French solicits donations but pays CEO big bucks
January 27, 2008
BY KAREN VELIE
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 UncoveredSLo.com 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 UncoveredSLO.com 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.