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Forbes Regional Hospital doctors fear staff cutbacks

| Friday, Oct. 12, 2012, 12:09 a.m.
Jack Isherwood, chair of West Penn Allegheny Health System board of directors speaks at a press conference announcing the system's move from an affiliation agreement with Highmark Friday September 28, 2012 at the health system's offices on the North Side. James Knox | Tribune-Review
New Highmark CEO William Winkenwerder, Jr. talks to Pittsburgh Tribune-Review reporters and editors Tuesday, June 5, 2012. Jasmine Goldband | Tribune-Review

Physician discontent at West Penn Allegheny Health System escalated on Thursday as 14 doctor leaders from Forbes Regional Hospital in Monroeville expressed concern about recent changes implemented by the system's interim management.

Separately, the president of Allegheny Valley Hospital's medical staff urged West Penn Allegheny to consider appointing to its board physician representatives from each of the system's five hospitals.

As the physician insurrection grows, officials at West Penn Allegheny and Highmark Inc. remain far apart on repairing their collapsing affiliation agreement, which unraveled Sept. 28 when the health system accused the health insurer of breaching the agreement by demanding bankruptcy.

Despite public statements from both parties that they are willing to return to the bargaining table – and notwithstanding a seemingly conciliatory phone call from West Penn Allegheny Chairman Jack Isherwood to Highmark CEO William Winkenwerder this week – the two sides remain at an impasse. No formal meetings have been scheduled.

West Penn Allegheny spokeswoman Kelly Sorice said the system has no plans to withdraw the breach of contract claim.

“We have to preserve our ability to be able to shop,” Sorice said, referring to the system's ability to court other suitors. There have been no meetings with other organizations about partnerships. “I can tell you there is interest from other organizations.”

However, West Penn Allegheny told bond holders on Thursday that it won't talk to any potential buyers until after an Oct. 25-26 court hearing on Highmark's request for a restraining order on the breach of contract complaint.

Highmark, for its part, is not backing out of its previously stated stance that West Penn Allegheny must disavow the breach of contract claim before the parties can meet again. Spokesman Michael Weinstein would not say if Winkenwerder responded to Isherwood's invitation to meet.

The longer the stalemate lasts, the more precarious the health system's financial situation becomes as doctors consider fleeing West Penn Allegheny.

“Time is our enemy,” said an Allegheny General Hospital physician leader who asked for anonymity for fear of retaliation. “Two weeks have gone by and those two weeks have cost us a lot.”

UPMC announced it hired four prominent orthopedic surgeons from West Penn Allegheny. Drs. Mark Baratz, Alan Klein, Christopher Schmidt and Dean Sotereanos, will start working at UPMC on Jan. 1, officials said.

The letter from the Forbes doctors was emailed to Isherwood on Wednesday.

“The medical staff at Forbes Regional Hospital is dismayed regarding the recent change in leadership and reporting structure that may affect the operations of Forbes regional Hospital,” said the letter, a copy of which was obtained by the Tribune-Review.

The doctors accuse West Penn Allegheny's interim management team, including CEO Dr. Keith Ghezzi, of “poor judgment” after they reduced the responsibilities of Forbes President Reese Jackson. They fear the move is a prelude to more cuts in staff and services that will eventually affect patient care. The doctors said Jackson has rightfully guided Forbes at a time of intense competition from rival UPMC East, which opened this summer less than a mile away.

In a letter to Isherwood and Ghezzi dated Oct. 10, Allegheny Valley Hospital medical staff president Dr. John Balacko suggested that doctors from the system's smaller hospitals -- Allegheny Valley, Forbes, Canonsburg and West Penn -- be part of the system's board of directors.

Balacko wrote that “the concerns and issues of community hospitals can differ significantly from that of a tertiary or academic institution” like Allegheny General Hospital, which has four doctor representatives on the West Penn Allegheny board. “...Representation from each unique institution would provide valuable and diverse insight to the board,” he wrote.

The Trib reported Wednesday top leaders from West Penn Allegheny's medical and surgical departments sent Isherwood a letter demanding that the board restart negotiations with Highmark. The doctors also want the board to fire Ghezzi and the consulting firm Alvarez & Marsal.

Isherwood and Ghezzi were unavailable for interviews, Sorice said. She said Isherwood plans to meet with physicians next week to discuss their concerns. She confirmed that Isherwood received the initial letter from systemwide physician leaders but not those from Forbes and Allegheny Valley doctors.

Sorice said she was not aware of any plans to remove Ghezzi or any of the consultants who have been working at West Penn Allegheny since November. System officials have refused to say how much they are paying the consultants, amid claims from physicians that the consultants are milking the system for what little cash it has left.

The company Ghezzi works for, Alvarez & Marsal, is known as a turnaround specialist. The company gained prominence for its work to save HealthSouth, a Birmingham, Ala.-chain of rehabilitation hospitals that landed in Chapter 11 bankruptcy court in 2003. HealthSouth reported net income of $182.7 million last year.

“We come to companies at their worst moments in life, and we save them,” co-founder Antonio Alvarez II told BusinessWeek in 2004.

Alvarez & Marsal also led St. Vincent Catholic Medical Centers through a Chapter 11 bankruptcy that started in 2005. The New York-based health system emerged from bankruptcy in 2007 after selling or closing seven hospitals. Three years later, it was back in bankruptcy court and this summer it closed.

Before joining Alvarez & Marsal, Ghezzi had his own health care consulting firm, which was hired by Forum Health, a three-hospital network in Youngstown and Warren, Ohio. Ghezzi, who was interim CEO of the system from 2006 to 2008, reduced the system's costs and sold off some assets to improve its finances.

In 2009, about a year after Ghezzi left, Forum Health entered bankruptcy protection. It was acquired in 2010 by for-profit Community Health Systems of Tennessee.

Luis Fábregas is a staff writer for Trib Total Media. He can be reached at 412-320-7998 or Alex Nixon is a staff writer for Trib Total Media. He can be reached at 412-320-7928 or

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