STANFORD: Nurses’ Strike, Failed Merger Cause $43M Summer Losses
In "yet another blow" for Stanford University, its Stanford and Lucile Salter Packard Children's hospitals suffered "stunning financial losses" this summer due to a protracted nurses' strike and a failed merger with UCSF medical centers, officials said yesterday. The two hospitals posted an estimated $43 million loss over June and July, $30 million of which can be directly attributed to the June 7 through Aug. 2 strike, which forced Stanford to spent $24 million to hire replacement nurses and extra security officers and resulted in lost revenues as patients postponed treatment or transferred to other facilities. Stanford CFO Ken Sharigian defended the "controversial" decision to remain open during the strike, stating that running the hospital at 15% to 20% capacity without the support of 500 replacement workers would have meant losses of up to $45 million per month and that the hospitals could not have afforded the "long-term expense" of the nurses' initial salary demands. Non-strike-related losses came from costs related to "extricating" Stanford from its UCSF merger. As a result of the losses, the hospitals will take cost-cutting measures, but layoffs are not expected. They will dip in to cash reserves to cover losses, which could mean a downgrade of Stanford's "A" credit rating, but Sharigian expects credit agencies to consider the losses "in the context of Stanford's $440 million in net assets" (Feder, San Jose Mercury News, 9/7).
In other Stanford news, prominent surgeons Dr. Farr Nezhat and Dr. Camran Nezhat -- brothers who serve as directors of the Stanford Endoscopy Center for Training and Technique -- are coming under fire for allegedly committing "medical journal fraud" in a study on experimental laparoscopic surgery for endometriosis patients that they co-wrote in the September 1992 issue of Surgical Laparoscopy and Endoscopy. In an affidavit filed last month in a Georgia malpractice case brought by a study participant, Dr. Farr Nezhat admits that two of 16 female patients did "not even undergo" the new procedure detailed in the article; however, he insists his errors were "harmless oversights" and "not intended to mislead." According to other allegations, an examination of medical records showed the Nezhats "also omitted serious complications suffered by other patients." Though pressure may intensify to force Stanford to investigate these allegations more thoroughly, "dozens" of physicians, nurses, patients and administrators have "rallied in support" of the Nezhats (Carlsen/Russell, San Francisco Chronicle, 9/6).