A physician and an administrator are using an outdated bylaw from the governance rules of Sandwich (Ill.) Community Hospital in a duel over control of the hospital's board.
The old law allows anyone who pays a $5 fee to join the Sandwich Community Hospital Association, which elects the 53-bed hospital's board. That bylaw enabled Vijay Marwaha, a Sandwich physician and hospital board member, to rally some 1,200 patients and community members to support a board takeover.
A vote for six new trustees on the 13-member board is scheduled for this week in Sandwich, which is located about 50 miles west of Chicago.
"The only way to make the board listen to me was to get rid of them and put some new members there so they don't have a conflict of interest," Dr. Marwaha said. He told MODERN HEALTHCARE he was upset over the current board's "back-room politics."
Among Dr. Marwaha's complaints: Some residents were improperly brought onto the hospital's medical team, medical staff physicians were offered space in an office owned by a board member, and board members have approved hospital business transactions without the knowledge of other members. He said he has not been offered any such incentives during his decade as a physician at Sandwich.
Dr. Marwaha now has three other supporters on the board, so the vote could give him control. Just a year ago, there were only 300 members in the hospital's association. Now, after the campaigns of Dr. Marwaha and the hospital's administrator, Loren Slade, there are about 2,500.
Mr. Slade said the takeover attempt is divisive and isn't supported by the Sandwich medical community. The hospital is managed by Nashville, Tenn.-based Quorum Health Group, with Mr. Slade and a chief financial officer working as Quorum employees.
The dispute landed temporarily in state circuit court in De Kalb County, when the hospital sought to delay the board vote. Judge William Jegen eventually allowed the balloting to proceed, but not before criticizing Mr. Slade, who answers to the board, for participating in the tug-of-war by collecting proxies. "Mr. Slade has exceeded the scope of his employment by doing what he has been doing," Judge Jegen said.
Dr. Marwaha said the hospital is in financial trouble, while Mr. Slade said it's on the comeback trail.
The hospital's Medicare cost reports show a bit of a comeback for the facility. Sandwich Community Hospital had net income of nearly $92,000 last year on net revenues of $9.5 million, according to HCIA, a Baltimore-based healthcare information company. In 1992, the hospital had operating losses of $149,000 but net income of $218,000 on net revenues of $8.1 million. The previous year showed net and operating losses.
An ad in a local newspaper with a petition supporting present hospital and board management was signed by more than 80 hospital employees and a dozen members of the medical staff.
Such takeover attempts are rare because hospitals realized their vulnerability and changed their governance, said Charles Ewell, president of the La Jolla, Calif.-based Governance Institute. That form of governance is known as "the association approach" and used to be common, Mr. Ewell said.