80,000 Evaluations, Little Outside Review

New York Times, October 13, 1997
by Joe Sexton

The experience of many welfare recipients inside H.S. Systems has produced skepticism
about the motives of the clinic, which determines whether welfare recipients are healthy
enough to take part in workfare programs.

Those suspicions are shared by some city lawmakers and welfare agency workers. And
that, experts said, is not surprising.

"Whenever you have a government-funded medical operation working with the public,
you have what is known in medical ethics as the question of the double agent," said
David J. Rothman, a professor in social medicine at the Columbia College of Physicians and
Surgeons. "Are these doctors working for the city or for the patients?"

H.S. Systems, owned by a Manhattan financier, a lawyer from Poughkeepsie and a doctor
at Columbia-Presbyterian Medical Center, has had contracts with the city for years, mostly
doing evaluations of welfare recipients for programs run by the Human Resources
Administration, the city’s welfare agency.

In 1995, the city decided to award an $18 million contract for the employability
evaluations. Only H.S. Systems and one other clinic bid.

The 80,000 evaluations done by H.S. Systems last year are seven times the number it
ever handled before the contract. But H.S. Systems’s work with welfare recipients comes
under almost no independent oversight. H.S. Systems said the city Health Department does
not inspect it regularly. The Human Resources Administration acknowledges it has only done
two on-site reviews since the contract’s start.

State Health Department officials said their investigations of H.S. Systems, when its
offices were at another Manhattan location, had found a range of deficiencies. In 1987, it
was cited for deficiencies in management and recordkeeping. In 1988, the state found
deficiencies in policy and procedures, fire safety, infection control and housekeeping.

Officials with the state’s Department of Social Services, which has contracted with
H.S. Systems to evaluate people applying for Federal disability benefits, said its
auditors had found its work to be satisfactory. However, the people applying for Federal
benefits have a different experience: They enter the clinic on a different block, through
a formal lobby with elevators. They report to a seventh-floor suite that includes the
executive offices.

At a hearing conducted by the City Council, clinic officials defended the performance
of their 18 staff physicians and dozen or more consulting physicians.

But according to state records, two current staff doctors at H.S. Systems, Viola
Anderson and Koshi Padnani, had been disciplined by state authorities before coming to the
clinic. Dr. Padnani was placed on probation in 1993 after being found guilty of negligence
for "inappropriately prescribing controlled substances." Dr. Anderson was found
guilty in 1989 of "patient neglect" in her care of two nursing home residents
and was placed on probation.

A third doctor, Peter E. Graham, continues to work with H.S. Systems as a consultant
despite being placed on probation by the state in 1996 for what it said was "gross
negligence" stemming from his treatment of two emergency room patients.