Lawsuit: St. Vincent’s Hospital Cooked Books

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A group of former employees from the now-defunct St. Vincent’s Hospital and Medical Center will file suit Monday in Manhattan Supreme Court, accusing management of grossly exaggerating the institution’s debt, blowing millions of dollars on their executives and consultants.

The 160-year-old institution was swimming in a billion dollars of red ink when it closed its doors in April.

Court papers reveal the hospital forked over $278,000 for a golf outing, paid its top 10 executives a combined $10 million annually, spent $17 million for management consultants and spent nearly $4 million on professional fundraising. The papers also show tax returns show the former Greenwich Village facility spent $104 million on unspecified costs listed as “other.”

Plaintiffs’ attorneys say they hope the legal action will force the State Department Of Health to release paperwork that shine a light on what really happened to all that money.

“We estimate the amount of public money that we can track at this point that was going to this hospital was approximately $700 million,” said attorney Thomas D. Shanahan. “The public deserves better than to hear a hospital was ‘bankrupt’ under a crushing $1 billion debt, when it seems they had substantial public monies coming in and that the hospital was mismanaged.”

“We’re trying to compel the Department of Health to do the right thing, not only in disclosing the records that they already have receipt of, but also they should be holding public hearings,” said attorney Yetta Kurland. “There is a greater imperative and a greater responsibility that the DOH has to ensure the health and safety of Lower Manhattan.”

Plaintiffs are hoping the civil suit will result in a new medical center to be opened on or near the site of the former hospital.

The hospital’s collapse has put an end to inpatient care and taken away the only emergency room serving hundreds-of-thousands of people on Manhattan’s Lower West Side. The community feels vulnerable, especially in light of their experiences during and after the September 11 terror attacks on the World Trade Center in 2001.

(Source: WPIX)




4 COMMENTS

  1. Deepthinker,

    Have you looked at the 990? It is a public document and easily accessed. I did, and nothing looked any different than standard operations for a hospital. Yes, they spent $4 million on fundraising, they raised $54 Million. Not a bad ratio. Salaries did not seem out of the ordinary for those in the health care fields. You would even see salaries of that amount on the YU 990. And much higher at other hospitals and large non-profits.

    The people suing are desparate and just flinging charges, but nothing, from the 990 itself, appears to stand out. At the end of 2008, there was an accumulated deficit of 725,000,000. Was there something else to do? who was going to fund this. Anyone in the health care field knows how reimbursement has been cut dramatically lately.

  2. Jose. you may be right in what you say, but what justification is there for a “non-profit”–charity?– hospital to have such a large executive staff who get paid millions of dollars a year.

  3. Deep,

    Your assumption is that these are not the standard compensation for not-for-profit hospitals. If you would look at the 2008 990 you will see deliniated on schedule O how they substantiate the compensation of heir officers and key employees. Undre intermediate sanctions rules, if they were being paid more than was reasonable compensation there would be sanctions, and excise taxes of up to 100%. Clearly, based on the policies they have described, they have done the work neccesary to substantiate the compensation (Assuming everything was reported).

    It is a common misconception that people have that just because someone works for an exempt organization they should get paid less. Hospitals and other large not-for-profits of all sort are large businesses and the snior staff are just the same as those who would be working in the non-exempt industry. Without reasonable compensation these organizations would not be able to get competent staff to run them. Do you think the union employees at these organizations accept less pay because it is a not for profit? Do you think doctors get less? Are supplies and services cheaper? Do you think only the executives should bear the burden because they work for a non profit? Many have already given up opportunities at recieving stock options and other such benefits. Should they give up also their reasonable compensation?

    Should the hospital be run worse than a proprietary institution? Should they have less staff? Should they have less competent staff? As a general rule the not for profits provided better services, yet you would think they should pay less.

    There are no two ways about it, senior executives in charge of entites that generate close to a billion in revenues and employ well over 6,000 employees will command nice salaries, but nothing appeared out of the scope of all the not for profit hospitals in NY. (They actually say that try to be within 50-75% range, hardly overly high)