Pieces of the puzzle

Greater Detroit Hospital

In May 1994, an attorney working for Drs. Soon K. Kim and Orekonde Ganesh establishes this nonprofit corporation.

Greater Detroit Hospital-Medical Centers (GDHMC)

Drs. Soon K. Kim and Orekonde Ganesh buy out of bankruptcy for $2.2 million the former North Detroit General Hospital, which was closed for two years, and Carpenter Plaza, an adjacent medical office building, on the border between Detroit and Hamtramck. In May 1994, GDHMC — a for-profit controlled by Kim and Ganesh — leases the hospital and its equipment to the new nonprofit they created. The lease rate is $160,000 per month. In September 1997, Dr. Kim claims that the nonprofit has paid only $1.45 million of the $6.2 million it should have paid.

First Sterling Management

A for-profit company 50 percent owned by Dr. Kim, with Dr. Ganesh holding 43 percent and hospital administrator Linda Carroll owning 7 percent. It contracts with the nonprofit Greater Detroit Hospital to provide the hospital with a chief executive officer and a number of other executives who will oversee day-to-day operations at the hospital for $25,000 per month. In September ‘97, Kim claims First Sterling is owed $1 million in back fees. According to Carroll, who eventually sues Kim, First Sterling had no offices, no phone, no stationery and no other clients. Until that point, she claims, none of the executives other than the CEO was provided, and that position was paid for by the hospital, not First Sterling.

Promed Management

A for-profit company controlled by Kim. Beginning in 1994, it contracts with GDHMC to run a psychiatric program at Greater Detroit Hospital. It is unclear how much money it generated. But, according to court documents, federal Medicare auditors claimed mismanagement of the program demanded reimbursement of more than $780,000, saying there was no proof some patients needed to be in the program, and that others were treated longer than necessary. After negotiations, the reimbursement is reduced to $300,000, according to Carroll.

Aurora Healthcare

A nonprofit created by Kim in 1997, it oversees the Aurora mental hospital in Detroit. One for-profit company controlled by Kim owns the hospital building; another for-profit company controlled by Kim, Salem Services, provides management services to the nonprofit, with part of its fee tied to Aurora’s income. Early in 1997, Greater Detroit Hospital leases 40 beds at Aurora for $56,000 per month. Also, because of a state law in place at the time, Aurora must be affiliated with a hospital that provides medical and surgical services. Greater Detroit Hospital fills the role.

In 1999, the Rev. Jim Holley, chairman of Greater Detroit’s board of directors, balks at financial dealings between Greater Detroit and Aurora. He writes a letter stating that Greater Detroit has released more than $4 million to Aurora and provided an additional $1.1 million in “in-kind” service. At that point, he shuts off the flow.

Salem Hospital Pharmaceutical

A for-profit company controlled by Kim and created in 1998. Carroll claims it was started with staff and inventory acquired by closing the pharmacy at the nonprofit Greater Detroit Hospital. Kim denies the allegation. In either case, Greater Detroit Hospital becomes a customer of Salem Hospital Pharmaceutical, paying a 15 percent markup, Carroll says.

Read this week's feature on Dr. Kim.

Who sits on the board of directors for Dr. Kim's nonprofit corporation?

Curt Guyette is the Metro Times news editor. E-mail [email protected]

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