Former Kettering Health board member Phil Parker called for the health network to be more transparent with the public and for the board of directors to improve oversight in the wake of allegations of extravagant spending and abuse of charitable funds by hospital system officials.
“There’s going to have to be trust rebuilt in the system,” said Parker, who left the Kettering Health board of directors in the summer of 2022 at the end of his second term after six years on the board. He remains on the boards overseeing the network’s Soin Medical Center and Kettering Health Greene Memorial and retired in 2020 after 26 years as president and CEO of the Dayton Area Chamber of Commerce.
“Once we determine the issues and any of the recommendations to improve our governing structure it would be my hope that we would share that with not only the board and the employees, but also our community.”
Parker spoke exclusively to the Dayton Daily News about the allegations and the health network’s internal investigation.
Crisis management experts agreed with Parker that Kettering Health must communicate clearly with the public, patients, employees, donors and other stakeholders to rebuild trust.
“The thing you have to provide first and foremost is transparency,” said Lanier Holt, associate professor in the school of communication at Ohio State University. “If you’re transparent and open, people will be more inclined to believe you than to distrust you. Once they distrust you it’s almost impossible to get that trust back. They need to get out in front of this and tell the story.”
Kettering Health has refused to comment beyond a March 27 written statement that was the first public indication from the health system, operated by the non-profit Kettering Adventist Healthcare, that allegations had been made and an internal investigation was launched.
Kettering Health operates 15 medical centers and more than 120 outpatient locations throughout southwestern Ohio, as well as Kettering Health Medical Group, which includes more than 700 board-certified providers.
A complaint filed with Ohio Attorney General Dave Yost in February alleged improper spending by former CEO Fred Manchur, former Kettering Health Board Chair Dave Weigley and others. The allegations, made anonymously, involve spending on travel, automobiles and renovations to Manchur’s Kettering home.
Yost also received a complaint in August from former Kettering Health employee Lori Van Nostrand regarding Manchur’s expense reports, entertainment costs and decisions on buying property, among other issues.
Allegations of financial and administrative impropriety and nepotism were included in a 2021 anonymous letter signed “Concerned SDA Church Members and Friends of Kettering Health” and addressed to health network associates, Seventh-day Adventist Church officials and government officials.
Confidentiality rules prohibit the attorney general, who oversees charitable organizations, from confirming or denying the existence of an investigation, said Kelly May, spokeswoman for Yost.
Manchur retired Dec. 31, two months after Kettering Health announced he was taking a leave of absence before retiring. He did not respond to requests for comment.
Weigley stepped down as long-time board chair in January but remains president of the Columbia Union Conference of the Seventh-day Adventist Church, which sponsors Kettering Adventist Healthcare. He declined comment through conference spokeswoman Kelly Butler Coe.
Kettering Health also denied requests for comment from incoming CEO Michael Gentry, who is former chief operating officer at Sentara Healthcare in Norfolk, Va., and current Kettering Health Board Chair Celeste Ryan Blyden, the conference executive secretary who was named board chair by Weigley.
“After my term ended in the summer of 2022 the CEO and the chairman of the board ultimately stepped down. And this surprised me,” Parker said. “If there was any concern on their part I would have much rather had them stay and defend their position or the network’s.”
Kettering Health investigation
The March 27 Kettering Health statement said officials were aware of “allegations of inappropriate fiscal and operational management.” It said the board and leadership team took the allegations seriously and were committed to to “integrity, improvement, and upholding the trust of our staff, providers, and community.”
Amid the ongoing internal investigation, Kettering Health said steps were being taken to address any “wrongdoing and shortcomings” that were identified.
“These steps include making necessary personnel changes — inclusive of employees and members of the Board — to ensure both individual accountability and strict compliance with updated and comprehensive governance practices. Consistent with organizational policy, no specific personnel issues will be discussed,” the statement said.
The February complaint to Yost alleges abuse of charitable funds, but the Kettering Health statement said, “These allegations do not include funds received through donation to any one of the four Kettering Health foundations, and our internal investigation has confirmed this to be accurate. Our foundations have stringent polices to ensure that all donated funds are appropriately accounted for, used in line with the request of each donor, and in compliance with applicable laws.”
Kettering Health hired one outside firm, which Parker said is the law firm Taft, to do the internal investigation and a second to recommend updated processes and policies.
“Once the internal investigation was underway a number of board members were interviewed (by Taft) and I was one of them,” Parker said. “There were several issues that seem to have a common theme amongst those who were interviewed. Travel was an example.”
