Howard Brown Health Center’s (HBHC) former CEO and president Jamal Edwards departed the organization in August 2012, amid a flurry of complaints and questions about his management style and strategies.
Since then, both the Chicago LGBTQ community and the larger healthcare community have been watching the organization to see what its future might look like.
Recent news—such as the abrupt cancellation of a planned move of some services to a new location and a report on its recent audit—have raised old concerns. All of this has brought renewed attention to the questions around its leadership and staff, particularly the appointment last year of Karma Israelsen, interim CEO and president.
The delay in the move of HBHC’s Triad Health Practice (renamed Aris Health) to 3245 N. Halsted St., a space formerly occupied by Northwestern Memorial Physicians Group, has been the more public glitch in the organization’s way forward.
Amid much fanfare, HBHC announced that this new space would allow it to expand its services, particularly to pediatric populations. The move had been initiated under and announced by Edwards, and Israelsen had spoken proudly of it to WCT. She spoke of the advantages of a larger space and of the expansion of pediatric services to a community whose needs are rapidly changing.
In February, the news media received an invitation to a ribbon-cutting in March. But then came an announcement, almost a week prior, that the March 25 ceremony and the move had been postponed until further notice.
The cancellation caused consternation and questions, including some long-simmering ones about the ability of Karma Israeslen to lead Howard Brown. In September 2012, following Edwards’ departure, Israelsen—then board chair—took over as interim president and CEO, with an annual salary of $180,000. The choice of Israelsen as HBHC leader raised eyebrows, since many felt that the storied institution was, once again, choosing someone with no experience in healthcare.
Israelsen’s salary, while nowhere as high as the $265,000 made by Jamal Edwards, was still high enough to be questioned. Like Edwards, she had no previous experience in healthcare, and had left her position at Career Education Corporation. She was, at the time of her appointment, in the midst of taking a six-month period off to travel and decompress, as she told WCT in October 2012.
In that same interview, Israelsen emphasized that hers was not a permanent appointment, and that her major task was to initiate changes in the culture at HBHC and to ensure the hiring of a new CEO and president.
Several insiders and former employees had asserted that Edwards’ tenure had been one of surveillance and high tension, and HBHC at the time was marked by a large turnover in staff. In past years, some of HBHC’s leaders have come from within internal ranks, often with little to no experience in healthcare management.
When contacted by WCT in the wake of the cancellation of the Aris move, Israelsen acknowledged that the sudden change did not help the organization, and that it was both “unfortunate” and “embarrassing.”
Asked for details on what had transpired, Israelsen said, “The agency had signed a 30-year lease with Northwestern University Memorial for the space. When we started the process in October/November of last year, we thought there would only be minor updates to carpeting and paint. We hadn’t planned on dramatic construction, only some cosmetic touch-ups which wouldn’t require any permits.”
According to Israelsen, as HBHC continued talks with Walgreens, its longtime pharmacy partner, “it became clear that, to meet capacity, we needed additional changes to the building. A pharmacy has very specific security, temperature and security requirements, for instance.”
Israelsen added that HBHC realized it did not have the requisite permits and decided to postpone the opening rather than have visitors see an unfinished space. HBHC is now hoping for an opening in early summer; the Triad Health Practice is still operational.
She acknowledged, “At the end of the day, we still have a way to go in getting our planning done a little bit better, but at the end of the day we strongly believe that the fact that we’re going to take the time and do the additional construction on our side of the building for our patients is going to be really, really impactful and really the right kind of investment to do for our clients long-term.”
HBHC also had to make additional changes to meet Americans with Disabilities Act requirements, which have changed since the building was built.
WCT asked if HBHC—a large, multimillion-dollar agency—had a committee or a subgroup specifically designated to oversee the construction over these past many months, which could potentially have prevented the late realizations. Israelsen responded, “We only own one building [on Sheridan] so any kind of construction issues are covered by our landlords.”
She added that, with Walgreens, “because this was a new process for them, the Walgreens process for getting a lease established takes several weeks as we started to work through the lease negotiations, since they will be subletting the space, it actually takes a long time.
“Having to arrange for their architecture firm and our own to come in, there was a significant amount of building, electrical, and plumbing inspections that had to be done. Unfortunately, these things take time. I completely understand how people would perceive that if we knew about this, we should have planned better. We agree. Unfortunately, it’s not a core competency of ours—my team is a medical team; we don’t always deal with the city.”
