Dr. Brad Baltz will begin practicing again on April 30
by Caleb Talley
Dr. Brad Baltz, once the highest paid nonprofit employee in the state of Arkansas, spoke out on Monday about his recent firing from CARTI of Little Rock. The oncologist alleges administrators at the cancer treatment facility have mismanaged funds, resulting in the dismissal of highly regarded employees in order to cut costs.
Baltz was let go by the institute in March. The cancer treatment facility has since eliminated 22 positions, five of which had not been occupied. Among those let go were CARTI’s longtime public relations coordinator, Rob Standridge, and vice president of business development, Rebecca Pearrow. After more than 12 years as president of the CARTI Foundation, Kathi Jones also plans to depart, announcing her retirement earlier this month.
According to Baltz, the cancer treatment facility and its relationship with its physicians has been strained for years. CARTI, he said, has not lived up to promises it made to the nonprofit’s doctors.
“It’s been a difficult and complicated relationship for the last five years,” said Baltz. “Unfortunately, in my opinion, CARTI did not keep their promises. The promise was that it’d be physician led and administration managed. Unfortunately, it was administration mismanaged to the tune of eight figures. When it all went wrong, it became the physicians’ fault. We were supposed to fix everything they broke.”
At CARTI, Baltz said it’s the “blind leading the not blind,” where he and other oncologists are guided by administrators that have little-to-no oncology experience.
“Contrary to CARTI’s opinion, I have learned a thing or two about taking care of cancer patients and how to run an oncology business,” said Baltz. “It was just a major, major irreconcilable difference on how to manage the business. I think their financial statements show that they don’t know what they’re doing.”
As of fiscal year 2017, Baltz was paid $2.3 million, making him the highest-paid nonprofit employee in the state. Baltz said he took a 30-percent pay cut when he came on board at CARTI. The oncologist said CARTI’s financial woes are due, in large part, to its management.
“It all got very complicated last fall,” he said. “Mr. [Adam] Head was named chairman of the board. Unfortunately, he’s done nothing but bring in a bunch of his buddies to run the administration. It’s just been a total lack of success of what was presented to happen. It’s been a total lack of leadership from the administration. I can run my own practice. There’s no sense in me being told what to do by somebody that doesn’t know what they’re doing, when I already know how to run it.”
Following Baltz’s firing, Head and Harry Hamlin, president of CARTI’s board of directors, issued a statement that read, in part: “We have made the decision to part ways with Dr. Brad Baltz, effective Thursday, March 15. It is not a decision we took lightly. His medical contributions to our team were appreciated.”
The statement did not address exactly why the oncologist was fired, but noted the facility’s commitment to “maintaining the utmost professionalism as a team, promoting a culture of respect among all employees.”
In March, CARTI reported a net loss of $1.5 million for the last six months of 2017. The cancer treatment facility posted a loss of $2.6 million during the same period of 2016. The nonprofit cancer-treatment center also owns a $49 million debt in public bonds issued for the construction of the new center that was opened in 2015. Baltz cited the center’s debts as a key reason for his firing.
“I’m going to go back to running my own practice,” said Baltz. “I don’t expect any of the problems I had at CARTI. They have a problem. They actually have 49 million problems. If we didn’t have that debt on the cancer center, none of these conversations would be occurring, and I’d still be there. It’s just the fact that, if it costs almost $500,000 a month for that building to sit on the dirt before you buy a product or pay an employee, there’s just not that kind of money in the current health care market.
“When we moved into the building, CARTI had the cash to not leave us with that kind of mortgage,” he added. “The people who approved the bonds should do some careful reflecting. And the people who decided a mortgage that large in this current health care economy just didn’t know what they were doing. The board just did not go deep enough in the details. They were given incomplete information.”
According to Baltz, much of CARTI’s financial woes stem from an inability to adequately bill and collect revenue.
“They couldn’t bill for the services and collect the money,” he said. “The money that is missing, that is gone, is due to blatant mismanagement of the revenue cycle. They don’t know how to bill and collect for chemotherapy and cancer services. They buried it, and buried it and buried it. Fitch [Ratings] said, ‘we’re in charge of overseeing this bond. What’s going on here?’”
Fitch Ratings Inc., of Chicago, provides the credit rating for CARTI. In 2016, CARTI was unable to maintain the debt services ratio that was required on the $49 million bond issue. Their inability to do so resulted in the hiring of a management consultant, Berkeley Research Group, or BRG. The group left last year.
“We’ll see what happens this summer,” said Baltz. “Their revenue cycle is a disaster. It’s been a disaster for three years. When the BRG consultant came in, I said they needed to fix three things: revenue cycle, revenue cycle and revenue cycle. The person in charge of the revenue cycle now came from a long-term care facility, no oncology experience. The CFO comes from UAMS, with no oncology experience. The CEO comes from the Heart Hospital, with no oncology experience.
“When you buy $90 million worth of chemotherapy drugs a year, you have to know how to bill and collect for that expense,” he added. “They just don’t know what they’re doing.”
Baltz said he will practice in a temporary location, beginning April 30. His temporary location will be at the Doctors Building, at 500 S. University Ave., Suite 514. Baltz added that he plans to be back in a full-service chemotherapy suite as early as this summer.
“There’s some negotiations with other players here in town, with possible joint ventures,” he said. “None of that has been inked yet. Right now, I’m going to be a fellow practitioner up for other options in the future.
Baltz said he has hired Arkansas Physician Management Inc., a 47-physician group that is largely involved in primary care through CHI St. Vincent, to manage his practice. His ultimate goal, he says, is to get back to his patients.
“I’m very happy to get back to work and take care of patients,” Baltz said. “My only concern is making patients get cared for. I intend to be back, putting them number one, as soon as possible… If we take care of the patients, everything will be fine.”
On Tuesday, CARTI President and CEO Adam Head released a statement to Arkansas Money & Politics regarding the recent layoffs, Baltz firing and the financial health of the cancer treatment facility.
“When I was named CEO last fall, I was charged with effectively moving CARTI forward into the future of cancer care in Arkansas and beyond,” Head said in the prepared statement. “At the same time, I was tasked with setting an organization faced with financial challenges on a new course. This has exposed areas that need to become more efficient to make this organization strong and sustainable going forward. As a result, we are in the midst of a significant restructure.
“In order to continue to deliver world-class cancer care, we have to make general operational improvements, which requires integration and restructuring across many different departments,” he added. “This meant eliminating 22 positions on Thursday, April 12, including 17 that were occupied.”
According to Head, the move leaves CARTI will 398 employees, while reducing operating expenses by $1.4 million, annually.
“We made the decision to part ways with Dr. Baltz, effective Thursday, March 15,” Head said. “It was not a decision we took lightly, and the action we took was not in any way related to restructuring or financial savings.”
Head went on to say that most of Baltz’s former patients have elected to reschedule with CARTI’s other providers.
Baltz expects to regain patients when his practice opens up on April 30.