Four years ago this month, a personnel shakeup at River Valley Hospital verified rumors of serious financial problems and awakened residents to the idea that the hospital may be too ill to stay afloat in a sea of red ink.

In the shakeup, then-Chief Executive Officer Terry Vanderhoof was fired and eventually the entire hospital board resigned. Local, state and federal government officials and area business leaders met to determine the scope of the problem, and to see what, if anything, could be done to rectify the situation.

What they found was, in the words of many, a system of mismanagement that sapped the hospital’s resources and left it with staggering debt. Some in the community have contended that one or more people committed crimes that led to the downfall of the county’s only hospital.

This has never been proven and no one has ever been charged with a crime. Others contend hospital management acted negligently or were simply asleep at the wheel. They cite numerous examples of mismanagement, among them: poor spending and a lack of vision about where the hospital should be going in the future.

Green acres

In 1997, the U.S. Congress approved the Balanced Budget Act, which, among other things, restructured and restricted Medicaid payments to hospitals and health care providers across the nation.

The BBA went into effect in 1998, and former River Valley Health Systems Chief Executive Officer Terry Vanderhoof later blamed the BBA on the hospital’s financial constraints.

Yet at the same time the hospital was bleeding financially, management was buying property and planning new ventures, rather than scaling back and cutting costs.

In September 1999, the hospital purchased a house at 1410 S. Sixth Street, ostensibly as doctor’s office space — at a time when doctors were leaving, not coming, to the facility.

In the audit for 1998, auditors with the firm of Hayflich and Steinberg in Huntington, W.Va., noted significant financial problems and in the audit for 1999 auditors stated that there was &uot;significant deterioration in the results of the operations during the year&uot; and &uot;substantial doubts about the hospital’s ability to continue as a going concern.&uot;

In February 2000 — the same year an audit was released showing the hospital’s future was dubious at best — management purchased property in Wheelersburg for a new clinic there, and took out a $300,000 mortgage to pay for it. This was at a time when patient census had fallen into lower double digits, below the mark administrators felt was the &uot;break-even point.&uot;

Long-time board member Robert Griffith defended such land purchases.

He said the property was financed and the hospital was able to afford the debt service.

&uot;You’ve got to look down the road if the hospital is going to expand,&uot; Griffith said. He said board members did what they thought was in the best interest of the hospital when they made such decisions.

&uot;We run a good board,&uot; he said. &uot;We had a good hospital and good members serving with us, I think. I think the board did a good job.&uot;

Another project discussed in the latter stages of the hospital’s tenure was a

proposed fitness center planned for a plot of land near the U.S. 52/State Route 141 exchange. The land was bought in 1998 and mortgaged

for $67,136

but the fitness center was never built. Plans were even drawn up to build it.

This venture was discussed at a time , one might presume, when hospital officials should have known they were losing money — 1999 was the same year the hospital posted a $3.9 million deficit. Even though the fitness center would have been paid for by Farmers Home Administration funds, some within the community contend that concentration perhaps should have gone to making the hospital more profitable and to stemming the flow of red ink instead of looking for new ventures and land deals.

&uot;They were trying to do something good for the community,&uot; Dingus said. &uot;But it was not good for the bottom line, and at a time when revenues were so bad.&uot;

Former Ironton-Lawrence County Community Action Organization CEO Keith Molihan said hospital administrators had a long history of making unwise land deals, playing the part of big shots without having the big bank account to go with their big aspirations.

&uot;They tried to be all things to all people. They tried to compete with regional hospitals and it was stupid to do that,&uot; Molihan said. &uot;They didn’t have the facilities, the specialized equipment, the client base.

&uot;I still say the biggest problem was that they wanted to expand and buy and compete with the bigger hospitals without any consideration of the real needs of the community. There were so many egos involved,&uot; Molihan said. &uot;When I saw they had bought (more) property, I’d chuckle.&uot;

Molihan also questioned the need to put specialized equipment in each of the hospital’s outpost clinics.

For instance, hospital management put an X-ray machine in one of the hospital’s rural clinics.

