CAMDEN, SC (WIS) – The only acute care hospital in Kershaw County is having a hard time paying its bills. Kershaw Health has lost more than $1.6 million in the last two months, and in April received a $300,000 tax payer bailout for its ambulance service. Hospital records show patient admissions, the main source of hospital revenues, are down in every category when compared to last year.
The hospital is run through a nonprofit organization called The KershawHealth Foundation and also spends tax dollars and relies on income generated from contributions to the foundation, as well as income derived from the medical services the hospital and doctors in the hospital system generate.
Despite its financial troubles, KershawHealth handed out $439,548.46 in performance bonuses to its highest-paid administrators just before Christmas last December. The hospital's Chief Executive Officer makes a base salary of $332,994 and took home a $71,239.69 bonus check on Dec. 23, 2012.
In 2012, the hospital paid its six top administrators base salaries totaling $1,076,024. The nonprofit's director earned $117,104 in 2012 and took home a bonus check in December 2012 of $11,710.
On July 19, a Chicago-based credit rating firm graded KershawHealth's outlook to "Negative," according to a FitchRatings report. The report states KershawHealth showed, "negative operating income in two of the past four years." In 2012, the hospital showed income losses of $2.8 million, the FitchRatings report shows.
Within days of Kershaw County Council's decision in April to hand the hospital a check for $300,000 to bail out its ambulance services, we filed multiple Freedom of Information Act requests. The following reports are what we found concerning KershawHealth's spending.
EMPLOYEE CUTS AND EXECUTIVE BONUSES
In 2011, KershawHealth board members confirmed hospital administrators initiated a round of layoffs that totaled somewhere about 20 employees. The employees were hospital staff, which included nurses. Terrie Bridges was a KershawHealth nurse until May 2011 when she said the hospital's Chief Operating Officer, Mike Bunch, laid her off.
"My performance evaluations were all very high," former KershawHealth nurse Terrie Bridges told WIS as she opened up her personnel file to us. Bridges said she was part of the first round of layoffs at the hospital in 2011, a year she said administrators told her they were having a tough time paying the bills. "I was in the hospital working. They came and took me out of a room and took me into another room to inform me that I didn't have a job anymore," Bridges said.
"I was devastated, obviously. A single person on my own and they just came in that day and just let me go. My only explanation was a reduction in work force," Bridges told WIS. Before her layoff, Bridges said she knew the hospital's finances were not good when the hospital stopped paying for continuing education for its medical staff. "I did at that point. I went to one of my supervisors about it, you know, I need some more CMEs to keep my license up. Well, you're on your own, I know you need them, but you're on your own."
When Bridges lost her job in 2011, the man she said delivered her the news, COO Mike Bunch, made a base salary of $208,700, according to records the hospital turned over to WIS through a Freedom of Information Act request. Those records show that four months before Bridges was laid off, the hospital gave Bunch a raise of $20,000. Bunch received a bonus check of $50,544, six months after Bridges lost her job.
That same year, KershawHealth CEO Donnie Weeks made a base salary of $316,511 and six months after Bridges lost her job, the hospital paid Weeks a $96,219 bonus.
"I'm really surprised that that's the case," Bridges told WIS. "That they would be in such financial shape and still the top people in the hospital making that kind of money. If they're making the salaries they are and I was let go with the meager salary that I made, that's just a question I have. I was working, I was a good worker. I don't understand why it impacted me and didn't impact them," Bridges said.
Bridges moved away from Camden and is now living in Lexington County. She said she was able to find a new job at a Florence hospital; her commute is a more than two hour round trip. Bridges said she would have taken another chance with KershawHealth. "Absolutely, yeah I would have. But, it's kind of hard to do that now, knowing what I know."
INVESTIGATING THE HOSPITAL'S FINANCES
Within days of KershawHealth's request for a $300,000 bail out from the county, WIS sent several Freedom of Information Act requests to the hospital's foundation. We wanted copies of contracts, bonuses and compensation records for all hospital and foundation employees earning at least $50,000 a year. The state's open records laws allow publication of any public employee's salary that totals at least $50,000.
A little more than two months later, KershawHealth released those records. Here are the salary totals and bonuses paid to the employees the hospital identified as making at least $50,000 a year:
In April, county council agreed to give the hospital $300,000 to help pay down the deficit inside the hospital's emergency medical services. Hospital records show EMS services lost $846,000 in 2012. Kershaw Health's EMS service overspent by $4.2 million over the last five years, according to a hospital power point presentation to county council in April.
County Councilman Jimmy Jones launched an investigation into the hospital's spending after the county handed over the bailout. When asked whether the hospital was at risk of not being able to afford to operate, Jones answered, "I don't know that I'm qualified to answer that question. But, let me tell you what I am qualified to say; I'm worried."
Jones said he asked hospital CEO Donnie Weeks for copies of the hospital's ambulance service financial audits, but said he never received them, "We never received that prior to their request to pick up the deficit of the ambulance service," Jones said. "Did that concern you," Barr asked Jones, "Oh, absolutely. You're going to come before county council and ask this body to take almost $1 million out of the taxpayers' pocket to fund a deficit and you won't even share information with us," Jones asked.
