Arbitrator awards fired Swedish Health whistleblower surgeon $17.5M

Legal cases
Swedish Health is contesting an arbitrator's decision awarding $17.5 million to a whistleblower surgeon purportedly fired over a failure to report a prostitution arrest.

A substantial payout for a fired whistleblower has Swedish Health crying foul. The organization will now challenge the arbitrator’s award in court.

David Newell, M.D., blew the whistle on a high-profile case involving neurosurgeons who double-booked patients for surgeries at a Swedish Health hospital in Seattle. The fallout from that case was sufficiently brutal for the CEO of Providence St. Joseph, which acquired Swedish, to take out a full-page ad in The Seattle Times apologizing to the organization’s employees and patients.

RELATED: Report: Swedish Health surgeons performed concurrent surgeries without patients' knowledge

Now, The Seattle Times reports, an arbitrator has agreed with Newell’s claim that Swedish fired him in retaliation for his whistleblowing activities, and awarded him $17.5 million. The award reportedly includes $15.5 million in lost earnings and another $1 million for emotional distress.

Swedish Health contends it fired Newell after he failed to immediately disclose he had been arrested in a prostitution sting, as required by his employment agreement. The organization also protested the amount of lost earnings requested, noting that the figure represented nearly 10 times his annual compensation in 2014, and that he would have needed to perform more than 3,000 complex brain-aneurysm procedures in a year to reach such an amount.

RELATED: Providence CEO takes out an ad to apologize for Swedish Health issues

Guy Hudson, M.D., the CEO of Swedish, blasted the ruling in a statement (PDF). “For this arbitrator to award Dr. Newell $17.5 million—at a time when many people cannot afford healthcare or fear losing their insurance, and when there is an epidemic of sex trafficking and exploitation of women—is unconscionable and outrageous,” he said.

But the newspaper reports that in a recent court filing, Newell’s attorney maintained that evidence presented showed Swedish Health’s actions “were part of a pattern of targeting and interfering with established neurosurgeons’ practices, retaliatory behavior, and a disregard for patient safety.”

In a similar case, a court recently ruled in favor of a Boston-based surgeon who lost his job at an upstate New York hospital after speaking out about concurrent surgeries performed there by another doctor. Lost wages in that case totaled $88,277.