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Struggling hospital blames prior leadership for dire financial situation

The former CEO and CFO of St. Vincent Health left in August. Since then, the hospital has struggled to pay employees and vendors.

LEADVILLE, Colo. — The interim CEO of St. Vincent Health, the struggling hospital in Leadville, said prior management made "bad decisions" that led to multimillion-dollar losses and contributed to the hospital's struggles to pay vendors and employees.

John Gardner said the hospital did not have departmental budgets, properly register doctors with insurance companies or monitor key financial accountability measures. 

"I’ve had 40 years of healthcare experience and I never would’ve run a hospital the way they did," he said. 

The hospital still struggles to make payroll and is working out payment plans with its vendors, including a local restaurant that serves meals for patients. The pharmaceutical distributor that provides medication for St. Vincent only agreed to send shipments if the hospital made payment upfront, Gardner said. 

"I keep telling people there is absolutely no reason why the hospital should be in this position," Gardner said. "I have never seen a mess like this before."

"In recent years, St. Vincent Health had averaged collecting .36 cents on the dollar for patient services. The average for small hospitals should be .75 cents," the hospital said in a written release.

Credit: 9NEWS

Gardner said the hospital's $26 million expansion project completed in 2021 likely did not contribute to its financial distress.

He said if a genetic testing program initiated under the previous CEO had been implemented, it would've likely been in violation of federal kickback laws. 

"We keep looking for any indication of anything illegal," he said.

St. Vincent parted ways with previous CEO Brett Antczak in late August. His separation agreement, obtained by 9NEWS through a public records request, showed the hospital district paid him about four months severance of his $218,000 salary. 

The hospital provided him a reference letter that reads: "[Antczak] played a significant role in identifying and correcting issues with the design and construction of the hospital improving the flow and functionality of the space. We wish him the best in his future endeavors." 

The hospital board fired its former CFO, Allan Scroggins, the same day. His termination letter said he called the board "stupid" and "idiots" who "did not know what they were doing." It also said he failed to provide adequate government financial reporting and signed a document inappropriately. 

Neither Antczak nor Scroggins responded to requests for comment.  

Gardner said he believes the hospital can be turned around -- but it will take time. 

"It really has probably been a two or three year process -- if not longer -- in terms of digging the hole," he said. "We all want an immediate repair, but this stuff is pretty complicated." 

> Watch the full interview

He said the hospital has cut nearly 50 full-time positions -- about a third of its staff -- and closed programs like genetics, behavioral health and hospice care. The hospital board has hired a new management company and a third-party vendor to try to recoup uncollected insurance reimbursements. 

Gardner said he is "making headway" on basics, like getting doctors properly credentialed with insurances. 

St. Vincent begged Lake County commissioners for a bailout to help make payroll in December. Under the terms of the agreement for the money, the hospital board was forced to apologize to the taxpayers of the county for its failures. 

The hospital said it is expecting a $260,000 check from a medical equipment company from which it bought surgery equipment it later realized it could not use at Leadville's high elevation.


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