Around Town: WellStar Wrangling - Power struggle moves from backstage to front page
by Otis Brumby, Bill Kinney, Joe Kirby
Around Town Columnists
March 29, 2011 03:00 AM | 8650 views | 15 15 comments | 33 33 recommendations | email to a friend | print
DETAILS ARE FINALLY STARTING TO EMERGE from the backstage power struggle at WellStar Health System and one thing is clear: the four recent firings of key execs are going to be big-time expensive due to the payments of nearly $5 million to those ousted.

The mysterious wave of abrupt departures began when the WellStar board shocked the community by cutting ties with system CEO and cardiologist Dr. Greg Simone in September. WellStar executive VP and general counsel Bonnie Wilson was fired at the same time, with no public explanation as to why. Simone got $2.76 million in severance pay from the board and Ms. Wilson $856,000. Both Simone and Wilson (who drew up her own contract) got two years' severance.

WellStar Board of Trustees Chairman Randall Bentley's sole comment at the time was that "it was time for a change."

The news of the second round of purges came early last week via an intermediary for the two fired execs but was not disclosed until after questions by the MDJ. The intermediary for Dr. Richard Lopes, senior VP and president of the WellStar Medical Group, which runs the system's 350-doctors-strong physicians network; and senior VP and chief information officer Ron Strachan confirmed they had parted ways with the system, we were told.

WellStar spokesman Keith Bowermaster issued a terse, 62-word email announcing the "resignations," adding that it would be "the only statement to be provided" by WellStar and Bentley. Bentley then declined to offer an explanation or return the MDJ's phone calls.

High-ranking execs don't typically voluntarily resign from well-compensated jobs in pairs. This isn't Noah filling the Ark two-by-two.

As it turns out, Lopes and Strachan were fired without warning or prior notice March 21 at the direction of interim CEO Jim Budzinski, then "escorted" out of WellStar's headquarters on Sandy Plains Road and told not to return. But because they were fired without "cause," WellStar must pay them an aggregate $1.053 million in severance, based on Lopes' salary of $562,660 and Strachan's $288,766. Dr. Lopes started working at WellStar in April 2010 and Strachan is a three-year employee. Both execs' employment contracts included 90-day notice periods and a year's severance pay if they are fired without cause, say their attorney, Ben Mathis of Marietta, who also represented Dr. Simone.

Suspicion is strong that Lopes and Strachan were about to blow the whistle on their "concerns" about Budzinski to the board, but that he beat them to the punch. But it's highly unlikely an interim CEO would take such a drastic step without the foreknowledge and approval of higher-ups.

Mathis confirmed to AT that Lopes and Strachan had contacted him several days prior to their firings and were preparing to contact trustees about their concerns, and that word of their plans apparently leaked out, prompting their abrupt terminations.

On the other hand, some speculate that Lopes' and Strachan's whistle-blowing was meant to derail Budzinski, the chief financial officer, who is thought to have the inside track to be named permanent CEO and seems to have the backing of Bentley. Others, including Simone, say the top WellStar job should go to a physician, not a numbers-cruncher.

NOW THAT THE FIRINGS and the power struggle have moved from backstage to the front page, Bentley on Monday called a special meeting of the WellStar Trustees for tonight to discuss the firings in executive session. The board by law would have to vote to go into private session, and then reconvene to take any formal votes. But there's no law that says personnel matters have to be discussed in private session. In fact in a case like this, with millions of dollars and the leadership of one of the county's biggest public employers at stake, good arguments can be made that the discussion should be in public.

And as one supporter of the fired execs put it, "I think Randall is a week late calling a board meeting. This should have all been hashed out at a board meeting and not by an interim CEO (like Budzinski)."

Bentley supporters, meanwhile, say he is not a supporter of the WellStar status quo but instead is trying to work behind the scenes for needed changes at the $1.5 billion health-care system.

Several WellStar watchers not involved in the controversy tell AT that regardless of the outcome, the WellStar board needs to clamp down on the overly generous severance payments it has been handing out.

"These are not market rates," one fellow WellStar exec observed.

SOME QUESTIONS: Will the hospital board tonight delve into fired execs' complaints? Or will it try to sweep everything under the rug? And does it plan to keep the community in the dark about what is happening at our biggest and most acclaimed hospital?

