The longtime chief executive officer of a community hospital in Connecticut resigned after being accused of spending too much time promoting his institution as a national model for holistic care.
The controversy brought to light problems at the hospital's HMO, making it the latest example of a hospital-owned managed-care plan losing money (See related story, p. 16).
John Bustelos Jr. resigned Feb. 12 after about 16 years at the helm of Griffin Health Services Corp., parent of Griffin Hospital in Derby, Conn.
Griffin's Suburban Health Plan lost $5.2 million on revenues of $19.7 million last year, according to the state insurance department. In 1996 it lost nearly $2.2 million on revenues of $13.7 million. The plan had about 11,000 enrollees as of December.
The HMO has been a cash drain on the hospital, which has remained profitable despite contributing more than $5 million in the past two years to meet the state's minimum equity requirement, according to Griffin officials.
The HMO's losses stemmed from an aggressive campaign to boost enrollment above 10,000. The campaign succeeded, but too many enrollees in the HMO's point-of-service plan sought expensive treatment outside its provider network, Griffin officials said.
Suburban recently adjusted premiums to align with costs.
The hospital, now under an interim successor, former hospital Chief Operating Officer Patrick Charmel, is considering selling or seeking a capital partner for the HMO, which is at least 10 years old.
Bustelos and Griffin Executive Vice President Jerold Sinnamon, who has taken a leave of absence, traveled the country discussing holistic care, said Griffin board Chairman Bob Fiscus.
The 160-bed hospital won national publicity in mainstream and trade media, including a MODERN HEALTHCARE feature on its heart disease reversal program (June 19, 1995, p. 158).
In a September 1997 news release, the hospital called itself the first facility in the country to be "based on a patient-centered care model." Representatives from more than 220 hospitals had toured the facility, which offered music, art and aroma therapy, unrestricted visiting, room service, and entertainment by musicians, artists and magicians, it said.
But the promotional binge apparently didn't win Bustelos points with some employees and doctors back home in the Housatonic Valley, midway between Bridgeport and New Haven, Conn.
"People began to get the impression that the operation of the hospital was not a priority," Fiscus said.
Bustelos could not be reached for comment late last week.
A backlash against Bustelos ensued in December, after Charmel submitted his resignation. Some employees and physicians blamed Bustelos for the COO's departure and launched a "yellow ribbon" campaign to rehire Charmel and oust Bustelos. More than 200 petitioned the board for a management change.
Some community members also complained that the board had recruited too many non-Valley residents, including alternative-care gurus. They petitioned the board to expand its membership and require that two-thirds of board members live or be employed locally.
Bustelos agreed to resign following a board review of the complaints. Fiscus declined to specify the board's findings but said board members agreed that Bustelos' resignation was in the organization's best interest.
Fiscus did not criticize Bustelos' management or blame him for the HMO's financial problems. "The organization made tremendous progress while he was there," Fiscus said.