New head of embattled Hennepin County Medical Center couldn’t have picked a worse time to begin

Arthur Gonzalez comes to Minneapolis next month to run the Hennepin County Medical Center at a tough time for Minnesota hospitals, which already face state budget cuts, a tough economy and the slashing of General Assistance Medical Care money.

Now today, hospitals face the political uncertainty of further losses from Gov. Tim Pawlenty’s potential unallotment of additional health funds that could lead to possible job cuts. The governor will release the first details of his planned actions this afternoon.

But Gonzalez knows about tough times, and he’s giving up a nice monthly settlement sum to start the HCMC job July 1.

In December, he was removed unceremoniously from his previous job as chief executive of the Tri-City Health Care District when a newly elected board took control of the Oceanside, Calif., medical facility, north of San Diego.

Following an investigation that has never been made public, he was given a settlement in April that could have paid him nearly $1 million in pay and benefits. He was awarded $125,000 upfront and monthly payments of $41,250 for up to 18 months, or until he gets a new job. So by taking the Minnesota job, he’s leaving hundreds of thousands of dollars from the settlement on the table.

Gonzalez, 58, will earn $490,000 a year at HCMC, just a bit more than the $483,000 he made in California at Tri-City, which has 397 hospital beds and discharged 17,379 patients last year. HCMC is a bit bigger, with 465 beds, and ad 22,937 patient discharges in 2008.

Double due diligence
Hennepin County officials say they were well aware of the California tumult before hiring Gonzalez.

Mark Bernhardson, chair of the HCMC board (and Bloomington city manager) said the California flap began when Gonzalez was in Minnesota interviewing for the job to replace former HCMC CEO Lynn Abrahamsen, who is retiring.

Dr. Arthur Gonzalez

Courtesy of the Vista Chamber of Commerce
Dr. Arthur Gonzalez

According to Bernhardson and others, an elected board runs the Tri-City medical center, and after the last election, a minority group on the board that had been unhappy with the center’s direction became the majority.

Apparently, they decided to flex their new political muscle, and four of them voted to place nine top administrators, including top exec Gonzalez, on paid leave.

Hennepin County was close to inking a deal with Gonzalez after a year-long, nationwide search but, because of the California news, slowed the process.

“We decided to take a step back,” Bernhardson said. “We realized it might take a while to sort out, so we continued his candidacy, but also went back and did more due diligence with his prior employers. There were no issues, by the way.

“And we also looked again at other candidates, in case the California business didn’t sort itself out in a timely way.”

The Tri-City board launched an investigation, which the San Diego Union-Tribune called “an ill-defined investigation into finances and employee relations at Tri-City Medical Center.”

That investigation apparently hasn’t been made public because it “references personnel matters,” says the North County Times.

Gonzalez sued the Tri-City board and, according to his lawyer, was “very pleased” with the April settlement.

Meanwhile, the Hennepin County job search continued, and after the second round of background checks, Gonzalez was offered the job.

Among those on the search committee that selected Gonzalez were Bernhardson; Anita Pampusch, former president of both the College of St. Catherine and the Bush Foundation; former Minneapolis Mayor Sharon Sayles Belton; and Hennepin County Commissioner Randy Johnson.

A classy guy
Randy Johnson, longtime Republican county commissioner, said he’s pleased Gonzalez accepted the job.

“We thoroughly reviewed his background, and then when the brouhaha came out over the Tri-City hospital governance, we vetted him even further. Through the whole process, he was outstanding, a very classy guy,” Johnson said Monday. “He has impeccable credentials, impeccable integrity, and he’s probably the most thoroughly vetted person that I ever hired in 31 years at Hennepin County.”

Gonzalez couldn’t be reached Monday, but when he was hired he said in a statement that the medical center “is fortunate to have a sophisticated governing board and the strong support of Hennepin County. I believe (Hennepin) has the foundation to face the current challenges and thrive in the future.”

Critics in California blamed him for Tri-City’s three failed bond initiatives, bonuses for executives that some considered excessive and a debt-refinancing program that became costly after the collapse of auction-rate securities markets last year.

But Bernhardson said the attractive settlement offered to Gonzalez says much about the situation.

“The settlement [from the Tri-City board] was more generous than his severance would have been,” Bernhardson said. “And if that investigation had produced anything against him, you can bet they’ve have made that front and center, saying ‘Told you so.’

“But they kept the investigation private … and you really never see a generous settlement with someone you think is culpable.”

Bernhardson said Gonzalez loves challenges and is the right person to lead HCMC in some uncertain times.

Tri-City had a huge deficit when he arrived 10 years ago, but has been generating big surpluses in recent years, according to news reports.

In addition to Tri-City, Gonzalez has served as the chief executive officer of Schumpert Health System in Shreveport, La.; St. Joseph Hospital in Fort Worth, Texas; and Kino Community Hospital in Tucson, Ariz. During 17 years with Hospital Corp. of America, Gonzalez served in various administrative roles at several Texas hospitals.

He still took the job
Bernhardson said the HCMC situation wasn’t as dire when the hospital was courting Gonzalez. Recent cuts — and the prospect of more — led retiring CEO Abrahamsen to speculate that the hospital might have to start turning away non-emergency patients who come from outside the county.

“Things weren’t really this bad when we first talked to him, and he still took the job,” Bernhardson said.  “We’re glad he still accepted.”

Joe Kimball reports on St. Paul City Hall, Ramsey County politics and other topics. He can be reached at jkimball [at] minnpost [dot] com.

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Comments (1)

  1. Submitted by Tim Bonham on 06/17/2009 - 12:01 am.

    He gets $490,000 per year. HCMC has 22,937 patients per year.

    So he gets paid $21.36 for every single patient who comes to the hospital during the year.

    No wonder our medical system is so expensive!

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