The nation's largest union of registered nurses wants new leadership for a company that runs three Northwest Indiana hospitals, citing alleged corporate mismanagement.
And another report from last week indicates the hospital system could be on shaky financial ground.
National Nurses United this week called for the ouster of Wayne T. Smith, CEO of Community Health Systems. The Franklin, Tennessee-based hospital chain owns Porter Regional Hospital and LaPorte and Starke hospitals.
The company is not affiliated with Munster-based Community Healthcare System.
"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,” National Nurses United President Zenei Cortez said.
“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.”
The union put out a report this week that detailed the alleged mismanagement of the company, such as closing hospitals, charging among the highest prices in the nation, taking on debt to acquire hospitals and compensating Smith generously despite poor financial performance.
"In March 2019, while still reeling from CHS’ $788 million loss the previous year — and a year-end share price near its all-time low, $2.82 — shareholders learned that Smith would be awarded a 42% raise for his 2018 performance, for a total of $7 million," the report alleges.
Last week, a hedge fund manager predicted the company would go bankrupt, Reuters reported.
Community Health Systems' "pile of debt and the declining profitability of hospitals make it almost certain that this patient will die," said Ryan Heslop, portfolio manager of Firefly Value Partners LP, according to the news service.
Community Health Systems, a for-profit chain, purchased LaPorte and Starke hospitals in 2016 and Porter hospital in 2007.
Rebecca Ayer, a spokeswoman for the company, contended that the nurses' union represents only 225 of the company's 82,000 employees. She said the report is "filled with information that has been taken out of context and inaccuracies that are designed to intentionally create a distorted perspective about our company."
"Community Health Systems is making good progress with strategic initiatives to position our company and local hospitals for long-term success," she said. "We are seeing volume growth in the many of our markets and continue to make investments, like the replacement facility in La Porte, where we have more opportunity to grow."
The company is building a new $125 million hospital in downtown LaPorte.
"Yesterday, our stockholders overwhelmingly re-elected our CEO, Wayne Smith, to the company's board of directors (with 98.6% of the vote in favor of his election) and also overwhelmingly approved this year’s 'say on pay' proposal, demonstrating their support and approval of the executive compensation plan," Ayers added.