Ex-London hospital board member pulls $1M pledge over deficit concerns

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A London Health Sciences Centre donor is pulling a $1-million pledge he made to the hospital’s foundation, citing frustration over what he is calling mismanagement and its growing deficit.

Ronald Breen, 76, a chartered accountant, sat on the board in the late 1990s until 2003 and pledged the donation to the hospital on his death, from his estate.

But the hospital deficit is projected to hit $150 million in 2025, nearly doubling from $78.1 million this year, and it has had two chief executives leave the top job in recent years amid accusations of bloated administration and lavish travel budgets, all while severing longstanding ties with St. Joseph’s Health Care London.

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“My lack of confidence in board leadership and management decision-making will now move me to take steps to withdraw and terminate my pledge,” Breen wrote in a letter sent to the board and hospital administration.

He wants its board of directors fired or altered, he said Friday.

“It has taken a long time to take action and what needs to be done is substantive and dramatic,” Breen, who now lives in Kingston, said in an interview. “The last 12 years of my career I was recognized as a fix-it guy. If you have a problem, you need to address it. If there are 100 things, you need to address it one at a time.”

LHSC communications officials said they will respond to Breen’s concerns at a later date. The London Health Sciences Foundation, the hospital’s fundraising arm, is technically what will lose the $1 million would-be gift. Its officials couldn’t be reached for comment on Friday.

Money sent to the foundation pays for research and education, capital projects and patient care needs, according to its website. It now has $168.5 million in reserves.

LHSC: A timeline of tumult in the top ranks from 2019 to 2024

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David Musyj, brough in as active chief executive, said  last month the hospital is looking to cut costs and reduce spending with an eye on administration and senior executive rank.

Breen was particularly rankled that LHSC was ordered to create a five-year plan to tame its soaring budget after receiving a “balanced budget waiver” from Ontario’s health ministry and only now, two years into that order, has it started to create a financial plan under Musyj.

“All or a substantial part of the board needs to be replaced. It has endorsed decisions from previous leadership that defies understanding. It has not demonstrated good governance.”

Matthew Wilson, the board chairperson, referred questions to hospital administration Friday.

“The board can’t turn a blind eye to a CEO that is not aligned with its strategic direction and plans,” Breen added.

In May, a London doctor, Donald Farquhar, also wrote an open letter calling for the board to be terminated or altered, for similar reasons.

Musyj said in June he is tackling the deficit by implementing “benchmarking” to identify programs at other hospitals that are better than LHSC’s. He and other officials will reach out to the hospitals to find out what they’re doing differently.

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LHSC has hired a firm, Benchmark Intelligence Group Inc. (BIG Healthcare), that reviews hospital operations for savings, to help develop an organizational chart based on other similar hospitals in Ontario. 

It will take about 90 days to complete the review of the organizational structure of the hospital.

But Musyj also pledged support for the board, saying it is a volunteer body that’s working with him.

LHSC also posted a deficit of $46 million in 2023.

“LHSC’s state of affairs is purely a function of numerous bad decisions, bloated executive payroll now approaching $40 million, with no evidence of strategy toward stability,” said Breen who spent seven years on the hospital’s finance committee during which time it always posted a smaller deficit or a surplus.

“The board continuously challenged management to ensure balanced budgets were realized,” he said.

Musyj replaced Jackie Schleifer Taylor, who had been chief executive since 2021. Schleifer Taylor went on a leave of absence in November 2023 and the hospital announced June 11 she is no longer employed there. The board of directors announced her departure as the hospital wrestled with its rising deficit and dealt with the fallout of trips for senior executives and staff totalling more than $470,000.

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The hospital has 22 senior executives including three presidents on the payroll. It paid $1.5 million to five departed executives in 2021, and has signalled its intent to cancel a formal collaboration agreement with St. Joseph’s Health Care London.

Schleifer Taylor succeeded Paul Woods as chief executive after he was fired in 2021 amid blowback over his cross-border travel during the COVID-19 pandemic. Woods sued LHSC for $3.5 million over his dismissal and later reached a settlement with the hospital.

The hospital has been under investigation by Ontario’s Ministry of Health since November 2023 after it planned to send senior executives and staff on three trips totalling nearly half a million dollars.

One of Canada’s largest acute-care teaching hospitals, LHSC operates three hospitals and has more than 15,000 people working there. Its operating budget for 2024-25 is $1.6 billion, up from $1.5 billion one year prior. 

ndebono@postmedia.com

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