He said board members asked top administrators if funds were spent inappropriately.
“But many of us got feedback that said everything was budgeted and approved,” he said.
“I think the issue was if we asked about these items we were told they were budgeted and approved, and we let that be the answer. We let it go,” Parker added.
In retrospect, he said the Kettering Health board should have more closely scrutinized expenses and what they were being told by network officials.
“Going forward no matter what we discover about these issues our board must be more actively engaged in the governance of the network and the transparency of financial transactions,” Parker said. “So one of the things that’s going to have to be done in the future the board is going to have to have more oversight, ask more questions, have a much better understanding of the strategic issues.”
Crisis management experts weigh in
Parker knows a thing or two about crisis management.
In 1994, he took over as president and CEO of the Dayton Area Chamber of Commerce, which was then in the midst of a scandal over expense account fraud, some of it by officials at the publicly-funded convention and visitor’s bureau that the chamber ran at the time.
Three chamber officials were convicted of felonies and ordered to pay restitution and fines, and two others were sent to a diversion program in lieu of prosecution. All lost their chamber jobs.
The chamber’s president, who was not implicated in the scandal, had resigned in 1993, and respected community leaders, including a former Wright State University president and a Mead Corp. executive, were put into key positions.
“I stepped into a mess like this in 1994. It was one hell of a mess. So the only reason I say that is because I have a lot of sympathy for this new gentleman (Gentry), who I’ve never met.” Parker said.
When Parker took over the top chamber role he ordered updated financial statements and audits, improved financial controls, increased transparency with the public and chamber members and he reached out to a local business leader who got NCR to contribute money so the chamber could get through the year.
Parker said it took several years for the chamber to recover from the negative publicity of the scandal, but eventually it did, and it was named the Nation’s Best Chamber by the Association of Chambers of Commerce Executives in 1998-99.
Parker, who has served on about 50 boards during his time in the Dayton region, said there are lessons in that for Kettering Health.
“I’ve seen some boards much better at the transparency of how they conduct their operations. And I think (for) Kettering, it would behoove them to learn some lessons and work with these new board members, this new board and this new executive, this new CEO, on how they can best accomplish the transparency issue and the trust, the trust issue,” said Parker.
“I would hope that the attorney general would make recommendations on how to improve our governance structure.”
Parker emphasized that none of the allegations against Kettering Health are about the quality of health care.
“The quality has never been in question. Never,” Parker said. “Please understand that. Because if you walk away and you think, ‘Well, this affected quality?’ I don’t believe so.”
Maintaining that image as a quality health care system is going to be crucial going forward for Kettering Health, said Roy Lewicki, a professor emeritus of ethics and human resources at Ohio State University’s Max M. Fisher College of Business.
“They may be not giving further comment at the advice of lawyers, who are trying to make sure that nothing is said that could incriminate Kettering Health or anybody else,” Lewicki said. “But that doesn’t necessarily have to stop Kettering Health from doing other kinds of things that may promote a more positive image.”
He suggested the health system bring in a group of respected, trusted community members, in addition to the board, to work with leadership to make sure the hospital system is well operated, particularly on the financial side.
“I think as much transparency as can be created to show that funds are being well-used or used appropriately,” Lewicki said. “Certainly you’re trying to rebuild trust. And rebuilding the image of trust by disclosing whatever it is you can.”
Gentry, who is scheduled to take over as CEO on July 3, is central to that effort.
“The new CEO has to indicate, ‘I’m here. I’m trying to learn what is going on. As I learn what’s going on I’m going to try to do what I can to fix or improve those things,’” Lewicki said. “And the communication should occur with the board, through the media, with the senior medical staff. All of those groups should have some understanding of what’s being done.”
Holt and Lewicki both said it is very important that the public see officials held to account.
“It’s also definitively clear that if there are key people who are seen as responsible for things that have happened in the past and those people are still working in the organization, that’s truly problematic,” Lewicki said. “You have to indicate that those people are no longer in positions of authority within the system.”
A. Larry Ross, CEO of Carrollton, Texas-based A. Larry Ross Communications, said organizations facing questions should not resort to “no comment.”
“Unfortunately, it can take years to build a good reputation, but only a moment to lose it. Even if allegations prove to be unsubstantiated, a reputation can still be damaged in the court of public opinion,” Ross said.
“While there is some needed discretion in what can be shared in crisis situations, an organization can continue to provide updates of how they plan to move forward, even if you are just giving an update on when you will be able to respond.”