| News - Friday, March 18, 2011
Hospital donations jeopardized by CEO's ouster
Board's action raises questions about transparency at El Camino Hospital
by Nick Veronin
A month after El Camino Hospital abruptly announced that it would terminate CEO Ken Graham's contract at the end of the fiscal year, June 31, many at the hospital remain perplexed, and even vexed by the news.
Judging from the sentiments expressed by three people — a member of the El Camino Hospital Foundation's board, the head of the nurses' union at the hospital, and a Los Altos resident — there are many reasons fueling the confusion and anger that surround Graham's ouster. However, one complaint stands out: the perceived lack of transparency about the impetus behind the decision.
"I felt that it was very unprofessionally done," said Willem P. Roelandts, a board member of the El Camino Hospital Foundation, the fundraising arm of the hospital.
Roelandts said that he and other foundation board members were frustrated, angered and "dumbfounded" by the decision, which the foundation did not learn about until after it had been made public.
"The foundation board was not told ahead of time or even asked their opinion," he said — a move he felt was inconsiderate. Roelandts was frustrated further when members of the hospital board came to a foundation board meeting to explain their decision and field questions.
"They couldn't explain why," Roelandts said, noting that the closed session lasted two hours.
Donors drop out
The decision has hurt the foundation's fundraising ability, Roelandts said, adding that he and his colleagues have already received calls from donors asking if the hospital is faltering. He said he is sure the foundation will lose out on money as a result of Graham's termination.
"The way that Mr. Graham was basically fired — it really created doubts," he said. "It is very difficult to collect money when there is an impression that the hospital is in trouble."
That perception is particularly frustrating for Roelandts, who said that, in his opinion, nothing could be further from the truth. "El Camino Hospital is probably the finest hospital in the region. Mr. Graham has really done a lot of things."
Shocking statement
At the hospital board meeting on March 9, Roelandts, along with several others, publicly expressed their distaste with the decision to fire Graham.
And while most of the board, along with the CEO himself, did not publicly respond, one board member did.
Dave Reeder, who voted against firing Graham, said that he could not disclose what was discussed in closed sessions. Then he said something that shocked one Los Altos resident who had come to the meeting in the hopes of getting his questions about Graham's termination answered.
"I'm not sure I understand why we did what we did," Reeder said. "Most of us will probably never know why that decision was made. But the majority of the board decided they wanted a different CEO."
"That didn't make any sense," Gary Krikorian said, referring to Reeder's statement.
Krikorian, a retired child psychologist living in Los Altos, said he came to the meeting after reading about Graham's ouster in the local news media.
"It seemed unusual to me," he said, referring to the 3-2 decision to dismiss Graham. "That tells me there were some issues."
He said that he feels a certain ownership of the hospital, not only because he pays taxes to support its operations but also because it is likely where he or his wife will go if they fall ill. Krikorian said he was upset to see how unwilling the board had been to disclose the reasoning behind its decision.
"The hospital belongs to us," he said, paraphrasing a quote he had read from long-time hospital booster Norma Melchor. "The truth should come out."
Tight-lipped board
The tightly worded official statement announcing Graham's termination — when it did speak of Graham's tenure — spoke about it favorably. Wesley Alles, chairman of the board, focused on Graham's accomplishments in comments included in the statement. He noted that the CEO headed the organization during its re-designation as a nurse Magnet Hospital and was there for the establishment of the Center for Advanced Radiosurgery.
During his time at El Camino, Graham oversaw the construction of the new, seismically sound, state-of-the-art hospital building, as well as the acquisition and opening of the Los Gatos campus, facts not mentioned in the release.
That's not to say that Graham didn't also hit some rough patches during his time at El Camino.
Graham presided over one of the toughest financial periods El Camino has faced in more than a decade. In July 2010 the hospital began its current fiscal year in the red and in September announced that about 140 employees, including service workers, nurses, and administrators, would likely lose their jobs.
However, while some administrative positions ultimately were cut, thanks to negotiations, buy-outs and a massive shuffling of positions, no nurses or service workers were forced to leave. And although the fiscal year started bleakly, the hospital appears to be on track to turn a profit by the end of June.
It is possible that Graham's handling of the crises may have led to his ouster, according to Ron Shinkman, the publisher and editor-in-chief of Payers and Providers —a weekly publication covering healthcare business and policy news.
Shinkman said that it can be quite a juggling act to earn the favor of physicians, nurses unions, service workers unions, patients, the community and board members all at the same time. "If you aren't pleasing these constituencies, they may try to force you out."
Yet, despite calls for an explanation, the board has remained mum. In response to a request to speak to members of the foundation board about Graham's departure, hospital spokeswoman Chris Ernst wrote in an e-mail, "the employment agreement was terminated without cause. ... As with any personnel matter and as part of the mutual non-disparagement clause within the employment agreement, further discussion on this matter would be in conflict of the agreement."
Financial turn-around
Pat Briggs, president of the El Camino nurses union, said that in some ways she was surprised by the decision.
"The surprise is that the hospital has gone through quite a financial turnaround in the last few months," Briggs said. "Since the June financials, there has been a significant turnaround in financial stability."
The union leader said that she has not been surprised by the board's lack of communication with the public regarding its decision.
"The board has a huge lack of transparency," Briggs said, criticizing the board for making the majority of its decisions in closed session and holding its meetings in a way that is confusing for the public and the press.
The El Camino Hospital board made the decision to discontinue Graham's contract during a closed session portion of its Feb. 9 meeting. It announced the decision at the end of the closed session, at about 10:20 p.m.
Alles, Patricia Einarson, MD, and Uwe Kladde voted in favor of the decision; Reeder and John Zoglin were opposed.
Briggs said holding closed sessions that go late into the night, means that when the board finally reconvenes into open session, most, if not all, of the public has gone home and does not hear about any significant decisions made in private.
Roelandts would not speculate about what specifically prompted the board to dismiss Graham, but he did say that, broadly speaking, it appeared that the reasons were "political."
Whatever the case, Roelandts said he wishes the board would have given the foundation at least some warning.
"We are the people who bring in the money; at least they should treat us with a little bit more respect," he said.
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