Employees travel widely on hospital gifts Workers at the psychiatric hospital take fancy trips with money from drug makers, medical schools Michael Biesecker, Staff Writer
RALEIGH - Employees at a troubled state mental hospital in Goldsboro used money from drug companies and foreign medical schools to visit destinations such as Hawaii and Hungary.
In less than four years, administrators at Cherry Hospital approved more than $139,851 in spending for overnight travel to more than 100 medical conferences and professional events, including at least 48 trips to other states or overseas.
Using both state revenue and money from a nonprofit foundation created to benefit the hospital's patients, employees have spent an additional $215,650 since 2005 on fundraisers, catered meals for hospital staff, and an annual retreat at a Wrightsville Beach resort.
The director of Cherry Hospital, Jack St. Clair, said the spending through the hospital's Continuing Medical Education program is essential to attract and retain qualified professionals who could earn higher salaries in private jobs.
"We're in a highly competitive, highly demanding market in the world of medicine as it relates to the psychiatric world," St. Clair said.
Though at least five other state-run mental institutions in North Carolina have similar accounts used for medical education and recruitment efforts, Cherry raised and spent at least eight times the other institutions' combined totals on employee travel.
Dempsey Benton, secretary for the state Department of Health and Human Services, said Friday that oversight of such spending has been inadequate.
"Steps have been taken to better monitor and utilize these monies to include patient care and needs," Benton said in a written statement.
Federal officials withdrew Medicare and Medicaid funding from Cherry Hospital last month after the death of a patient who choked on his medication, hit his head and was then left sitting in a chair for 22 hours. It was the latest in a string of instances of patient neglect and abuse at the hospital.
The money for the employees' excursions came from two checking accounts controlled by managers who are also the hospital's most frequent travelers: Dr. Kimberly Johnson, the clinical director; and Judy Howell, an administrative assistant who coordinates Cherry's medical education program.
Johnson and Howell each attended a dozen conferences in the last three years, visiting such cities as New York, Chicago, Boston, Washington, San Diego, San Francisco and Toronto.
The pair often traveled together and stayed in upscale accommodations. An example is a two-bedroom, two-bath condo they rented at the Scottsdale Links Resort, a luxury spa next to a renowned golf course in Arizona. They were accompanied by Phyllis Neal, Johnson's administrative secretary and then reigning champ of Cherry's annual golf tournament.
The four-day trip to an annual meeting of the Alliance for Continuing Medical Education cost at least $4,364.
Johnson, Howell and Neal were not available for comment, according to a departmental spokesman. All requests for interviews were referred to St. Clair, who said conferences in the medical field are usually at expensive locations.
"You're not going to go to a national conference involving the clinical world of the disciplines that we deal with and have your conference at Tom Bodett's Motel 6," he said. "That's one of the attractions they use to bring people from all over the country, and sometimes internationally. There are some perks that come with that."
Getting trips approved
St. Clair said he had not taken any trips out of state, but as Johnson's direct supervisor he signed off on most of her expenses. Johnson, the hospital's top medical doctor, approved expense requests for Howell and others.
Before Johnson, Howell and two others made a $6,920 trip to Orlando earlier this year, they signed out $500 cash advances to themselves.
Other trips included one for a physician assistant who spent three days at Walt Disney World's Polynesian Resort for a conference titled "Dermatology for the Non-Dermatologist."
Two Cherry psychiatrists went to Budapest, Hungary, while a food service director and dietitian went to Honolulu.
The hospital spent at least $10,000 in May to send seven employees, including Johnson and Howell, to a meeting of the American Psychiatric Association in Washington.
St. Clair said the large contingent, which included employees with no medical credentials, was needed to staff long hours at the hospital's recruiting booth.
The hospital spent an additional $2,855 on banners featuring the hospital's logo, carpet, tablecloths, a table and a stool for the booth. Another $8,429 was spent last spring on Cherry Hospital embossed pens, key caddies, Frisbees and bags.
St. Clair said he could not name a Cherry Hospital doctor who was recruited at such an event.
"It's a work in progress," he said. "We're learning as we go."
Cherry has gone to great lengths to attract doctors. Of the 19 physicians on staff at the hospital, 12 are graduates of foreign medical schools in such distant locales as Addis Ababa, Ethiopia, and Chittagong, Bangladesh. Several of the psychiatrists are not board-certified, and the hospital is paying tuition and fees for them to further their educations.