Asked about the impact of the late opening, she said that the Triad Practice at the Ilinois Masonic space was still running and there was no disruption of services there. Illinois Masonic is allowing HBHC to continue the lease on a month-to-month basis. (It was to have ended Feb. 28.)
HBHC is also currently undergoing a search for its next CEO, aided by Kittleman and Associates, a search firm that specializes in the hunt for leaders of nonprofits.
Soon after news of the postponement came a report from Crain’s Chicago Business titled, “Audit dings Howard Brown financial controls,” which stated that the most recent audit, for the fiscal year that ended June 30, 2012, found areas of weakness, including a failure to reconcile its books and track petty-cash payments.
Contacted for comment on this, HBHC Board Chair Duke Alden said that he was “very disappointed” in the Crain’s article. He said that the board of directors had been very pleased with the audit “in not only firming up our bottom line, but with better controls.”
Alden pointed out, “In 2010, when we had the first independent audit after the financial mismanagement, there were 41 findings. We’ve been working systematically to get that whittled down as soon as possible [with the current number being seven]. We would love to see zero, and that’s my pledge as board chair [to bring down the number].”
He said, “Crain’s looked at it backwards/forwards, and the implication was that we had somehow slipped. Even our auditors at Crowe-Horwarth read the article and were taken aback by how negative and skewed it was, focusing only on those few instances.”
The audit is available online on the Howard Brown website. In most instances where the auditors report on areas of weaknesses, HBHC’s response is, “We agree,” followed by a summary of what will be done to rectify the problem.
Alden said that the report needed to be read “from stem to stern, not just for the last few pages” and that the article was “like a kick in the teeth.”
Howard Brown has not, in its more recent years, had people with expertise in healthcare. Edwards was appointed under circumstances that have long been controversial: the board chair who oversaw the process at the time was Mark Andrews, who also worked for Career Education Corporation. Israelsen, then only a board member, was at the time a vice president of regulatory operations in the same corporation.
Andrews stepped down as board chair in the wake of a clean sweep, leaving only Israelsen and Frank L. Buttita as remaining board members because they had been newly appointed to the board. Israelsen stepped in as board chair in January 2011, after Edwards became CEO. She and Edwards worked closely together to oversee a board selection committee, according to an interview Edwards gave to WCT in February 2011.
All of this has led to several people questioning if HBHC can ever move out of its circular form of appointments, where important selections appear to be made based not on qualifications but on how people deploy their affinities and ties with current board and staff.
Asked directly about Israelsen’s qualifications in light of recent reports, Alden said, “We were incredibly lucky to have Karma take over this role [of interim CEO] because we had so many in-flight projects that it would have taken an act of God to find someone who could have taken over the reins of the organization and seen through those projects and all the changes related to the Affordable Care Act.” He said that Israelsen was the only option that made sense to the board.
He acknowledged that she does not have healthcare experience, “but she did have an executive sense of what needed to happen next.” On the hiring of former CEOs, he said that though he had not been there during the tenures of Edwards or Michael Cook before him, “I can anecdotally affirm that traditionally Howard Brown has looked to executives who have not had dramatic, deep expertise in the healthcare field, and that has to change.”
Alden emphasized the importance of a CEO with experience in healthcare in light of the changes coming through the Affordable Care Act: “We can literally go to bed at night and wake up the next morning with dramatic changes because everything is changing so rapidly. So our next CEO will have that experience.”
Both he and Israelsen have emphasized that the current search is a national one.
Internally, HBHC still has changes in place, some of which have to do with its storied institutions like the Broadway Youth Center (BYC) and the Brown Elephant, its highly profitable set of second-hand retail stores.
BYC, according to Israelsen, is set to move to a new location; the announcement is expected soon. In December 2011, WCT reported that the majority of approximately 50 Brown Elephant employees had been reduced to half or part-time in order for HBHC to save on expenses related to their costs of healthcare (with no clear evidence as to how much this actually saved).
At the time, only approximately nine employees retained full-time positions. Asked recently about the plans to reinstate healthcare for HBHC employees, Senior Communications Director Alonzo Brown responded, “Five Brown Elephant part-time employees have been converted to full-time which began in January.”
As HBHC moves forward toward a new space and new regulatory mechanisms and expenses linked to the Affordable Care Act, it does so in a healthcare field with a small but increasing number of agencies more attuned to the needs of LGBTQ patients.
The challenges in the months ahead for the organization will be to finally ensure that its new CEO can navigate the changing landscape while also providing services to the larger community and taking care of its own employees.
Originally published in Windy City Times.