***


WELLSTAR cancelled the Monday groundbreaking ceremony for its new $12 million inpatient hospice facility because of rainy conditions. The four-acre tract is located at 475 Dickson Ave., off of Kennesaw Avenue near WellStar Kennestone Hospital. The facility will be adjacent to Kennesaw Mountain National Battlefield Park and behind Signature Health Care.

The new hospice will be built by support from the community and the WellStar Foundation, headed by President Tracy Atwater. It will include 18 private rooms, each with a screened porch, and a mountain deck will overlook heavily-wooded grounds. The architecture is craftsman style, resembling a mountain lodge. The project is close to being funded, with a shortfall of $186,000, said WellStar official Katie Lopez, adding work on site preparation is still under way and construction should begin in the next few weeks. The new hospice is projected to open in spring 2012.

WellStar Community Hospice is one of Georgia's oldest hospital-based hospices. Organized at WellStar Kennestone Hospital in 1981, the program offers care in a patient's residence, whether in a private home, assisted living facility, or nursing home, along with inpatient care at Tranquility - an 18-bed facility located near WellStar Cobb Hospital in Austell. Built in 1998, Tranquility was the first such facility in northwest Georgia. Hospice focuses on the provision of comfort care for those living with a life-limiting illness.

IF, AS EXPECTED, the Cobb Board of Commissioners chooses to cut the budget rather than raise taxes, much of the blade is expected to aim at public safety and the court system, which got off fairly easy in earlier rounds of cuts.

The commissioners got some specifics on what that might mean late last week from Fire Chief Sam Heaton, who drew up three proposals for meeting the $6.5 million shortfall in the Fire Fund.

“Options 1 and 2 will likely reduce our ISO (Insurance Services Office) rating from 3 to 4 or possibly 5, which in turn could cause an increase in homeowner’s insurance rate from $20 to several hundred dollars per year,” he wrote. “Insurance rates vary depending on several things including but not limited to: Credit rating, Previous claims history of that and your neighbors, area, zip code, census tract, type of structure, risk, value (not assessed value, but actual value), contents, etc.”

Option 1 would end the use of Advanced Life Support systems, shut down eight rescue units, one ladder truck and eliminate 82 positions from the 650-person department.

Option 2 would shut down four ladder trucks, close Station 27 on Veterans Memorial Highway, and eliminate 75 positions and 33 unfunded positions.

The consequences of either of those two options would include longer response times (of up to 10 minutes), less reliability (due to fewer units), increased danger to firefighters and the public due to staffing issues, increased property damage due to lack of response capabilities, “extremely long responses” during storms, higher maintenance costs per vehicle, shorter life expectancy for vehicles and the loss of newer employees.

Option 3 is raising the tax rate by 0.6 mills (which would cost the owner of a house valued at $200,000 an estimated $48 per year.

Concludes Heaton, “It is our estimate that the homeowner will be paying additional monies per year for homeowner’s insurance and getting less services versus paying additional monies per year for property taxes and keeping the same services.”

LEADERSHIP COBB 2011 will hold a concert and silent auction from 6:30-11 p.m. April 8 to benefit The Center for Children & Young Adults Inc. in Marietta. The event will feature The Fabulous Classics and take place at the Earl Smith Strand Theatre. Cost is $25 per person. ... Former state Rep. Rob Teilhet (D-Smyrna) is the new executive director of Georgia Conservation Voters, a statewide nonpartisan organization committed to turning environmental values into Georgia priorities.

SYNDICATED columnist Jackie Gingrich Cushman, daughter of the former House speaker, will be the main speaker at the April 5 meeting of the Cobb Young Republicans, reports Chairwoman Katelyn Ledford. The meeting will be at 6:30 p.m. at Simpatico. Scott Johnson, immediate past chairman of the Cobb Republican Party, has endorsed Marietta’s Tricia Pridemore in the contest for state party chair. She’s trying to unseat incumbent Sue Everhart of east Cobb.
Comments
(15)
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annonymous_1
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April 01, 2011
You know all of these executives will one day go away when this story dies down....the ones who suffer will be those 12,000 employees that are left behind and the patients they care for... think about it. It's just a power struggle because those that were in power no longer have it.
Former WellStar EE
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April 01, 2011
i agree with Concerned. until you get away from WS you don't realize how toxic the environment is
Concerned person
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April 01, 2011
Being a former WellStar employee, I can tell you that it is a hostile environment to work in. It made me sick to work there for the small salary I recieved. My healthy was not worth it.

