Death and Profits

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Bennett warned that the forecast for the fourth quarter of the year looked even worse. "To meet these financial projections and to continue to have the needed cash to pay our vendors and expand our hospices, we must show substantial net income in the second half of the fiscal year, 1990."

On May 30, 1990, administrator Debi Dunlap responded by writing a memo to her Chicago staff stressing the need for placing hospice patients in hospital beds in order to increase the company's revenues. (HCI receives nearly four times more Medicare money A $386 per day A for a hospitalized patient than for a patient who remains at home.) "The low census in both inpatient units [leased hospital wards] cannot continue to occur," Dunlap wrote, repeating the theme of Bennett's cash-flow call-to-arms. "Quite frankly, it is strangling us financially."

The memo stated that if supervisors did not fill all of the beds in their hospital units every Friday, they would be called in on the weekend to do so. Dunlap also reiterated a standing policy: All new patients should be encouraged to spend their first day in the hospital for "evaluation" purposes. Dunlap concluded her memo with this reminder: "As always your in-patient is valuable."

Both Dunlap and a general manager for the Chicago area, Mark Singer, say the latter policy came straight out of Miami. "We were being flown back and forth from Chicago to Miami to learn corporate culture, to learn how the company operated," recalls Singer, who no longer works for Westbrook's company. "They were the ones who told us to make sure the admission counselor on a new signup tried to place that patient into the hospital, at least for the first 24 hours, under the guise of educating them to the hospice program. The Miami and Fort Lauderdale managers at that time were the ones who told us that. I didn't just make that up. They told us what to do." (A company spokesman denies that any such policy ever existed.)

At some point during the summer of 1990, Dunlap's memo, and a similar one written earlier by HCI regional vice president Susan Koziol, were leaked to the Chicago Tribune. (Bennett's original memo, however, was never publicized.)

When company officials learned the Tribune may have obtained these internal memoranda and might be preparing an investigative story, they scrambled to develop a strategy for response. On August 9, 1990, two Miami executives met at HCI's Miami offices with representatives from the Coral Gables public relations firm of Bruce Rubin Associates.

Summary notes from that meeting, written by a Rubin employee and reviewed by New Times, state: "Client [HCI] informed firm [Bruce Rubin Associates] about a potential crisis situation at the Lombard office in Chicago. An internal memo written concerning the in-patient census was thought to be acquired by the Chicago Tribune. Firm offered to call the Tribune and determine if they're working on a story on HCI." Reflecting company officials' concern, the memo also suggested, "In preparation for a crisis situation, firm suggests that all upper level management employees' phone numbers should be distributed to firm and client. Those numbers should include home numbers, car phone numbers, etc."

HCI executives in Chicago were also preparing for the worst. An August 21 memo from regional vice president Susan Koziol to her superiors in Miami recapped her meeting with the company's local attorney. Koziol warned that, in the attorney's opinion, "The Chicago media at-large is uniformly unfair, dishonest, and in search of 'news' that will increase readership. It is difficult to fight the press when they think they have a story."

Koziol also addressed HCI's options in dealing with the former employee suspected of leaking the internal documents to the Tribune. "Tortus [sic] behavior has not been evidenced by the former employee which would cause interrupted business opportunities or discontinued business operations," Koziol wrote in describing the attorney's comments. "Therefore no legal action can be supported other than to legally harass the former employee, if the corporation should desire, understanding no damages could be secured."

By August 23, when it was clear the Tribune was preparing a potentially embarrassing story, HCI dispatched two of its key executives to Chicago with a different sort of mission: damage control.

Esther Colliflower and Don Gaetz arrived sometime after 8:00 p.m. and went directly to the Chicago HCI office, where the region's top officials were waiting. "It also happened to be my first wedding anniversary, so I'll never forget the date," says Mark Singer, who at the time was general manager for HCI's hospice in Lombard, a suburb of Chicago. "Don and Esther had just flown in, and from about eight or nine o'clock at night until nearly one in the morning we all met in the board room of the Lombard office."

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Jim DeFede
Contact: Jim DeFede