Jerry Gillman, president and chief executive officer of Thompson Memorial Medical Center, has invested more than just his time in his job.
As majority owner of the for-profit hospital in Burbank, Calif., Gillman said he has personally staked "millions of dollars" on the success of the 105-bed facility, nestled among tree-lined residential streets in Burbank, just north of Los Angeles.
And, after Gillman was forced to lay off 300 of his 350 employees and shut down Thompson's emergency room and other services last month, it was apparent that he has also invested a great deal of emotion in the hospital.
On the verge of tears during a recent interview, the 57-year-old Gillman blamed disgruntled employees and physicians, union organizers and vindictive Los Angeles County health inspectors for the April 1 loss of the hospital's Medicare and Medicaid certification.
"These people remind me of terrorists. They would knock an airplane out of the sky and kill 300 passengers just to take me out," Gillman said.
Because 80% of its annual operating revenues were generated by treating Medicare and Medicaid patients, the hospital subsequently transferred most of its inpatients to other facilities and shut down the bulk of its ancillary services.
Gillman, whose 30-year career includes working as a hospital administrator in Ohio, New Hampshire and California, bought a large share in Thompson-formerly Burbank Community Hospital-from a partnership of 14 physicians in October 1995.
Gillman owns a 52% stake in the current partnership, called Gateway Healthcare of Burbank. A local attorney and a lone physician investor own the remaining 48%.
Unhappy with the the state of the medical and support staff when he first purchased the hospital, Gillman replaced many longtime employees, including 90% of the managers, forced physicians to reapply for their staff privileges, and spent $1.5 million from loans and the hospital's operating funds on immediate capital improvements.
He said the changes pushed the hospital's daily census up to 40% from 10% within a year, and Thompson became profitable.
Gillman declined to release current financial information from the hospital. According to the most recent data available from HCIA, a Baltimore-based healthcare information firm, Thompson lost $351,000 in 1995-the year before Gillman took over and made drastic changes in the hospital's operations.
Gillman said he believes that former employees began complaining to county health inspectors about possible health code violations at the facility, and those who weren't fired began a union-organizing campaign.
"We beat the unions off, but the inspectors were anti-hospital from the start," Gillman said.
Los Angeles County Health Services conducted three on-site inspections between November 1996 and March of this year. MODERN HEALTHCARE*reviewed transcripts of the November and February visits. Records from the March inspection have not yet been released to the public.
The records from the first two inspections painted a portrait of a hospital in disarray. Among the violations:
An infectious-waste bin was placed near a patio where employees ate. Other trash bins were overflowing.
A limb removed during surgery had lain in the hospital morgue for more than eight months.
The hospital's magnetic resonance imaging machine and hyperbaric chamber were in use without proper county health permits.
Inpatient beds had been converted to outpatient use, and a laboratory had been moved without proper state approval.
Nurses had not received training or were not qualified for their tasks, such as inpatient surgical recovery.
Physicians with temporary privileges continued to practice at the hospital after their privileges had expired, and the medical staff operated without bylaws.
Patient consent forms for several surgeries had not been signed by patients.
Pharmaceutical storage and patient dosage records were either incorrect or incomplete.
"They were not in compliance with regulations," said Janice Caldwell, a HCFA associate administrator.
Caldwell would not comment on specific findings of the inspections.
Gillman said the hospital has reapplied for its Medicare and Medicaid certification and, at deadline, was expecting a surprise inspection at any moment.
Caldwell observed that in cases such as Thompson's, there is usually a lag of months between inspections and reapplications.
"They don't want an inspection team coming back in again just after a bad report," she said.