Loss of innocence

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(Host) Vermonters may once have thought that our state was immune from the financial deceit practiced by such corporations as Enron and WorldCom. Commentator Allen Gilbert thinks that’s all changed with the problems at Fletcher Allen Health Care in Burlington.

(Gilbert) The last week of July 2002 could be the week that Vermont lost its economic innocence. Granted, maybe we’ve all become too caught up in Enron, WorldCom, Harken Energy, and Haliburton. This is not American business’s finest hour, nor government’s finest hour. The stock market tells us that, with punishing honesty.

The shenanigans and corner-cutting that apparently are routine among some large corporations usually seemed distant from Vermont. Sure, Vermont investors are suffering from the stock market’s dive, and state revenues are off partly because of that dive. But Vermont businesses not playing by the rules? No. Deceit and corner-cutting don’t happen here. We’re too small a state. You can’t keep secrets. Regulators step in at the first whiff of trouble.

Well, that picture changed two weeks ago. Unseemly business practices in our own backyard were alleged. The scene was not pretty, and no one looked very good — not the business’s administrators, nor its board, nor state regulators.

The business was, of course, Fletcher Allen Health Care. It’s ostensibly a nonprofit organization, but health care in this country has ceased to be a disinterested venture whose only mission is making and keeping people well. When a nonprofit’s CEO earns over half-a-million dollars a year, you know that at least some of the folks aren’t working just for altruistic reasons.

A desire to be bigger and better, and to attract new revenue drove the hospital and its board to undertake a huge construction project, one of the largest in the state’s history. It was so big that they knew it might have trouble getting past state regulators. So the hospital’s CEO allegedly devised a scheme to keep a major portion of the project off the books, so regulators wouldn’t scrutinize it. Some board members may have known of the deceit.

A financial manager within the hospital fortunately blew a whistle on the deal. But the public didn’t learn the details until AFTER state regulators had granted a permit for the entire project. Indeed, the information on possible wrongdoing wasn’t disclosed until news reporters demanded it.

And then word trickled out that the hospital might have used a similar deception to keep another project off the books. Worse, some board members have ties to a company that benefited from this project.

The hospital board has promised a full investigation of the charges. But in the public’s eye, the board’s integrity has been compromised by possible conflicts of interest. Likewise, in the public’s eye, the state’s commitment to a comprehensive investigation has been compromised. State officials have so far looked more like lap dogs than bulldogs in pursuing allegations of wrongdoing.

Federal prosecutors are now also on the scene, and maybe they can sort things out. But this is a mess. Public trust is at stake — trust in the hospital, trust in government. And of course there’s a lot of money at stake. That, after all, is what created the mess in the first place. Someone’s got to figure out a way that our health care dollars can be better spent.

This is Allen Gilbert.

Allen Gilbert of Worcester is a writer and parent who is active in education issues.

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