French solicits donations but pays CEO big bucks

January 27, 2008


Posted 1/27/2008

Employees at nonprofit French Hospital Medical Center are reportedly encouraged to seek private donors for needed equipment purchases while the facility’s chief operating officer pulls down nearly a million dollars in salary and benefits — and probably continues to hold down a second fulltime job.

At the same time, according to employees of the San Luis Obispo hospital, administrators have enacted a policy of shuffling off uninsured patients to hospitals operating on a for-profit basis without at least a cursory look from medical personnel.

In 2005, Alan Iftiniuk, French’s CEO, was paid $835,231 in total compensation plus $136,671 to cover his expenses, according to Catholic Healthcare West’s (CHW) financials, French’s parent company. Additionally, CHW lent Iftiniuk funds to help him buy a house. Those are the most recent available public figures for Iftiniuk’s compensation.

“CHW must think he is worth it,” said Megan Maloney, communication director at French Hospital. “He is paid through Catholic Healthcare West.”

Iftiniuk and the communications department at CHW have not yet responded to requests by for comment.

Recent congressional hearings have focused on financial practices of nonprofit hospitals. An ensuing firestorm of controversy swirls around not only the bloated salaries and extensive perquisites paid to executives, but also the question of whether these tax-exempt facilities are adhering to the obligation of serving the public.

“At French, we are having trouble buying new equipment for a lack of money. We are told we need to get donors in the community to provide the funding,” said one hospital employee who asked to remain anonymous in order to protect her livelihood.

“If we are so poor, why is it that Alan Iftiniuk makes $975,000 per year? CHW gave him a [housing] loan… then forgave the loan.”

Maloney simply said the loan was old, and did not discuss details.

Further roiling the French waters is Iftiniuk’s full-time effort for the Spinemark Corporation, a San Diego-based joint venture currently trying to establish spinal disorder treatment centers in major U.S. and international markets.

On November 5, 2007, Iftiniuk was promoted to chief interim operating officer at Spinemark, according to Spinemark’s website.

According to Maloney, Iftiniuk is on the board of directors at Spinemark and is not an employee. Maloney said Iftiniuk was just filling in at Spinemark, utilizing vacation time in December while the company searched for a new CEO.

Nevertheless, a receptionist at Spinemark told last week that Iftiniuk was still employed full time at Spinemark.

Emergency room controversy

The French employee contends that the number of uninsured patients requesting and receiving care has declined under the direction of CHW.

“We do not have docs on paid call,” the employee said. “So when an emergency comes in that needs a specialist, we call the specialist and if the patient does not have insurance, they decline to come in. Then we have to transfer the patient to one of the two for profit hospitals as they guarantee that a specialist will come in regardless of patients’ ability to pay. And of course, we also are exempt from taxes as a nonprofit.”

She characterized the practice as “a scam.”

California hospital care statistics support the employee’s claim. In 2002 and 2003, prior to Catholic Healthcare West acquiring French Hospital in 2004, not a single patient who registered at French Hospital’s emergency room left without being seen by a health care provider, according to the California Office of Statewide Health Planning and Development’s Annual Utilization Report of Hospitals (ALIRTS).

However, by 2005, following the 2004 change in ownership to a nonprofit with a “mission of healing,” those numbers climbed. In 2005, 53 would be patients left without being examined and in 2006, 65 registered patients left the hospital without a medical evaluation, according to ALIRTS.

Hospital spokesperson Maloney refutes the allegations.

“Those are patients that decided to leave on their own for whatever reason,” Maloney contended. “CHW reports correctly. Perhaps Vista Hospital Systems (the hospitals prior owners) reported incorrectly. It is our mission to care for the indigent. It is ridiculous.”

In addition, state records show a sharp decline in emergency room services under the direction of Iftiniuk. In 2002, anesthesiology, laboratory, operating room, pharmaceutical, physician, and radiology services were available on site 24 hours a day, according to ALIRTS.

Under the leadership of Iftiniuk, the availability of services waned, according to ALIRTS. In 2006, the only services available 24 hours a day on site were physician and laboratory services. The missing services were transferred to an on-call basis.

Maloney claims the same services are available today that were available in 2002.

“There have never been any changes,” Maloney added. “It is completely the same, the only thing that has changed is the way we report it. I can assure you that patient care is at a higher quality than ever.”

The federal government takes a look

Nonprofit hospitals have come under government scrutiny for charging uninsured patients higher prices then those with coverage, paying executives questionable salaries, and providing loans to officers and doctors. Congress is examining the requirements to claim nonprofit status; and the IRS is requiring nonprofits cough up more information, including a list of all employees who are paid more than $100,000 per year, on their 2008 IRS Form 990.