Money from Caribbean
Most of the travel for Cherry employees was paid through an account called the Preceptor Fund, which receives about $125,000 a year paid to the hospital by six medical schools in the Caribbean. In exchange, the hospital hosts medical students who earn academic credit by doing rotations at Cherry.
Hospital employees who spend state time teaching the students, who number about 100 per year, are rewarded with annual allowances to pay for trips to medical conferences of their choice.
Most trips paid for through the Preceptor account were reviewed and approved in advance by the DHHS finance office.
"I want to go too!" wrote a reviewer in e-mail approving a May 2005 trip for a conference in Orlando. "Doctors certainly know how to select conference venues!"
The director of the state system of mental hospitals, Jim Osberg, ordered last month that spending from the Preceptor account be suspended after an article in The News & Observer detailed a hospital nurse's $5,000 trip to South Africa to learn about AIDS.
But as that account was frozen, employees continued spending from an account of the Cherry Hospital Foundation, a nonprofit corporation chartered by hospital employees in 1997 for assisting the mentally ill of Eastern North Carolina.
Tax returns and financial records for the foundation show that of the $166,781 it raised from 2004 to 2007, more than 90 percent was spent on medical seminars and conferences.
Grants spent on travel
Much of the money came through donations and grants hospital employees solicited from private companies that manufacture or distribute psychiatric drugs, including companies that have lucrative contracts to supply the state hospital system.
Correspondence sometimes included with the checks showed the companies saw a connection between their grants and their relationship with the hospital's staff.
"Eli Lilly and Company appreciates your support of our vision to deliver innovative medicines that enable people to live longer, healthier and more active lives," the company's chief grants officer wrote to Cherry Hospital's Howell, enclosing a $5,000 check. Lilly makes the antidepressant Prozac.
"We appreciate your dedication to the healthcare community, your patients and your professional relationship with Forest Pharmaceutical," said a letter from the makers of Lexapro, another antidepressant, with a $2,500 check.
St. Clair said the drug companies paying for his doctors' trips had no influence on whether those doctors then prescribed the drugs those companies sell.
"If it happens to be a drug that is more popular, more efficacious to treat the doctor's patient who has bipolar disorder or schizophrenia, so be it," St. Clair said. "Me and every other hospital in the state of North Carolina, and probably the country, tries to position themselves to try to be competitive for those grants. ... I'm after the money because I think it could benefit my staff through further education."
It is against state law for government employees to accept payments or gifts from companies profiting from state business.
By cycling the corporate money through its nonprofit foundation and then to the employees for travel, the state hospital may have found a loophole.
"The state's statutes of that kind are pretty hit-and-miss, and they're not comprehensive," said David M. Lawrence, a professor of public policy at the UNC School of Government in Chapel Hill. "I don't think it violates the statute."
The practice, though common at some private facilities, is the subject of intense debate within the medical field.
"It is considered inappropriate for pharmaceutical companies to be paying for travel for doctors," said Dr. Ross McKinney Jr., a Duke University professor of medicine and director of the Trent Center for Bioethics. "It's being done systematically because the companies know they will get prescriptions in return."
In August, Cherry Hospital held its 12th annual Eastern Mental Health Symposium at the Holiday Inn SunSpree Resort at Wrightsville Beach. The event's program, distributed to all attendees, offered a "special thank you" to nine pharmaceutical companies credited with underwriting many of the expenses.
The event happened to be scheduled for the weekend after federal regulators told Cherry officials they were considering sanctions over such issues as staffing deficiencies. Still, the bulk of the hospital's administrators and doctors left town for the annual symposium.
St. Clair said he took work with him to his hotel room, including a draft of the hospital's required plan to show the feds how it would correct the problems. The regulators later cited Cherry with numerous violations and removed the hospital's accreditation to receive Medicare and Medicaid money.
Asked if he should have canceled the event, St. Clair bristled.
"I work my [butt] off for Cherry Hospital and so do a lot of the department heads," St. Clair said. "We've got a lot of hard-working folks down there and I do resent the fact that a lot of people might get the impression I'm down there playing, having a good time."
The loss of federal money is expected to cost North Carolina taxpayers more than $800,000 a month. But don't expect that to stop Cherry's employees from traveling.
The hospital has prepaid more than $8,000 in registration fees and airline tickets for conferences later this month in Minneapolis and San Diego.
Johnson and Howell are among those scheduled to go.
(News researcher David Raynor contributed to this report.)
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