Nation’s Largest Nurse’s Union Calls for Ouster of Wayne T. Smith, CEO of Community Health Systems
New report tracks CHS’ pattern of eroding patient care conditions,
price gouging, and corporate mismanagement
OAKLAND, Calif.–(BUSINESS WIRE)–National Nurses United, the nation’s largest union of registered nurses,
calls for the ouster of Wayne T. Smith as CEO of Community Health
Systems (CHS), in a new
report titled, Other People’s Money: How CEO Wayne Smith
gambled away the future of CHS at the expense of patients, investors,
and communities.
Release of the new report, which chronicles Smith’s mismanagement of
CHS, coincides with the corporation’s annual stockholder meeting to be
held May 14 in Franklin, Tennessee.
“Based on a review of Smith’s tenure as CEO, it appears that his primary
goal has been to enrich himself at the expense of patients, and the
corporation’s assets,” said National Nurses United President Zenei
Cortez, RN. “The CHS board must put an end to Smith’s flagrant
mismanagement. Rather than squander money on bloated bonuses the board
must direct new leadership to reinvest in the hospitals that CHS has let
fall into terrible disrepair.”
At the upcoming stockholder meeting the CHS board has proposed a
resolution to reward Smith with a compensation package quadrupling last
year’s bonus pay, despite massive losses to shareholders and untold
hardship in the communities exploited by CHS. In the report, nurses
express strong opposition to the CHS board resolution to reward Smith’s
appalling mismanagement stating that, “approving the proposal would be
an astonishing endorsement of a corporate leader working only for
himself.”
The new report describes CHS’ strategy, under CEO Smith, of operating as
a sole provider in small, non-urban markets, where lack of competition
enabled their charging some of the highest healthcare prices in the
industry while investing as little as possible in infrastructure,
staffing and supplies. The strategy also included dropping critical
services altogether if found unprofitable. From 2002 to 2015, CHS
reduced or eliminated emergency rooms, trauma centers, obstetric
services, labor and delivery services, pediatrics units, psychiatric
units, and medical detox units at hospitals throughout the country. Due
to CHS’ rural model, many of these services were the only ones available
for miles, placing particular hardship on non-urban residents.
The report also documents:
-
In addition to service reductions, CHS has been a national leader in
hospital closures. Many of these hospitals are in non-urban locales
where the economic impact of losing a hospital—often the largest
source of professional employment in these locations—can be felt
throughout a community for years. -
CHS closed four hospitals between 2014 and 2018 in Tennessee, the
state that has in the past decade, lost the most hospitals per capita
in the nation. At least two of these hospitals were closed in areas
federally designated as “Medically Underserved Areas,” and all
provided highly utilized emergency, surgical, and other specialty
services. -
During CHS’ highest performing years, prices charged at its hospitals
ranked among the highest in the nation. Today, CHS holds the #2 spot,
owning 15 of the nation’s 50 most expensive hospitals, that is,
hospitals that charge the most in relationship to actual cost of
services. -
Factors leading to CHS’ financial downturn, including Smith’s decision
to take on $9 billion of debt to acquire Triad Hospitals in 2007,
followed by the 2014 acquisition of HMA, increasing its already-huge
debt to $14 billion, a billion more than its 2013 net operating
revenues. -
The CHS board consistently rewarding CEO Smith with excessive
compensation despite the company’s poor performance. In March 2019,
while reeling from CHS’ $788 million loss the previous year, which
ended with share values near their all-time low, $2.80, shareholders
learned that Smith would be awarded a 42% raise for his performance in
2018, for a total of $7 million.
To view the full report visit: Other
People’s Money: How CEO Wayne Smith gambled away the future of
CHS at the expense of patients, investors, and communities.
“As a nurse I can attest first-hand to the devastating consequences CHS’
acquisition has had on our community hospital,” said Brenda Meadwell,
RN, Bluefield Regional Medical Center (BRMC), Bluefield, West Virginia.
“Bluefield city officials moved forward with the sale believing CHS’
promises to invest in needed improvements and retain all staff, but
after taking control they immediately cut staff and closed certified
beds. Today the permanent staff is half what it was at the time of
purchase, short staffing is chronic, and there is an ongoing lack of
adequate supplies.”
“I will be attending the annual shareholder meeting, both as a
shareholder and a nurse at a CHS-affiliated hospital, to make sure that
other shareholders and the board understand what is happening at the
hospitals they are responsible for,” said Meadwell. “It is wrong to
reward CEO Smith with a lavish compensation package, as the value of CHS
stocks plummet alongside the plummeting quality of patient care at the
chain’s hospitals.”
Registered nurses at Bluefield Regional Medical Center in West Virginia,
and several other hospitals affiliated with Community Health Systems
(CHS), voted to affiliate with National Nurses Organizing
Committee/National Nurses United (NNOC/NNU) in 2012, in response to
management’s continued failure to improve patient care conditions. CHS
engaged in rampant and serious unfair labor practices in an attempt to
weaken support for the union and forestall reaching initial collective
bargaining agreements. The NLRB has upheld numerous unfair labor
practice charges filed against the hospitals by NNOC/NNU and three US
District Courts issued injunctions in response to the employer’s
unlawful conduct early in contract negotiations with RNs.
National Nurses United is the largest and fastest growing union of
RNs in the nation. NNU has won landmark health and safety protections
for nurses and patients in the areas of staffing, safe patient handling,
infectious disease and workplace violence protection.
Contacts
Martha Wallner, 510-273-2264