The report of an internal investigative committee at 510-bed Fletcher Allen Health Care, Burlington, Vt., denounces top hospital managers for their handling of a $173 million-plus expansion project and for withholding information from state regulators to avoid a certificate-of-need review. Fletcher Allen released the 72-page report on its Web site; its board formed the committee in July to investigate allegations of regulatory noncompliance. Management "lacked the candor and forthrightness that should guide (the hospital's) conduct in dealing with the public, the government and its own board of trustees," the report said. The hospital board, meanwhile, failed to insist on regular, detailed reports on the project, exacerbating the "problems instigated by management's misguided regulatory practices," Fletcher Allen Chaiman Philip Drumheller said. "The trustees bear ultimate responsibility for the actions of Fletcher Allen."
The executives who had primary responsibility for the $173.4 million Renaissance Project and regulatory compliance -- Thad Krupka, Fletcher Allen COO, and David Demers, the hospital's senior vice president of planning and business development -- have agreed to step down, interim CEO Ed Colodny said. Colodny was named to the position in early October after the resignation of then-CEO William Boettcher, who had been placed on administrative leave in the midst of the scandal. In conjunction with the Renaissance Project, Fletcher Allen began construction on a $55 million underground parking garage without a CON, arguing that a CON was unnecessary because a third party was building and financing the garage. The hospital eventually sought and was granted a CON after a long dispute with the state. Meanwhile, the state ordered a halt to a $9 million software upgrade for lack of CON approval. At a news conference Wednesday, Drumheller apologized to employees and the community, saying, "This happened on our watch, and we accept responsibility." Read the committee's full report at www.fahc.org. -- by Julie Piotrowski