&uot;We didn’t put any X-Ray equipment in our (CAO) clinics,&uot; Molihan said. &uot;No labs, because the hospital had labs.&uot;

Attempts to contact Vanderhoof have proven unsuccessful.

Mine, yours and ours

Some within the community contend that hospital officials used the hospital as their own employment service, securing jobs for family members and friends, regardless of whether the people they wanted hired were qualified for the jobs they were ultimately given.

&uot;It was family, they employed family,&uot; former employee Darlene Elliott said.

&uot;It had the good ole’ boy system and that’s how you kept your job.&uot;

Former employee Ramona Schweikart agreed, saying board members often came to management and wanted friends and family hired.

Schweikart

said an ongoing conflict existed between various board members and hospital administration, both when the administrators were local and when they were part of a management company brought in to run the hospital, such as the outfit that ran the facility in the mid- to late-1980s.

&uot;While I was there, the board would not let go of the control,&uot; Schweikart said. &uot;We were paying all this money to (them to) manage it and they got friction from all sides.&uot;

Schweikart said the outside management officials would propose changes they thought would improve the hospital, and some members of the board would reject the ideas.

&uot;They were not allowed to do what they were hired to do,&uot; she said.

Former executive director of the Greater Lawrence County Chamber of Commerce Pat Clonch said she disagreed with the board’s decision to end its association with a management team and hire local management. &uot;If we had retained the professional management company, this (the hospital’s closure) would not have happened. … We had tried that a local administrator as opposed to an outside company previously and had a lot of problems.&uot;

Clonch said the local team may not have had the expertise to operate a health care facility of that size and lead it forward during changing times.

&uot;There was no effort to bring a team together. They were without an OB/GYN for a significant time. A professional administrator would have never let it reach that point. They would have sought out younger physicians before the existing ones reached retirement age.&uot;

Schweikart said when she worked there in the late 1980s she heard rumors then that the hospital was in poor financial condition.

One comment often made about demise of the hospital is how those involved with the hospital appear to have mingled their personal business with that of the hospital and its operation. For example, Griffith, who served on the hospital board of trustees for many years, owned companies that did business with the hospital: Sureway Cab Co. and Erin Courier Service. Both businesses were listed as creditors when the hospital closed its doors.

Griffith defended both business relationships, saying the hospital had little choice but use the services of both businesses.

&uot;Lady, Sureway is the only cab company in town and the other, it was bid with other companies,&uot; he said.

And allegations of excessive spending was not exclusive to big-ticket items.

Meals and ambience

Even until the end — literally — hospital administration tried hard to impress the community leaders and board members with how well things were going, even though many knew otherwise.

Clonch recalled that when she was appointed to the board in the final days of the hospital’s life, management continued to roll out a red carpet. She recounted a conversation that she had with fellow newly appointed board member Dick Craig as they were entering the hospital for that first fateful board meeting after the new board was appointed.

&uot;Dick Craig said, ‘Patty you are going to die. They have the most beautiful china laid out for us.’ They served chicken and different kinds of dessert Š this at the first board meeting where we were officially about to announce that the hospital was destitute,&uot; Clonch said.

Another example of questionable spending at the worst possible time was the purchase of artwork for the new section of the hospital.

&uot;They had a lot of artwork. There was a whole load of stuff. I even saw a lot of it stacked,&uot; she said.

&uot;It was in the new area, the area that had been added. I was shocked that they purchased all of it.&uot;

What now?

After the hospital closed, the Lawrence County Commission asked for a Federal Bureau of Investigation probe into what happened, and why. Although a federal audit of federal loans and grants was conducted, some in the community point out that a federal audit should have been only one part of a broader investigation into what happened to shut down a $40-million-a-year operation.

&uot;I don’t think most of them understood that the FBI was very limited in the scope of their investigation,&uot; Clonch said. … &uot;And once the settlement was done, the FBI laid down their guns and went home.&uot;

No local or state entities ever conducted an investigation into what, if anything, happened to other, non-federal funds at the facility or why the hospital administration may have failed at their duties.

Many questions, shattered dreams and an empty building are all that remain as a painful reminder of what was, and what could have been.