible.
The HMNMH Board Chair is James Hicken, President & Chief Executive Officer of Bank of Santa Clarita and Elizabeth Hopp, Sr. Vice President/Director of Client Services for Bank of Santa Clarita, is also on the hospital Board of Directors. What’s interesting about this is that the hospital apparently has millions of dollars in the Bank of Santa Clarita. That makes me ponder if these board members are looking out for the best interests of the hospital or of the bank? If the hospital decided to put its’ money in another bank would these board members still invest their time on the hospital board?
I also wondered why several doctors that are on the HMNMH board apparently have million dollar contracts with the hospital? Wouldn’t it be better to have medical doctors or experts on the hospital Board of Directors that don’t have any monetary affiliation with the facility; doesn’t that make them more objective and impartial?
There is an awful lot of construction going on at the hospital campus with more to come over the next few years and one of the owners of a construction company that appears to have a multi-million dollar contract with the hospital is on the board of directors. I would think having a construction expert on your board during a major facilities expansion and upgrade is a great idea but it would seem more sensible to have an independent expert, one with no business connection, on the board to add to the checks and balances of overseeing the construction work at the hospital. Wouldn’t that seem better?
The other thing that I thought was peculiar is that Roger Seaver the President/CEO of Henry Mayo Newhall Memorial Hospital getting a total compensation package of $631,540.00. Gee, that’s more than six times what Warren Buffett makes and more than 50% higher then the $400,000 that President Obama makes. It might be better to have a more performance based compensation structure in place, one that rewards for significant improvements in health care to patients.
Now let’s face it, the hospital can pay what it wants and have whomever it wants on its board of directors. But it does raise eyebrows when you do see some of the activity described above going on and continually hear about quality of care issues. Those quality issues have been around for a long time and it may mean that the hospital facility has to go above and beyond to shake that negative stigma. Even starting at the board level with having more transparency and less perceived conflicts.
I discussed it with a few folks and one of them said to me; “That’s just how they do things in the Santa Clarita Valley; there is a lot of back slapping going on, that’s just the way it is.” But that doesn’t make it right or appropriate, does it?
It’s not hard to get the impression from some of this information that quite possibly there may be more interest in business and “back slapping” then in the administering of quality health care. That is certainly the view of some local doctors and former hospital patients.
Dave Bossert- Commentary
Dave Bossert is a community volunteer who serves on a number of boards and councils. His commentaries represent his own opinions and not necessarily the views of any organization he may be affiliated with or those of the West Ranch Beacon.

From “OUR” Hospital to “THEIR” Hospital

Your loved one is ill and has been hospitalized for several days. Typically, the physician decides on a treatment plan and when they can return home. Would it bother you if the hospital CEO made these decisions based on bottomline finances instead of educated and reliable medical reasoning? This scenario is occurring across the country, and presently entangles our Henry Mayo Hospital.

Let’s face it, big business has taken over Wall Street and the banks, and little business and people like us have been hurt. A decade ago, plans were launched to take over hospitals...why?...because that’s where the money is! According to an article in one of our medical journals, the hospital industry is “out to decimate the independence of medical staffs and take away physicians’ rights. Their objective is clear: they want to place unfettered power and economic control over doctors in the hands of hospital administrators.”

Admittedly, doctors are not good business people, and they tend to have quirks of arrogance and self-righteousness that continually divide them. Taking advantage of these faults, big business swooped in and used physician medical licenses to make big profits. Yes, we’ve heard of some mismanaged hospitals going bankrupt, but most are now doing exceptionally well. Certainly, it would be generous if these hospital business people were interested in streamlining the system, saving money, and improving healthcare. But the massive profits are instead deceitfully funneled into huge administrative salaries, bonuses, pensions, and golden parachutes. Sound familiar?

A game plan by well-financed hospital business associations have lobbied many states to allow hospitals to “corporately practice medicine.” California does not. Because of this, there is an attempt to circumvent State law, which ultimately will be tested in California courts. Prime example is The City of Hope Medical Staff trying to thwart efforts by the hospital to use the position of Chief Medical Officer (CMO) and a foundation to hire outside physicians. (Please refer to my October 12, 2010, commentary on this blog surrounding the controversial appointment of a CMO at Henry Mayo. Are they “setting the table”?)

These physicians are paid and under the authority of the hospital, who therefore dictates the degree and extent of care hospitalized patients receive. I’d love to cry “What about the Hippocratic Oath?!” these physicians have taken. Doctors are intelligent, and a rare breed, but sadly some are not so principled to bite the hand that feeds them.

As I’ve discussed previously in the West Ranch Beacon, Henry Mayo Hospital is governed by three entities: Medical Executive Committee (MEC), Administration, and Board of Directors. The MEC is elected by the physicians of the Medical Staff and follows By-Laws, and Rules & Regulations in maintaining State-law protected self-governance, which separates authority between doctors and the Administration. This is why physicians currently make all decisions about care of our hospitalized patients.

What if though the MEC is “majorilized” by physicians who vote to change the By-Laws, and Rules & Regulations in favor of the hospital Administration? Will patient control and decision making then be in the hands of the Administration? Of course. There are some physicians paid by Henry Mayo Hospital because they have contracts and directorships, and we have seen them financially coerced into speaking for the hospital (City Council Hospital Master Plan meetings). I wonder how they will vote if they are a member of the MEC? Conversely, physicians presently on the MEC who have attempted to maintain autonomy and self-governance have been bullied, degraded, defamed, and threatened by the Administration.

One truly needs to ask a critical question: Where is Henry Mayo’s Board of Directors in all of this? Unfortunately, they have already laid their cards on the table by passing multiple “Resolutions” condemning the MEC efforts to protect themselves. One can only look at the role the Administration plays in this influence and wonder when the public will ask for a conflict of interest investigation of certain Board members.

There is an attempt to make the MEC and Medical Staff at Henry Mayo Hospital be the “bad guys” as this has been propagated and propagandized to the Board of Directors, Foundation, hospital medical personnel, and even to the Medical Staff. As an involved Medical Staff member and not on the MEC, my view of these problems are clear and precise: the problem does not lie with the MEC nor Medical Staff; this bullying and hostility comes directly from the Administration, in conjunction with their plan to take over all financial control and influence of our hospital.

In life, we have only a few intimate relationships: with our spouse, our clergyperson, and our physician. Once thought to be sacred ground, the relationship with our doctor is in jeopardy and threatened. Preservation of this sacrosanct relationship is critical, and from this my hope is “our” hospital will never be called “their” hospital.

Gene Dorio, M.D.

Gene Dorio, M.D., is a local physician. His commentary represents his own opinions and not necessarily the views of any organization he may be affiliated with or those of the West Ranch Beacon.