"They've obviously got a lot of money to give bonuses and to give salaries. But again, to show losses on the other end, I just can't understand it," Jones said.
"Frankly, Jody, I don't mind telling you I've been surprised, been surprised. I did not know what I was getting into," KershawHealth board member Dariel Ogburn told WIS. Ogburn rejoined the hospital board in October. He was a board member for several years in the 90s, but left the board several years ago.
Ogburn is a former five-term member of the South Carolina House of Representatives from Kershaw County. Ogburn told WIS he had no idea the salaries and bonuses totaled to what they are for KershawHealth's administrators. "I think county employees, school teachers in this county and the men and women who work in the factories around here are going to be shocked to see what salaries are paid over at that hospital. I'm shocked and I've been around the block a few times," Ogburn said.
"When I see some of the big number of salaries and some of the administration over there, it disturbs me, particularly when you balance that against what's happened at the working level down there," Ogburn told WIS. "The people who sweep the floors and empty bed pans and the nurses and those sorts of people, they haven't been able to enjoy any increases and raises."
WIS ATTEMPTS TO GET KERSHAW HEALTH LEADERS' EXPLANATION
On July 29 and 30, we emailed CEO Donnie Weeks, KershawHealth Foundation director Joseph Bruce, foundation chair Mary Ellen Green, and current KershawHealth board member Scott Ziemke, asking for on camera interviews concerning our investigation into the hospital's spending. Each responded the following day, declining our request for an interview.
We were able to contact former KershawHealth board chair Jay Green by phone on July 31. Green was the KershawHealth chairman when he signed Weeks' current contract in 2008, an agreement that set Weeks' salary at $310,305. Green, in a phone conversation, told WIS he'd discuss how the board reached a decision on Weeks' salary total in 2008, but we'd have to allow him to call back after a meeting Green said he had scheduled for later that day.
Green agreed to call us back after 3 p.m. on July 31, but Mr. Green never kept that promise. We still have not heard back from Green concerning his decision on the Weeks contract.
KershawHealth's board had a scheduled meeting on August 1 to discuss a "personnel matter" in executive session. When the board returned an hour later, the board unanimously agreed to allow Weeks to retire. Weeks' current contract would have automatically renewed for another five years on August 31, had Weeks decided to continue his employment.
The board meeting was the only opportunity we had to question Weeks and Ziemke. Ziemke was the board chairman in December when hospital records show he approved $71,239.69 in bonuses for Weeks.
We asked Ziemke for an interview following the August 1 board meeting, but he was not interested in answering our questions, "Not today, thank you," Ziemke told Barr. "You signed off on a little more than $70,000 in bonuses in December for the CEO here, would you explain," Barr asked. "I believe I responded to your request for an on camera interview and I'm going to decline, but thank you very much for the opportunity," Ziemke said.
KershawHealth personnel records show executive bonuses are based on the percentage of performance goals met each year. In 2012, Weeks' file shows he met only 50 percent of his goals for the year. Ziemke would not explain his decision to sign off on Weeks' $71,239.69 bonus paid to him on Dec. 23, 2012. "Can you explain these bonuses that were given out? The goals it says Mr. Weeks met were 50 percent of the goals set for him in 2012, but he still walked away with $70,000 in bonuses," Barr asked. "Thank you very much, thank you Jody, appreciate it," Ziemke said as he walked out of the board room.
When we caught up with Weeks after the board meeting, he wouldn't discuss his or the other bonuses he approved for his administrative staff, "Can you explain to—again—the people who gave to this foundation and to the taxpayers of Kershaw County why the salaries are where they are and people who met only 50 percent of their goals received; well in your case, a little more than $70,000 in bonuses," Barr asked Weeks. "I'm not. We're finished discussing that. There's not anything else for us to discuss. This meeting today, this motion today, was about my retirement and here you are pursuing a discussion about other things. I'm not going to discuss it with you," Weeks told WIS.
KERSHAW HEALTH PROPERTY PURCHASES
Since 2004, Kershaw County property records show the hospital has spent millions on property purchases in Camden and Elgin. The property purchases total $4,156,471. Some properties are being used by medical service providers, but some have sat empty for years.
Here is a list of property purchases by date, seller, address and the amount Kershaw Health paid:
Many of the properties KershawHealth bought are sitting unused. Because of its nonprofit status, none of the hospital's properties generate any tax revenue for the county.
We went to all of the properties on the list and found seven properties were either operating medical services for the hospital or belonged to doctor's offices owned by KershawHealth.
Our investigation revealed six properties were empty houses, abandoned shopping centers or empty lots. The hospital paid $1.3 million for the old Piggly Wiggly shopping center on East DeKalb Street in April 2008. When we visited the property two weeks ago, a KershawHealth employee told us none of the buildings had power or running water and it had been that way for years.
Only one business is still operating inside the outlet center; it's a prosthetics and orthotics business. The sign on the door shows it's open two days a week.