cobb citizen
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March 29, 2011
I will never again receive care at another Wellstar facility.It is a sleazy organization.The majority of my neighbors go to either Piedmont or Northside, and they have always claimed that Wellstar is the minor leagues,junior varsity, and not ready for prime time .Wellstar is not only an amateur act but apparently led by a greedy,deceitful,feckless group of substandard hacks
wellstar employee
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March 29, 2011
Any employee of Wellstar who donates one cent to wellstar should have their head examined unless a full explanation as to the details of the large,obscene severence financial packages are disclosed in detail!
CONCERNED CITIZEN
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March 29, 2011
Will someone with some integrity, and interest in perserving the reputation of our public community hospitals demand that the coverup,fraud, and malfeasance at Wellstar be disclosed openly so that all local taxpayers who support these facilities can be confident that we are not being hosed.
wellstar employee
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March 29, 2011
Wellstar is so corrupt and so unaccountable that their management contract of the four county, tax payer subsidized hospitals should be dissolved.Why are the citizens, and moreover the local politicians not demanding full disclosure regarding recent firings of high ranking officials? Who owns Cobb, Kennestone, Paulding,and Douglas hospitals?
long timer
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March 29, 2011
after many years of service at WellStar ...needed to share something amazing that happened recently in town halls this week and in leadership conferences...you all are bad mouthing Jim ..but he introduced a new compassion driven focus to the system...yes this means he introduced what I see to be a "God style" vision and being a servant to our patients..this is wonderful! I mean to have Christian style care given to the patient and making staff accountable to ensure they are treating everyone entering our hospitals the way we would treat our moms and family is too wonderful...just be still and wait..sit back and watch the care given to everyone turn around... being compassion driven from the top of the leadership all the way down to even the environmental service employee!!!
robbieh
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March 29, 2011
i thought cobb fire department receives an independent, dedicated, percentage of property taxes- why wasn't the predictable drop in revenue planned for? ??

anyone who didn't see the housing value boom as temporary wasn't looking.
Payer
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March 29, 2011
In regards to budget cuts for fire & police protection-If these are the only options, I had rather pay $48 more per yr in taxes than to pay more in home insurance AND jeopardize the safety of my family and home.

There could be an option of cutting one person per fire station & a few police per precinct, along with a lower increase in property taxes.

Cut the police person who sits on the side of the road, getting people doing 11 mph over the speed limit. But then that would cut revenues and we can't do that either!
KennestoneConcerned
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March 29, 2011
Around town is right in saying that WellStar chairman, Randall Bentley, is working behind the scenes.... but not to improve WellStar. He is working to make himself look good and to avoid further embarrassment as the chairman who will be known for poor leadership and allowing WellStar to sink to low regard in the community. What are his qualifications to run the board of a $1.5 Billion dollar health system??????
anonymous
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March 29, 2011
It is disappointing that the public safety folks' first line when confronted with trying to reduce costs is to start shutting down services in bulk and warn about safety and increased insurance costs...the standard line for the government employee crowd.

The best approach might be to can this Heaton guy and put a real manager (this won't come from the public sector)in charge and then see what costs can be saved without shutting down the fire department.

Heaton should be embarrassed.
rjsnh
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March 29, 2011
Chief Heaton is not MANAGING the fire department IF those are the only options he sees. I say privatize the fire department and contract the service out bring in a professional to run it are tell him to do his job, not play Chicken Little just to protect his bloated budget.
West Cobb
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March 29, 2011
Kind of funny Mr. Scott Johnson could find the time to endorse a candidate for the state chair, whereas, it is widely known he never had time to take care of county GOP concerns or issues.

Mike R
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March 29, 2011
Next time i go the hospital on ER, i won't pay the bills, because they seemed to be handing out money like there's no tomorrow. We the community are upset...this hospital so called "not-for-profit"...is no longer "Not-for-profit"...LOTS of inbvestigation need to be done...greedy people should be fired...we need new people..especially doctors thathave worked for so many years...not outsiders.
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