Lessons for FAHC from the UVM hockey scandal

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(Host) Commentary Timothy McQuiston offers a cautionary tale on the recent shakeup at one of Vermont’s largest institutions.

(McQuiston) It’s been just about three years since the University of Vermont was rocked by the hockey hazing scandal. As you may recall, a freshman player alleged that he was hazed by fellow players as part of the team’s initiation rites. It was more than just a dumb guy thing. It was against the University policy and both the team coach and the athletic director had warned the players not to engage in such degrading activities.

They did it anyway. The result was scandal, a lawsuit, the player left the team, the governor and state attorney general got in the middle of it and eventually the season was cancelled. An unmitigated disaster.

Many of these elements sound familiar in light of the recent allegations involving Fletcher Allen Health Care. On Tuesday, the hospital’s trustees announced that its CEO had resigned because of allegations involving Fletcher Allen’s $300 million Renaissance Project. Or, more specifically, the apparent attempt to circumvent the state permit process in the construction of the $55 million parking garage.

CEO William Boettcher will receive a $750,000 retirement package, as prescribed by his contract. Trustees were very clear in stating that this was not a buyout of his contract. Boettcher’s annual salary was $525,000.

While either sum seems completely out of scale for Vermont, trustees had used a compensation formula based on other institutions of similar size in other parts of the country when they hired Boettcher in 1998. Fletcher Allen, by the way, is a half-billion dollar business with almost 6,000 employees.

However, the real damage to Fletcher Allen financially and to its credibility, of course, would occur if the investigation leads to a civil suit or even criminal charges. Fletcher Allen will cover Boettcher’s legal expenses, if there are any. Bill Boettcher, for one, and another former trustee I’ve talked to, for another, have said that the whole story has yet to come out, and when it does, it’ll exonerate the now former CEO.

Here is where we all have to be careful. To a large extent, just as in the hockey scandal, the initial allegations in the Fletcher Allen case have come from one former employee. In the hockey case, those who stood accused said that once the facts were known, the whole thing would look quite a bit different than the initial hoopla suggested. And it did. In the hockey case, the hazing did occur, but the motivation of the accuser changed the entire perspective of the incident. Nevertheless, in the end, the reputations of all the parties were all tarnished by the scandal.

And here’s the warning: the hockey team, ranked number one in the country a few short years ago, has not yet recovered. We don’t know how the Fletcher Allen case will be ultimately resolved. It could look quite different from the way it looks now. But whatever the result, it’s the hospital’s reputation that is most at risk.

This is Timothy McQuiston.

Timothy McQuiston is editor of Vermont Business Magazine.

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