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Published on 10/30/1995 All articles from this issue

El Camino Hospital fate may be determined in closed meetings

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By Clyde Noel / Town Crier Staff Writer

The El Camino Hospital District board met in a closed session last Thursday to confer with the District's legal counsel and determine whether to begin litigation against El Camino Hospital management over conflict of interest charges. Board members continued to meet over the weekend with no outcome announced publicly.

According to the Santa Clara District Attorney's Office, should any conflict of interest be established, it is possible the contract between the public El Camino Hospital and the private Camino Healthcare be declared void.

At the district's meeting in September, the board hired San Francisco-based attorney Stephen Mayne to head an investigation into the legality of the hospital's 1992 "dedistricting." At that time, the board approved transfer of El Camino Hospital assets to the private non-profit Camino Healthcare.

Since then, Mayne has looked into allegations concerning whether the hospital's former chief executive officer, Richard Pettingill, had a conflict of interest when he helped to de-district the hospital and then become head of both the new non-profit Camino Healthcare organization and the El Camino Hospital.

"This will not be easy," board member Mark O'Connor said before the meeting. "There a lot of problems we will look into."

Dr. Elizabeth Vilardo, chairwoman of the Camino Medical Group, cautioned the board. "Camino Healthcare is dedicated to the health of this community. Any action that is detrimental would make it difficult to continue with good patient care. Think carefully about this community before you make any decisions."

Under discussion at the meeting will be former administrator Pettingill and possible conflict-of-interest allegations. In June, Pettingill resigned from his chief administrator role with the hospital district, then resigned from the non-profit Camino Healthcare on Oct. 1.

The district board formed Camino Healthcare to take over management of the public hospital because it was losing money from provider payments and a lower patient bed count. By eliminating public status control, proponents claimed, Camino Healthcare would be able to form partnerships with private physician groups and compete more effectively for patients in a managed care position. Some physicians and other hospital staff complained the new management favored a minority of doctors and created an uneven playing field.

Once the de-districting took place, the El Camino Hospital District board became the landlord and administrator of a $2.5 million a year tax collection revenue, and Camino Healthcare was responsible for day-to-day hospital operations.