Charleston Area Medical Center plans to use money from its operating budget to pay a "substantial portion" of a recent $25 million verdict against the hospital, if courts uphold the decision, hospital executives told employees this week.
Charleston Area Medical Center plans to use money from its operating budget to pay a "substantial portion" of a recent $25 million verdict against the hospital, if courts uphold the decision, hospital executives told employees this week.
CAMC plans to ask a judge to reduce the verdict and grant a new trial, according to an e-mail sent from Chief Executive Officer David Ramsey and Chief Operating Officer Glenn Crotty. If unsuccessful, the hospital expects to appeal the case to the state Supreme Court.
"It's my understanding that this is going to have an adverse effect on the overall profitability of the hospital," said Richard Sinclair, president of the CAMC Board of Trustees.
Last week, a Kanawha County jury awarded Charleston surgeon Dr. R.E. Hamrick Jr. $5 million in compensatory damages and $20 million in punitive damages, finding that hospital executives smeared Hamrick's reputation and wrongfully revoked his privileges in a malpractice insurance dispute.
Hamrick sued the hospital in 2004 after hospital administrators pulled his privileges to perform surgeries at CAMC. Hamrick wanted to fund himself against medical malpractice with $1 million of his own money instead of going through a commercial insurance plan. CAMC officials balked at the plan.
On Tuesday, Sinclair declined to speculate on possible hospital spending cuts to make up for a $25 million loss. The hospital's insurance apparently won't cover the verdict, he said.
"It's got to come from somewhere," Sinclair said. "At this point it's premature to say what's going to happen, but I'd say everything would be on the table."
The hospital expected to add 180 employees this year after expanding CAMC General Hospital and completing CAMC Memorial Hospital's new five-floor Robert C. Byrd Ambulatory Building in Kanawha City. CAMC employees were expected to receive a 3.5 percent raise. CAMC projected a $640 million budget this year.
Hamrick's lawyer, Karen Miller, said Tuesday the surgeon believes the hospital executives' memo was designed to turn hospital employees against him. Miller said the hospital's insurance policy should cover the $25 million verdict.
"This is totally unbelievable," Miller said of the memo. "I am so mad. They are turning these people against him. There's no remorse for what they've done to the hospital and the community."
CAMC was expected to end last year with a $28 million profit, according to testimony at last week's trial.
Charleston Area Medical Center plans to use money from its operating budget to pay a "substantial portion" of a recent $25 million verdict against the hospital, if courts uphold the decision, hospital executives told employees this week.
CAMC plans to ask a judge to reduce the verdict and grant a new trial, according to an e-mail sent from Chief Executive Officer David Ramsey and Chief Operating Officer Glenn Crotty. If unsuccessful, the hospital expects to appeal the case to the state Supreme Court.
"It's my understanding that this is going to have an adverse effect on the overall profitability of the hospital," said Richard Sinclair, president of the CAMC Board of Trustees.
Last week, a Kanawha County jury awarded Charleston surgeon Dr. R.E. Hamrick Jr. $5 million in compensatory damages and $20 million in punitive damages, finding that hospital executives smeared Hamrick's reputation and wrongfully revoked his privileges in a malpractice insurance dispute.
Hamrick sued the hospital in 2004 after hospital administrators pulled his privileges to perform surgeries at CAMC. Hamrick wanted to fund himself against medical malpractice with $1 million of his own money instead of going through a commercial insurance plan. CAMC officials balked at the plan.
On Tuesday, Sinclair declined to speculate on possible hospital spending cuts to make up for a $25 million loss. The hospital's insurance apparently won't cover the verdict, he said.
"It's got to come from somewhere," Sinclair said. "At this point it's premature to say what's going to happen, but I'd say everything would be on the table."
The hospital expected to add 180 employees this year after expanding CAMC General Hospital and completing CAMC Memorial Hospital's new five-floor Robert C. Byrd Ambulatory Building in Kanawha City. CAMC employees were expected to receive a 3.5 percent raise. CAMC projected a $640 million budget this year.
Hamrick's lawyer, Karen Miller, said Tuesday the surgeon believes the hospital executives' memo was designed to turn hospital employees against him. Miller said the hospital's insurance policy should cover the $25 million verdict.
"This is totally unbelievable," Miller said of the memo. "I am so mad. They are turning these people against him. There's no remorse for what they've done to the hospital and the community."
CAMC was expected to end last year with a $28 million profit, according to testimony at last week's trial.
"The total of the [verdict] amount simply wipes out a lot of the profit for 2007," said Jonathan Cunitz, an expert witness who testified for Hamrick. "That's the punishment."
Cunitz, who has examined CAMC's financial statements, said Tuesday that the hospital has been "quite profitable" during the past four years. CAMC has $64 million in cash and equivalents - marketable securities and other liquid assets - on hand, Cunitz said.
"The issue is do they have the cash to pay it, and they do," Cunitz said. "They have plenty of cash."
Last week's verdict was the largest in recent memory against the hospital.
After hearing testimony for two weeks, jurors decided CAMC administrators engaged in "fraudulent, malicious and oppressive conduct" against Hamrick.
CAMC lawyers argued that hospital administrators "bent over backwards" to work with Hamrick when he set up a self-funded insurance plan - the first of its kind in the state. But Hamrick drew a line in the sand and refused to give executives more time to review the proposal, the lawyers said.
The vascular surgeon's right to practice was reinstated by a Supreme Court order four days after administrators revoked his privileges.
In the memo sent to CAMC employees Monday afternoon, Ramsey and Crotty said they were extremely disappointed by the $25 million verdict.
"Obviously, we are hopeful for the appeal process to provide some financial relief, but are preparing for the full amount of the original amount," the executives wrote.
They ended the note to hospital employees, saying, "As always, this is in no way a reflection of the wonderful work you do for our patients everyday. Thank you for your continued focus on our patients, families and community - which we know is what CMAC is all about."
To contact staff writer Eric Eyre, use e-mail or call 348-4869.
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