Laws prohibit running a nonprofit to advantage an individual. Tax laws passed in the 1990s give the IRS the authority to require excessively-compensated executives repay a portion of their income, along with a 25 percent penalty.

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By: Anonymous on 1/28/08

Karen – there is not one named source that can substantiate any of your claims – only disgruntled employees and patients who didn’t like the way they were treated – both of which are very common in ER departments across the country. Also, not one balanced quote from someone who was uninsured and then received treatment.

How can hospitals not be treating the uninsured and then get in trouble for charging them too much? You can’t have it both ways.

As a patient of French – the quality of care I have received has been excellent and no one cared what my insurance card said.

I expected balanced and objective reporting from this website – and this smells of a hit job.

By: Anonymous on 1/28/08

The problem with the premise here is that at both French and affiliated Arroyo Grande Community Hospital they do not even ask for insurance or any other personal/financial information in the ER until well after treatment is underway, or in one of my visits right before I left.

I was seen first, tested and treated, and while waiting for CT scan results then I was asked for my insurance card, etc.

Curiously this article does not have any comment from a patient who was supposedly turned away. Produce one and documentation that the patient was sent to another hospital and treated there and this might be believable.

This article reeks more of class warfare and anti-business opinion based on a failure to understand the role of leaders or producers in an economy and the risks that come with such positions.

By: Anonymous on 1/27/08

This web site has quoted very reputable fact finding sources. The information is there for anyone to gather for themselves. The only thing that we don’t know is who might have complained to this jounalist to begin with. I only care about if it’s true or not. It appears true according to the referenced reports.

By: Anonymous on 1/27/08

I love when people assume when something is written on a website at it is 100% true and then base further dealings with the alledgedoffender based on this supposed facts. I for one want a true investigation of this matter before I start slamming the hospital or the empolyees.

By: Anonymous on 1/27/08

People don’t come into our ER and then just decide to leave. We have a very short waiting list. People are turned away without treatment because they have no insurance. It’s a “scam” and it works by telling the uninsured that there is no medical personnel available at the time to treat them. It happends every week. In the mean time Alan has been forgiven for an excess of 300K for a property loan, he has a salary of near 7 digits and a 6 digit expense report. and….he is asking for contributions!

By: Anonymous on 1/27/08

I never should have given all that money to French. Sounds like it went to pay Alan’s salary.

By: Anonymous on 1/27/08

Humm – This is pretty bad. I hope people stop donating to French hospital and have it’s Director purchase the new equipment. Thanks for letting us all know. My aunt donates to non profits like French Hospital.

Member Opinions:

By: Anonymous on 2/4/08

@slo rn:

You clearly have no understanding of how our medical system works. We are not allowed to ask patients for insurance information until they are seen. We are also not allowed to transfer patients for insurance reasons. It is illegal and we simply don’t do it. The only exception is Kaiser because they prefer to keep things in their system. They ask us to transfer them only if the patient is stable and the patient agrees.

Transfers for specialists does happen, but that is because of local specialists’ call arrangements with each hospital: the neurosurgeons only work at Sierra. ENT and optho primarily take call at French, and the cardiologists prefer the French cath lab. Aside from these specialties, all of the hospitals have pretty much the same resources. We accept transfers routinely from AG, Sierra and Twin for the subspecialties that we have that they don’t. It’s our job to stabilize the patient in the ER and get them to the place where they will receive the best care for their problem. Sometimes thats to Sierra for neurosurgery, sometimes it’s to Stanford, Fresno, or UCLA for a higher level of care that nobody in the county can reasonably provide.

Also, If you think back to your stats classes, you’ll remember to look at the numbers in context, ie: Sierra has a larger facility and sees significantly more patients overall, therefore they will naturally see a larger percentage of any given patient population. I’d also be willing to bet that a significant amount of head trauma that requires neurosurgical care is from our local indigent population, which have to be transferred to Sierra.

There is no scam and CHW has no control over how we the staff manage any particular patient. It is up to us to find the best and most appropriate care for each patient, regardless of insurance.

By: Anonymous on 2/4/08

It was never said that patients were not seen in the ER by a Doctor.

The scam is that once seen by an ER doc when a specialist is needed for the treatment before being admitted as a patient to the Hospital the patient is transfered to another hospital thus saving French the really big expenses of taking care of very sick patients.

The advice is unless it is something very minor go to Siera Vista as you will be garented being seen regardless of you ability to pay.

Any of you ER docs at French want to look at the statistics on transfers from the ER.

