MANAGED CARE Conflict question raised on health oversight board BY STEVEN STYCOS

As Woonsocket’s Landmark Medical Center continues to stumble financially, questions about a possible conflict of interest have been raised about a hospital consultant who serves on a Rhode Island Department of Health board that oversees hospital expansion plans.

Marvin Greenberg of Barrington, an active member of the Health Services Council and former member of The Miriam Hospital board of trustees, voted to approve Landmark’s most recent expansion applications, although he works as a fundraising consultant for the hospital. Another council member, Wallace Gernt of Providence, also worked for Landmark, as a public relations consultant. Gernt, however, regularly recuses himself from issues concerning Landmark and another client, South County Medical Center.

The state Code of Ethics bars public officials from participating in decisions when they have a "substantial conflict." According to a 1997 Rhode Island Ethics Commission advisory opinion requested by Gernt, "A substantial conflict includes potential financial benefit for the official, a family member, a business associate, and/or a business by which the official is employed."

With its weakening financial condition, Landmark has struggled in recent years to expand its services to attract new income. A March health department study indicated Landmark was in the worst financial condition of any Rhode Island hospitals, and it has voluntarily agreed to provide the health department with its monthly financial statements, according to John Donohue, chief of health systems development. The monthly reports are confidential, but the health department study found the hospital’s net assets, or the value of all its property minus its debts, declined from $28 million in 1998 to $6 million in 2001. The hospital’s poor financial condition is also a factor in its merger discussions with Roger Williams Medical Center (see "Shifting landscape," News, May 2).

Meanwhile, Landmark has won approval for two major capital projects. In August 2000, Department of Health Director Patricia Nolan, acting upon the unanimous recommendation of the Health Services Council, approved a $4.1 million Landmark proposal to build a cardiac-services center. Then in November 2002, Nolan approved a Landmark proposal to establish a $6.1 million cancer center with for-profit Radiation Therapy Services (RTS) that also had unanimous council support. Under the proposal, RTS owns 62 percent of the center and Landmark 38 percent.

Health department records show that Greenberg served on the project review committee for both proposals and voted for them. In addition, The Call of Woonsocket reported that Greenberg argued for the full cancer center project when a Blue Cross representative suggested a smaller design. Gernt, whose financial disclosure forms indicate he worked as a consultant for Landmark from 1999 to 2002, recused himself from both votes.

Greenberg says he was hired to help the hospital secure a major contribution from then-CVS CEO Stanley Goldstein after the first vote. But he admits he should have recused himself from the radiation therapy project. "That’s the only one I should have [recused from]," he said, "but I don’t recall because I thought it was an RTS thing." And he defends his work on the council, saying, "I’m for things and against things based on need, but I’m not for sale."

Mary Kozik, Landmark’s vice president of development and public relations, says Greenberg started working for the hospital in December 2000 and received $61,503 during the next two years. Greenberg says he continues to work for Landmark "sporadically" through his wife’s consulting firm. Greenberg’s financial disclosure reports list income from the consulting firm, but make no mention of Landmark.

Health department records show a third council member, lawyer Victoria Almeida, recused herself from all projects involving Landmark, because other lawyers in her firm, Adler Pollack & Sheehan, have represented the hospital in the past. "You have to go beyond the letter and spirit of the law sometimes, to appearance," Almeida explains, "I would rather be overly cautious."