Millions paid to consulting firm while THE MED struggled - WMC Action News 5 - Memphis, Tennessee

Millions paid to consulting firm while THE MED struggled to stay afloat

By Kontji Anthony - bio | email | Twitter | Facebook

MEMPHIS, TN (WMC-TV) - It's no secret The Regional Medical Center has struggled to keep its emergency room afloat.

But internal documents reveal that the company hired to cut costs at the hospital spent millions of taxpayer dollars on expensive suites, lavish dinners and daily travel.
    
The Med, Tennessee's oldest hospital, is owned by Shelby County taxpayers. The facility houses the top trauma center in six states and a 150-mile radius.

But the troubled economy has put The Med's emergency room in jeopardy.
    
Last month, The Med's board chairman Gene Holcomb announced the gravity of its financial losses.

"I think that us having to cut the emergency room, that's probably more than a 50-50 chance," he said.
    
The hospital's money woes are nothing new. In 2007, The Regional Medical Center brought in Nashville efficiency expert FTI Cambio, LLC, to turn the hospital around.
    
Internal invoices of FTI's monthly fees and expenses show that with most of the firm's experts living out of town, travel fees were costly.
    
Rental car expenses exceeded $1,000 at a time and airfare tickets cost about $500 each.
    
One employee charged nearly $400 for a flight to his deceased mother-in-law's house to clear it out for sale. The same employee rented a car for nearly $84.00, plus gas, parking, breakfast and groceries.
    
Other charges included dinner that cost over $80 at Downtown Memphis hotspot Spindini.
    
Another dinner for five cost nearly $200 - more than $36 per meal.
         
Additional charges include breakfast, valet parking, lunch and dinner. Records show taxpayers also paid for consultants' phone and MLGW bills.
    
Invoices show the grocery list for a trip to the Farmer's Market include $27 for pork, $37 for seafood, $9 for honey and $21 for unreceipted bread.
    
When asked for comment, The Med released this statement: "The Med reimburses FTI Cambio for expenses incurred by the FTI Employees working with The Med. These expenses are reimbursed in accordance with the agreement between The Med and FTI Cambio and include travel and living expenses."
    
Action News 5 requested FTI's contract, which says "the hospital will reimburse employees for reasonable expenditures incurred during approved travel on behalf of the hospital."

Records show that from the time FTI came on board in July 2007 until September of 2009, The Med's losses ran around $19.4 million, while FTI fees and expenses cost taxpayers nearly $14 million, plus an additional $3.5 million bonus.

But The Med says FTI made improvements totaling about $25 million. The firm's contract is nearing its end.
         
Meanwhile, The Regional Medical Center has just enough money in the bank to stay open for two days at a time.

Copyright 2009 WMC-TV. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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