The 2 CHW NOT FOR PROFIT hospital provide only 27% of the care for the uninsured compared to 73% for the for-profit hospitals.

By: Anonymous on 2/2/08

Dear Ms. Velie,

Shame on you. It is clear from your blog post that you have grasped for material without truly knowing the accuracy of your sources. As other posters have clarified both on your blog and Dave Conglaton’s blog, patients’ insurance status is never, ever evaluated before their care is underway. It’s an EMTALA violation to refuse care. We see and treat every person, even the “patient” who checks in because she needs alcohol wipes to swab a pimple (true story). As you should know, “statistics” can often be distorted to represent whatever the writer wishes to convey. “Left without being seen” means a patient made the choice not to sit in the waiting room until a bed was available. People are brought back according to the level of severity of their presenting concerns, and occasionally, patients, with and without insurance, decide they do not want to wait. Interestingly, French Hospital Emergency Department staff strive to get patients evaluated by a physician in a remarkably quick amount of time (usually in less than half of an hour); that’s an amazing accomplishment that we’re proud of.

It’s understandable that your French employee wants to be anonymous to vent. It’s unfortunate that whomever this person is has a poor understanding of what actually happens in an emergency department with patient’s whose post-emergency department care cannot be provided at French or other hospitals. Patients are always evaluated, stabilized, then admitted or transferred based on their best interests. Seriously burned patients go to Fresno Burn Center, most neurology cases go to Sierra Vista, Arroyo Grande and Twin Cities transfer emergency cardiac catheterization-needing patients to French… These emergency transfers take place based on medical need, not insurance. Only the major academic institutions can provide all services for all issues.

It’s too bad you chose again to weakly question French’s care. You probably have no idea what an insult your words were to me and my coworkers: we work arduous, long, and selfless hours, placing ourselves in situations most of the public would rather avoid.

Your piece was another sensational blog, much like the narcotic hazed rant of unhappy Glen Beck. I wish you both could walk in my shoes. My job is difficult, intense, and exhausting, but I end my shift knowing that because of my compassion, intelligence, kindness, and integrity, I helped our community.

“It’s not the critic who counts, not the one who points out how the strong man stumbled or how the doer of deeds might have done them better. The credit belongs to the man who is actually in the arena; whose face is marred with the sweat and dust and blood; who strives valiantly; who errs and comes up short again and again; who knows the great enthusiasms, the great devotions and spends himself in a worthy cause and who, at best knows the triumph of high achievement and who at worst, if he fails, at least fails while daring greatly so that his place shall never be with those cold and timid souls who know neither victory or defeat.”

(Theodore Roosevelt 26th US President and Nobel Peace Prize recipient)

By: Anonymous on 2/2/08

The more I read about this and Dave Conglaton’s interview, the more I wonder how you people do so little research and casually spew data without context or fact checking.

For one thing, Karen’s New Times article last year was misreported in that the patient that had died wasn’t even at French hospital, he had been discharged from another hospital and went right back to drinking. How is that any hospital’s fault? We get social services involved, detox people, find hotels for people, and set them up for success, but most of the time they crawl right back in the bottle. We can only do so much, the rest is up to the individual. To make it worse, I was told that Karen had been informed that the information was wrong prior to printing and she chose to keep the misinformation in the article.

Also, French has and has always had anesthesiology, operating room, pharmaceutical (pharmacologist), and radiology services on call 24 hours a day and actually has more subspecialty call than it did a few years ago before Alan started. Overnight, the ER doc, nursing staff, and laboratory staff are in house, with radiology until 1am then on call. This has not changed in the least, but the method of reporting these statistics has, which has likely led to this confusion. This is exacerbated when it is not the subject of reliable journalism.

The “left without being seen” (LWBS) stat is interesting as well, these are people that have checked in to be evaluated but have chosen to leave for whatever reason. Sometimes it’s because of a somewhat long wait for a minor issue, some are simply impatient, some actually learn what doc is working and who will or won’t give them the drugs that they want. There’s no way that a LWBS tally of zero is accurate, people leave without being seen from every ER around the country. Either it was falsely reported in 2002/03 as zero or there was a glitch/change in reporting at that time.

Please get more information before slandering our hospital and our care. You wouldn’t believe what we go through and the kinds of things we have to put up with on a daily basis in order to do our best to give medical care to everyone that comes in. Most people couldn’t stomach it – but we are there, day after day, getting cursed at, swung at, vomited on, bled on, and even occasionally thanked, so that when you or your loved one is sick and need help, we can take care of you compassionately and thoroughly.

