After multiple reports around poor financial spending, Southwestern Ontario’s largest hospital network is now under investigation for fraud.
The London Police Service posted on X Wednesday night it has initiated a fraud investigation relating to past financial practices at the London Health Sciences Centre (LHSC).
Police would not say what prompted the investigation, only that they would only share additional information if appropriate.
Meanwhile, LHSC posted on X that the police probe is “in response to concerns raised by London Health Sciences Centre.”
“We are fully cooperating with the police during this investigation. As the investigation is ongoing, we will not be making any further comments,” the post form LHSC read.
It is unclear who police are focusing their investigation on, but the hospital network is projecting a $150-million operating deficit for 2025 on top of deficits in 2023 and 2024.
In late September, the entire board of directors at LHSC resigned en masse following public criticism over the hospital’s spending.
David Musyj, who was appointed supervisor at LHSC by the provincial government and also acts as interim CEO, said in a statement at the time that the entire board decided to step down “voluntarily.”
Criticism over the hospital’s spending is not new
In a letter dated July 16, legacy donor Ronald Breen, who once served on the board of directors, wrote to the organization saying the current board “does not have a governance regime” and has “lost its way.” He said he would cease his $1-million legacy pledge to the hospital foundation upon his death if changes were not made.
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“I have keenly observed, in horror, a financial disaster in the making,” Breen wrote in the letter.
He said seven years ago, the organization had over $200 million in working capital, which is calculated as a measure of current assets minus current liabilities.
“Over the last three years, you’ve got to an unimaginable amount of $275 million worth of deficit,” Breen said in July.
Overall, Breen’s letter concludes that “LHSC’s state of affairs is purely a function of numerous bad decisions” and “bloated executive payroll – now approaching $40 million” with no “strategy toward stability.”
In September, LHSC announced $14 million in staffing cuts. The hospital network eliminated 59 positions and reassigned 71 others in an effort to save money.
Since 2018, the hospital has seen a revolving door of CEOs and senior leadership with Musyj being the fourth to hold the role since then and several resignations from vice-presidents as well.
It began with Dr. Paul Woods, taking over from Murray Glendinning, who retired in 2018. Woods faced challenges with morale among front-line staff during the second wave of the COVID-19 pandemic in late 2020, with one nurse arguing that the administration failed to properly prepare and then tried to shift blame to front-line workers once cases among staff ballooned.
Woods weathered that storm but was ousted in January 2021 following controversy over his stateside trips amid the height of the COVID-19 pandemic. That prompted a wrongful termination lawsuit, as well as the resignation of the then-chair of the board of directors and the departure of two executive vice-presidents. The lawsuit was resolved in spring 2023 before it was set to go to trial.
Dr. Jackie Schleifer Taylor filled the role on an interim basis before being appointed president and CEO in November 2021. Two years later, she took a leave of absence “due to a health matter.” However, the announcement came two weeks after the London Free Press reported that the Ministry of Health had launched an investigation into two international trips for executives and one planned trip that was then scrapped, totalling $470,000.
Dr. Kevin Chan, corporate medical executive, was then appointed acting president and CEO of LHSC until Windsor Regional Hospital’s CEO David Musyj was brought in this May.
The Ontario Case Costing Initiative dataset is restricted and will not be made available, a government website says. Data from the Canadian Institute for Health Information for 2021-22 showed the cost of a standard hospital stay at LHSC was less than average, though it noted that the results should be interpreted in the context of the COVID-19 pandemic.
Earlier this month, at a community updating meeting, Musyj spoke about wanting to be more transparent with the public moving forward.
“Our aim is to foster a spirit of transparency and accountability, ensuring that you, our patients, families and community members, feel connected to the decisions and actions that shape the future of health care. Here at LHSC, when the new board of directors is renewed, this transparent platform will continue,” he said.
— with files from Global News’ Jacquelyn LeBel and Aaron D’Andrea