Audio By Carbonatix
It was a medical problem for the ’90s: A rich benefactor offers a giant, cost-conscious health-care corporation $1 million to pay for a brand-new building–if the company agrees to use it to house a program that has lost money for the past twenty years. What to do?
Several former employees claim that the corporation, Columbia/HealthONE, took the cash and then tried an end run around the donor’s wishes. The company denies it, but two employees have quit and another has been fired over the dispute.
At issue was a popular daycare program at Englewood’s Swedish Medical Center for frail, elderly patients who have only minor medical problems and whose families don’t want to put them into a seniors’ home. The program had been around since the mid-1970s but, according to employees and HealthONE officials, had always lost money. Thanks to a Denver woman named Ruth Johnson, however, the daycare center looked to have a bright future.
Former employees of the Swedish Adult Day Care Center say Johnson took an interest in it several years ago when she tried to enroll her husband, who suffered from Alzheimer’s disease. He was turned down because his advanced symptoms required too much medical attention, but Ruth Johnson remained impressed by the program. Over the next couple of years, the employees say, Johnson donated a piano and a van, as well as some of her time, to the center.
And the center apparently needed the help. It cared for about three dozen seniors, the vast majority of whom paid for the service directly out of their pockets, at a rate of about $35 a day. That didn’t begin to cover its costs, says Mary Anstine, president of HealthONE, so Swedish Medical Center had to subsidize the program.
In the meantime, the medical center itself was going through some major changes. A nonprofit hospital for many years, in 1993 it merged with another nonprofit hospital, Presbyterian/St. Luke’s Health Care Systems, to form a third nonprofit company called HealthONE. Two years later, in October 1995, HealthONE formed a unique partnership with a giant for-profit health-care company, Tennessee-based Columbia HCA/ Healthcare Corp., which owned Aurora Regional Medical Center and North Suburban Medical Center in Thornton, among other facilities.
The new company, Columbia/ HealthONE, emerged from the marriage as a joint venture, an amalgam of nonprofit and for-profit institutions. The new health-care corporation, which commands one third of Denver’s hospital business, has taken the lead in local medical streamlining and cost-cutting. According to published reports, Columbia/HealthONE has eliminated 1,200 jobs and $40 million in costs since its inception just over a year ago.
Ruth Johnson died in February 1995, leaving behind a generous foundation and no close relatives. The Ruth Johnson Foundation stipulated that HealthONE would receive $900,000 for a new adult daycare center if HealthONE would kick in some matching funds. Anstine says the company did, adding $350,000 to the mix. Several thousand dollars more were raised by employees of the old Swedish Adult Day Care Center, and construction of a new building at 3444 South Emerson was started last year.
The trouble began last fall, as the new building neared completion. Several employees at the seniors’ center–Pat Day and Pat Goodman, who were activities coordinators, and Christine Hendricks, the program’s director–claim that Ruth Johnson made her bequest because of her admiration for the center and donated the money with the provision that the existing program remain in place.
HealthONE interpreted the bequest more broadly. Tired of losing money, four months ago the company’s administrators contacted another local daycare program called Total Longterm Care–TLC–to take over the senior program at Swedish. When Hendricks learned that HealthONE was planning to replace the old Swedish program, she called the Johnson Foundation’s trustee and complained.
Although both are daycare programs for the elderly, TLC and the old Swedish center have some crucial differences. Officials for both describe the two programs in medspeak–a “social” model versus a “medical” one–but the most salient difference is that the Swedish program lost money and TLC doesn’t.
TLC’s director, David Reyes, explains that part of the reason is that TLC operates like many managed-care companies, with tight cost controls. Another reason, though, is how the two programs are paid for.
Because the old Swedish program offered only social activities and minimal physical care, clients covered tuition out of their pockets, an unsteady and inadequate source of income. TLC, however, also provides medical services to its seniors–and thus is eligible for reimbursement from the government’s two insurance programs, Medicare and Medicaid. In fact, Reyes says that 95 percent of TLC’s clients are covered by one of the two insurance systems; at the Swedish program, that number was less than 10 percent.
Reyes says he has not heard whether HealthONE will replace the old Swedish adult program with TLC. “They haven’t contacted us yet,” he says. But he also says that in late October or early November, HealthONE officials asked him to submit a proposal to run the new Johnson adult daycare center. An internal TLC document obtained by Westword shows that TLC began hiring workers for the “Johnson Center for Total Longterm Care” in December.
Anstine, HealthONE’s president, insists that Ruth Johnson’s bequest came with no restrictions and that HealthONE’s efforts to find a new, self-supporting program for the adult daycare center were appropriate. Day and Goodman disagreed; both women resigned from Swedish.
Hendricks says she was fired for alerting the trustees of the Johnson Foundation that HealthONE may have been flouting the intent of Ruth Johnson’s endowment. As evidence that the trustees agreed with their position, the women say, the Johnson Foundation withheld a final payment of $300,000 to HealthONE when it learned of the company’s intentions.
Anstine describes Day, Goodman and Hendricks as “disgruntled employees” who were spreading misinformation and says that HealthONE has in fact made the decision to stick with the old Swedish program that was in place when Ruth Johnson made her bequest. (A spokeswoman for HealthONE’s public-relations firm later said the company decided that staying with the old program was preferable to an ongoing dispute with the former employees.)
Brent Johnson, an attorney for the Johnson Foundation’s trustees, declines to answer detailed questions about the disagreement but also maintains in a written statement that “the trustees and HealthONE are continuing to implement the adult daycare center in the new facility as envisioned by Ruth Johnson.” He adds, “The trustees and HealthONE believe that they share a common understanding of the intent of Ms. Johnson in making the gift to HealthONE, and they fully expect that attempt to be carried out without any problems.
