Mount Sinai Mired and Sinking
Enrique Davila dedicated 23 years of his professional life to Mount Sinai Medical Center, the largest employer in Miami Beach. The 58-year-old Cuban-American oncologist was twice president of Mount Sinai's medical staff. He sat on the executive committee of the hospital's board of trustees for two years, and secured two five-year grants from the National Institutes of Health totaling $3.4 million for Sinai's Comprehensive Cancer Center; that's among the largest research gifts ever awarded to the nonprofit hospital.
Even two years removed from his job as director of the cancer research center, Davila, who has a stern voice and a determined stride, is still a fixture on the medical campus — much to the chagrin of Mount Sinai's leaders.
For the past six months, Davila has blasted Mount Sinai's $1.2-million-per-year chief executive, Steven Sonenreich; trustee board members; and the hospital's fundraising arm, the Mount Sinai Medical Center Foundation. He blames them for spiraling financial troubles and declining healthcare quality. He's penned lengthy letters to the foundation's executive director, Michael Milberg, and the president and chairman of the board of trustees, Laurens Mendelson, complaining about Sonenreich's salary, which in 2004 was more than that of the CEOs of Baptist Health South Florida, Mercy Hospital, and Jackson Memorial. He is also piqued by the recent downgrading of the hospital's bonds to junk rating and tens of thousands of dollars wasted by hospital leaders, who unsuccessfully tried to influence recent city elections.
And things could get worse. On January 29, city voters will decide whether to drastically limit what can be developed on the hospital's main campus at 4300 Alton Rd. and at the Miami Heart Institute, a 10-story medical building at 4701 Meridian Ave., which Mount Sinai owns and wants to sell.
"Mount Sinai is sinking faster than a cinderblock in the ocean," Davila says. "Getting rid of the CEO is one step in saving it. Until then, change won't happen."
Sonenreich defends his job performance and political activities, as well as those of his hospital's employees and supporters. "It's important to be politically active and to stand behind individuals who are supportive of the healthcare agenda in this community," he says. A tall man with thinning gray hair, dressed in a crisp blue-and-white striped shirt, red-and-blue print tie, and dark gray suit slacks, Sonenreich also insists his salary is reasonable. "No one questions that individuals in positions like mine earn a lot of money," the 54-year-old CEO says. "But I work very hard because I love this hospital. This is where I met my wife and where my kids were born. For people to take cheap shots is irresponsible."
The hospital has a rich history in Miami Beach. It was established in 1949 by a group of philanthropists and concerned citizens to make healthcare readily available to all people, regardless of race, creed, or ability to pay. Today Mount Sinai has 955 beds, employs 3,000 people, and attracts 500 volunteers. It also has the most active cardiac program in South Florida. More than 722 open-heart surgeries and 6,251 diagnostic and therapeutic cardiac catheterizations were performed there in 2006. And it offers the only National Cancer Institute-sponsored community clinical oncology program for adults in the state.
And there's more to come, says Sonenreich. A new nine-story glass-and-metal medical building with 85,000 square feet of office space for physicians is 95 percent leased. "There are many doctors who want to practice at Mount Sinai," he says. Then there's a cardiac catherization lab where Mount Sinai spent more than $15 million on state-of-the-art medical imaging equipment over the past three years and hurricane-proof windows installed on all three floors of Sinai's Green building, which houses the hospital's intensive care unit and maternity ward. "We've spent $35 million to make sure these facilities are safe during a major storm," Sonenreich says.
But Davila and some Miami Beach activists say Mount Sinai has been on the decline since 1998, when Bruce Perry was hired to replace longtime CEO Fred Hirt. Three years later, Perry had to resign after predicting a profit and then having to admit to a $64.8 million loss. He was replaced by Sonenreich, who began his career at Sinai in 1976, rising up the ranks from clerk to chief operations officer until he left in 1996 to become CEO at Cedars Medical Center. He came back to Mount Sinai in 2001. "I left a stable job for a place on the verge of bankruptcy," Sonenreich says. "I've made tough decisions day in and day out, so having detractors comes with the territory."
The hospital's bottom line indicates Sonenreich hasn't fared much better than Perry. In 2002, Sinai suffered an $8.5 million net loss, and the figure would have been much higher had the foundation not anteed up more than $30 million to cover the deficit. The hospital lost $10 million in 2003, $7 million in 2004, and $8 million in 2005 (excluding investment earnings), but was able to pay its bills by transferring $10 million from the hospital's foundation.
In the past few months, Mount Sinai has taken a one-two punch of problems. First, on October 19, Standard & Poor's revised its ratings on Sinai's bonds from stable to negative. The rating service reported the hospital had a loss from operating earnings of $12.9 million in 2006. "Although management has responded quickly to reduce expenses, the magnitude of the current year's operating and volume losses make it difficult to implement an immediate turnaround," the S&P report stated.
Then there's the heart institute deal. Mount Sinai bought the building in 2000 for $75 million. Steven Levinson, a 27-year Miami Beach resident, says Mount Sinai has made bad investments, including Miami Heart Institute. "Every year they have to carry over a $75 million debt plus the cost of maintaining a near-empty building," Levinson notes. "No wonder they are losing money."
Then, this past May, the hospital revealed its intention to sell it. Sale proceeds would be used to pay some of the hospital's debt or for the construction of a new 10-story medical building on the Alton Road campus. ("This is not a bail-out," Sonnenreich insists.)
Homeowners who live near the heart institute opposed the sale. They feared the hospital wanted to sell the land to a high-rise developer. So last summer, then-city commissioners Matti Bower and Saul Gross proposed a referendum that, if approved by voters, would effectively prevent Mount Sinai from selling the Miami Heart property for condos.
Mount Sinai backers tried to derail the plan. This past August 28, Miami Beach Planning Board members Robert Kaplan and Matthew Adler voted against sending the referendum proposal to the city commission. Both men sit on the foundation's board, and Adler's father, Michael, serves on Mount Sinai's board of trustees. Michael Adler has spoken out against allowing voters to decide the fate of Miami Heart.
Despite protests from Mount Sinai supporters, city commissioners voted unanimously October 17 to put Bower and Gross's measure on the ballot.
Then dozens of people with ties to Sinai gave $86,000 to eight of 12 candidates in the recent Miami Beach City Commission elections. Most of that went to mayoral candidate Simon Cruz and commission contenders Luis Salom and Michael Gongora, who are all strong hospital supporters. Salom and Gongora both lost. Cruz qualified for a November 20 runoff with Matti Bower, who wants to limit Mount Sinai's growth.
In the days leading up to the runoff, Michael Adler and Mount Sinai trustee Leonard Wein Jr. paid for two political mailings endorsing Cruz, who also collected $50,050 in campaign contributions from doctors, medical staff, hospital executives, trustees, directors, and general members of the medical center's board.
Michael Adler collected $8,000 in campaign donations for Cruz from friends, relatives, and his various businesses. Adler says he raised money for Cruz because they agree on many Miami Beach issues. Mount Sinai is only one of them. "I believed he was the best candidate for the city," he says. "Yet I've been personally attacked. People have questioned my ethics."
"Some people involved with Mount Sinai have committed a huge disservice to the hospital and the city," opines Miami Beach Planning Board Chairman Victor Diaz. "They took an institution supported by everyone in the community and turned it into political football."
But the effort failed. Bower beat Cruz handily. And that doesn't bode well for Sonenreich, Adler, and company, adds Davila. "I don't think they have a chance of defeating the referendum," he says. "The only way to save Mount Sinai is to save it from them."
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