By: Anonymous on 1/31/08

As an ER doc, we’re on the front lines of our faltering healthcare system, trying to do everything we can to do right by our patients. We DO NOT turn anyone away from the ER. EVER. Regardless of your insurance, previous payment status, medical problem, race, creed, or anything else. We are actually required by law to see everyone that presents to us and are not allowed to even ask for insurance info until the physician has seen the patient (we actually end up “giving away” a significant amount of money every year in free care). Agreed, there are issues with subspecialists at times, but generally it is because of a shortage of specialists willing to take call, or political issues with specialists wanting to be paid to be on call when we can’t afford it. Everyone still gets the best emergency care we can give, whether you can pay or not.

As far as Alan’s salary, I personally don’t think anyone should be paid a million dollars for anything, but acutally, his salary is comparable to other hospitals’ CEOs. Unfortunately these days, most non-profit CEOs make ridiculous amounts of money, but they also earn it back for the corporation through their business practice.

I could go on pointing out flaws in this article, but basically it is unfair to accuse the entire hospital of fraud and poor patient care using a few hand-picked pieces of data and one disgruntled employees opinion who clearly has no insight into how our system actually works.

By: Anonymous on 1/30/08

Dad! At long last! Boy do you owe back child support.

By: Anonymous on 1/29/08

Hey Ima Doofus:

Cunning Linguist IS my real name. Just ask your mother.

By: Anonymous on 1/29/08

French Hospital receives tax exempt status and pays no property taxes. All one has to do is go to the publicly reported data on the OSHPD web site to see both CHW hospitals don’t deliver the same amount in chartiable care as they receive in tax benefits. Yet, they hold themselves out as the altruistic non-profits. It makes one wonder if Messers Rossi, Copeland and Forbes would donate large amounts of money to a hospital that isn’t providing its fair share.

By: Anonymous on 1/29/08

Cunning Linguist is correct. We should take this story as seriously as his name

By: Anonymous on 1/29/08

Everyone should back off and leave Karen alone. You should be grateful that her and Blackburn and Congelton are at least raising these issues for people to discuss. The Fibune throws valentines to French Hospital and all you can do is whine that this story uses anonymous sources. Hello?!?! Should we not be paying attention to what these disgruntled employees are trying to tell us? Where else can they go to get their voices heard other than a web site like this? How long has this site been up? Two weeks? It’s still evolving and finding its voice but I appreciate what they’e trying to do and they’ve accomplished more in a short amount of time than New Times, Fibune and Kisby combined.

By: Anonymous on 1/28/08

Karen is telling us where she is compiling her data. (ALIRTS) California Office of State Health & Development. The report she accessed to determine differentials regarding patient’s who left without treatment is the Annual Utilization Report of Hospitals. (Its right here in the article) Also the CEO’s salary and expenses are public documents. I might add that the Arroyo Grande center has no patients leaving without treatment according to ALIRTS! I like French Hospital. They are always curtious and quick to process patients and meet thier needs. This article is about rediculous salaries that are 60% higher than the average CEO working “for profit” hospitals. This article is about loans for homes and absorbatant expense accounts and working full time for other corporations and asking for donations in the name of “non profit”.

By: Anonymous on 1/28/08

My point is not that French hospital is good or bad. Prove to me they are doing this. I can say Karen Velie is a bad mom but I should have to give evidence. I know nothing about French Hospital but I would not slam them without better proof. If the people who are her sources came forward that would hold much weight.

By: Anonymous on 1/28/08

It’s Mee Memorial all over again. Their CEO pulled in a quarter million while running the place into the ground. Karen needs to dig deep into them also.

By: Anonymous on 1/28/08

It’s funny that the other “for profit hospitals” have alomost 0 ER patients released without care. But Marcus wants us to believe that the 65 patients that went untreated at French Hospital decided that they didn’t want any treatment. I guess they went to Sierra Vista instead where the wait was 5 hours long as compared to French who pride themselves on taking patients immediately.

By: Anonymous on 1/28/08

I remember that story in the NT. It was about a homeless man that had been released (via a complementary taxi ride)from French Hospital following a surgery. He had no where to go and needed post care. He was found DEAD in a field in SLO still wearing his French Hospital braclet with his little bag containing his French Hospital tooth brush and various amenties!

By: Anonymous on 1/28/08

Karen did a similar hit piece for the New Times a year or two back. She reported a homeless guy was refused treatment. When it turned out the guy had never been to French (and French Hospital had told her so) she still left it in the story. Karen is a well meaning reporter. She just is a bit loose with the facts. Facts usually get in the way of a good story.