The hospital paid $91,500 for two lots in the 1200 block of Roberts Gardner Street. One lot is empty; the other has an unused house sitting on it with "No Trespassing" signs posted around it.
In May 2010, KershawHealth paid the city of Camden $113,756 for an unused school building at 1213 Lakeshore Drive. The building is also posted with "No Trespassing" signs, but the hospital turned the back of the building into a parking lot. The hospital pays a security firm to post guards inside the parking lots as a safety measure for employees who park there. The parking lot is one block away from the hospital.
We asked Donnie Weeks about the property purchases after the August 1 board meeting, "$4.1 million. Can you explain to the foundation and to the people who gave to this hospital and to the taxpayers why that happened," Barr asked. "Today, I'm not going to discuss anything else with you. You asked me the question about the retirement and I answered that appropriately and that's it. We're not going to discuss anything else," Weeks said.
"They can't pay their bills, they're coming to county council asking for money to bail out an ambulance service, but yet they spend $4.1 million in the last 10 years on properties around Camden. Does that add up," Barr asked Kershaw County councilman Jimmy Jones. "No, it doesn't add up and those are real figures that you just asked about. Those numbers are there, that debt is there and this is why I can't see Kershaw County council putting more money into the hospital when they're not even taking care of their own business," Jones replied.
"How do you go out and purchase property when you're losing money? How do you sign new contracts that's going to indebt the hospital for years to come and you're not making a profit, you're not making any money? I just don't understand the way they do business," Jones told WIS.
KERSHAW HEALTH'S FUTURE
Changes to the KershawHealth board started in October 2012, after county council elected four new members. Those members are: Dariel Ogburn, Karen Eckford, Paul Napper and Steve Holliday, Jr. In April, hospital chairman Scott Ziemke stepped down from his chairmanship.
County Council is currently accepting applications to fill three hospital board vacancies that will open in October. Board members Don Witham, Scott Ziemke and George Corbin's terms end at the end of September.
"Did you expect, nine months later, to be sitting here talking about salary totals such as this and the finances of that hospital to be what they are today," Barr asked Kershaw Health board member Dariel Ogburn. "No, I'm totally surprised, completely surprised," Ogburn told WIS. "We have inherited some problems that were not of our making and we're big enough to deal with them and we're going to deal with them," Ogburn said.
The problems, according to Ogburn, are monthly financial losses at KershawHealth, across-the-board losses of patient admissions and salaries and bonuses Ogburn said are "way out of hand." Ogburn couldn't give a definitive answer as to whether the hospital could continue to operate, given its financial state, "I think we've got a challenge to do that," Ogburn said.
"I think there needs to be a clean overhaul with administration--that's my personal opinion--I think they need to bring in some fresh ideas; a new person that can get in there and can bring us where we need to be and save this hospital and bring it back to the hospital it used to be in our community," Kershaw County councilman Jimmy Jones told WIS. Jones is one of seven county council members who elect the hospital's board.
Jones said the four new members who went on the hospital board, "are heavily focused on saving this community's hospital." "To save this hospital financially, to save it administratively, what's got to happen at KershawHealth," Barr asked. "We've got to get the right board members on board. They've got to be strong, they've got to be independent and they cannot be intimidated," Jones said. "Everybody wants to go along to get along; that's the easy thing to do. The tough thing to do, and it's not fun, is to ask those difficult questions knowing that you're going to upset somebody. But, those are the kind of people I want on that board, that will do that and I think that's the only way that we're going to be able to save this hospital," Jones said.
Ogburn said he noticed trouble on the board as soon as he joined it nine months ago. The board, according to Ogburn, had a climate of ignoring the Freedom of Information Act and that's something he said he has fought to change. Ogburn also told WIS he fought and ended what he calls "secret committees" within the board. Those committees, according to Ogburn, negotiated contracts and dealt with hospital finances outside the view of the rest of the board.
"We have made some changes and making progress in regard to that, but it's been frustrating to try to get those changes made with the resistance that's coming from some of the old members of the board," Ogburn said.
In April, Ogburn and the rest of the board elected a new chairman after Scott Ziemke gave his chairmanship up. Ziemke was the chairman who signed off on a $71,239.69 bonus check for CEO Donnie Weeks last December.
Jones said he's hopeful the new hospital board members start paying dividends for Kershaw County tax payers, very soon. "I know there are some board members that are working very hard to get to the bottom of this, but I still have some great concerns," Jones said.
"Jody, we've got a great hospital," Ogburn told WIS, "We've got a great tradition. We're celebrating our 100th year, we've got a lot to be happy about, a lot to be proud about in that hospital, but we've got some challenges out there and if we don't get our house in order we may have some choices to make down the road that we don't like."
Outgoing CEO Donnie Weeks' contract expires on August 31, 2013. The board has not made a decision as to who will take over after Weeks leaves the hospital.
There is a special called meeting Thursday night at 5:30 at the KershawHealth Resource Center on Battleship Road in Camden. The meeting is open to the public and it's expected the board could appoint Weeks' replacement. Sources tell WIS, Weeks' second-in-charge, VP Mike Bunch, could take over as soon as next month.