This past Friday, NJ.com/NJ Advance Media (the online partner of the Star-Ledger and other New Jersey newspapers) reported
that in 2011, Saint Peter's University Hospital loaned recently departed CEO Ronald Rak $400,000. The plan was for Rak to use the loan to purchase an apartment in Philadelphia, to better foster "an enhanced relationship" with Drexel University Medical School. Rak never purchased the apartment, and now—Rak having resigned suddenly "for personal reasons"
in March—neither Rak nor the hospital will say how much of the loan he paid back, though Rak maintains he has met all his financial obligations to the hospital.
Among the revelations in the article:
- The loan was made in 2011, with Rak's stated intention to use the loan to buy the apartment and to open a joint fertility clinic.
- SPUH's relationship with Drexel that occasioned the loan ended in 2014. Rak had never purchased the Philadelphia apartment; the article doesn't say what happened to the fertility clinic plan.
- In 2015, more than three-quarters of the loan remained unpaid. The hospital board approved a repayment plan requiring that Rak complete repayment by December 2017, but included provisions that would forgive the loan under certain circumstances if Rak was no longer employed by SPUH.
- Several years ago, according to the article's sources, the hospital felt it necessary to launch an internal inquiry into the loan's status.
Thanks to the anonymous commenter who brought this article to our attention! So far, the only follow-up in the media has been this editorial in the South Jersey Times
, pointing out that when such mysterious perks appear in the pay packages of CEOs of non-profit hospitals, they are inevitably reflected in higher healthcare costs. Now that the cat is out of the bag, we expect further follow-up reporting by NJ.com and other outlets.