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A Freestanding Fight

The excitable Steven Berrard, at right, grimaces while sitting next to hospital district lawyer William Scherer at last month's board meeting
Colby Katz

The good doctor phoned me a couple of weeks ago after reading a column I wrote about the corrupt depths of a North Broward Hospital District building deal. He says he didn't want his name in print because district leaders would try to destroy him for saying his piece.

"I call the [district] the health care mafia," the doctor says. "It's one scam after another. Everything is a political contribution or a land deal."

Then he advised that I contact a few other physicians, including Dr. Benjamin Barnea, Coral Springs Medical Center's chief of staff. So I did, half expecting Barnea, who routinely reports to the Gov. Jeb Bush- appointed NBHD board, to ignore me. But he called me back. And he spoke. On the record.

"I don't understand how a public, tax-dollar-supported district that generates revenues of $800 million is totally unaccountable to the taxpayers," he says. "It's set up to support nefarious deals. I find this an aberration to the democratic process. It's taxation without representation."

Beautiful to hear: someone in power with some real courage. Check that. Barnea, who oversees the doctors at a 200-bed hospital and has spent 16 years practicing medicine in Broward County, should have some power in the district, but he doesn't. Political and business interests dominate the NBHD at the expense of actual health care. District leaders generally treat doctors as a nuisance. After all, they might let medical concerns or common sense get in the way of the high-stakes Monopoly game.

But Barnea says he's determined to change things, which some might see as a quixotic adventure at best. The district is a mammoth political and business machine, the fourth largest public hospital system in the United States, overseeing four public hospitals, several clinics, and a $720 million budget. Yet, even though it rakes in nearly $160 million in property taxes, it's in such bad financial shape that district officials are afraid it will lose its bond rating. And it's crooked from one end to the other, as was illustrated by the recent federal embezzlement conviction of its former CFO, Patricia Mahaney, and the aforementioned medical office building deal (see "Bad Operation," November 6, and "MOB Rules," November 27).

Though Barnea finds the office-building project to be "amazing," and not in a good way, he's most concerned about another NBHD venture, a freestanding emergency room planned for Sunrise on 14 acres of district-owned land at Pine Island Road and Commercial Boulevard. After commissioners approved the project, NBHD began final negotiations with a group called Strata Medical Services. The group's partners include two former district employees and a fellow who did five years' probation on a grand theft charge, but I'm saving that later in the article.

NBHD intends to sell the land to Strata for $5.5 million. One might question that price, especially since a bidder offered $5.7 million for it back in 2000, before a land boom raised most Broward land prices 50 to 100 percent. But hell, just to keep things moving, let's pretend it's a dandy deal.

After acquiring the land, Strata will build a medical complex that includes the emergency room. The district will pay the company $940,000 annually for the next 25 years to lease the facility. There will be no hospital attached, no intensive care units, no operating room, just a place where relatively minor injuries can be treated.

The district expects to lose money the first couple of years, then make a profit. But NBHD officials contend it won't lose more than a million dollars. If history tells us anything, that couldn't be further from the truth. Just remember Cambridge and Weston, two district clinics that recently lost millions.

But it's not so much the particulars of the deal as the big picture that bothers Barnea. For one thing, there is no real need for a glorified first-aid station in that area, which is serviced by two private hospitals; University Hospital is 2.67 miles away, and the Florida Medical Center, precisely five miles away. These hospitals aren't mentioned in the "justification" section of the district's staff prospectus on the deal that was given to the board in September. Nor is Westside Regional on Broward Boulevard, which also serves parts of Sunrise and is just over five miles from the planned new ER.

Of the expected 5,000 patients taken there each year, 20 percent -- or about 1,000 -- will need to be admitted to an actual hospital, according to the district. Those unfortunates will be sent to Barnea's facility in Coral Springs, which is 6.5 miles away and already burdened with too many patients for too few doctors, the chief of staff says.

"How do you serve citizens by dumping them in an ambulance and sending them to Coral Springs?" Barnea asks. "This project makes no medical sense."

 

Indeed, the concept itself is so controversial that such facilities are extremely rare. In California, they were outlawed by the legislature.

The district never briefed Barnea -- or any other medical leader -- about the project or its impact on his hospital. He just happened to find out about it at the September 24 board meeting. So he took the podium. "We need to think this through," he told the board. "How is it going to look that we are transporting people with a fleet of ambulances up to Coral Springs -- and bypassing other emergency rooms that are much closer because we wanted to bring them to our sister hospital -- and along the way the patient deteriorates and dies in the ambulance?"

Instead of answering his questions, Commissioner Steven Berrard seemed personally stung by Barnea's complaints. He told the doctor that he should have brought his concerns to the administration first and that he found the criticism "revolting."

Barnea countered: "When I discover this just now and I find the board is going to have a final vote soon, I wish to state my thoughts so commissioners can think about this. If I didn't come forward, then I wonder if anyone else would."

"OK, now you are impugning the integrity of all of us and what we do," Berrard said caustically. "If you want to go down that path, that's fine."

"Not at all. I'm giving you my point of view as a physician... As a commissioner, I'd think you'd want to hear my opinions."

That was basically the end of discussion. The board unanimously approved entering into final negotiations with Strata.

Berrard, of course, knows what he's talking about when it comes to health care. He has sold videos and used cars, after all. For years, Berrard rode a wave of success as billionaire H. Wayne Huizenga's sidekick, running Blockbuster and AutoNation. In 1999, he went off on his own to create a conglomerate of flower shops, like Blockbuster with violets instead of videos. The venture was bankrupt and out of business by late 2002, with investors losing millions. Huizenga's number two went from boy wonder to boy blunder. But he's still sitting on the board, where he was appointed two years ago by Bush, to whom Berrard and his former boss have given thousands of dollars in campaign cash.

Berrard, who didn't return my phone call, and the rest of the board may not have been listening to Barnea at the September meeting, but somebody was. On October 17, the Coral Springs chief of staff received an anonymous package in the mail postmarked from Tampa. In it were documents showing that 52-year-old Russell E. McKinnon, listed as a "principal" of Strata, had been arrested in Pinellas County.

The January 31, 1992, edition of the St. Petersburg Times published this account of McKinnon's alleged crime: "A Treasure Island securities broker was arrested Thursday and charged with soliciting $20,000 from a client... [McKinnon] solicited the money from a Largo resident, saying he could invest the money in a business that promised high yield with few risks. Instead... McKinnon deposited the money in a personal account and used it to buy gifts, deputies said. He was charged with grand theft/investment fraud." McKinnon pleaded no contest and was sentenced in 1992 to five years' probation, which he successfully completed in 1997. The judge withheld adjudication, says his attorney, Jay Hurley. The National Association of Securities Dealers banned him from trading and forced him to pay restitution to the victim, according to the Regulation Intelligence Agency, an oversight group. (The NASD has no record of the banning or restitution.)

Doesn't really seem quite like the type of guy that the district should be doing business with, does it? And the fact that two other Strata principals -- Archie Blair and Gordon Myers -- are former NBHD officials gives the deal an aroma not unlike that of killing night at a sausage factory.

Barnea forwarded this information up the line to district CEO Wil Trower, who refused to comment for this column. McKinnon returned my call, though, and when I asked him about his criminal record, he paused before saying he wouldn't say anything. I asked him if district officials had questioned him about the matter, and he said they hadn't.

Then he referred me to Strata President Charles Rollinson, who serves as a director with Myers of a Plantation-based development company called Lear Associates. "Russ had a small incident happen [many] years ago, and it was expunged, and the records were sealed," Rollinson said, adding that his company was intent on finding the anonymous source of the information. "It's upsetting, because Russ is a phenomenal man and has a reputation as one of the best COOs in the country."

 

Rollinson refused to discuss the details of the project, though he did contend that Barnea is "misinformed -- and that's why he was shushed at that meeting."

So that's what Berrard was doing -- shushing the doctor. It may have worked in September, but Barnea says he'll keep trying to reform the district. He wants the legislature to look at the system and either have the commissioners elected rather than appointed or create a citizen-oversight committee to police the board.

"Whatever was done back when they established this district, it needs to be revised where the system has built-in accountability for their actions, directly to the voters," Barnea says. "Because right now, the system is designed to back up nefarious dealings."

Harsh diagnosis, but dead on the mark.


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