Staff Cite Supply, Maintenance, and Paycheck Issues at Randolph Hospital

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On the empty second floor of Randolph Health, an alarm bell is screaming. The hospital’s oxygen reserves are running low again. In the past, a maintenance crew would refill the supply promptly. But in recent months, staff say days have passed before it’s restocked. 

“They won’t deliver without being paid first,” a switchboard operator who monitors the alarm recently told The Assembly. Like all staff who spoke for this story, she requested anonymity to avoid retaliation. 

Even at night, the vendors call: “They’re asking for accounts payable. It’s midnight.” She said the calls have become more frequent.

More than a dozen current and former Randolph employees working across 10 departments shared concerns about worsening conditions and dwindling supplies at the facility, which sees roughly 40,000 patients in its emergency room each year. The Assembly corroborated their accounts with supporting documentation.

“It’s like we are in a third world country,” one said.

Employees recounted running out of Chux, the disposable pads placed under patients to absorb blood and other bodily fluids, as well as diagnostic testing materials, clean linens, and even printer paper for patients’ discharge instructions. 

More troubling accounts focused on problems with aging medical equipment, including the hospital’s CT scanners, which they said have been working intermittently, if at all. In August, a representative from a company that makes devices to monitor cardiac patients’ heart activity took back its equipment. Last month, delayed repairs to laboratory equipment set back the analysis of test results.

Multiple employees also described an outdated intercom system that has failed to transmit emergency messages, at times delaying responses to alerts like code blues (heart failure) or code fours (emergency cesarean sections) by minutes. 

“I can’t even tell you how sick it made me feel,” said an employee who has dealt with unpaid vendors. “There comes a point when there aren’t enough resources to run a hospital.”

The staffers blame corporate neglect under Mike Sarian, an investor who bought the struggling rural hospital out of bankruptcy in 2021 and then used it as collateral as he grew the first of three startups, American Healthcare Systems. Sarian’s companies have since purchased 17 more distressed hospitals in five other states. 

“There comes a point when there aren’t enough resources to run a hospital.”

Randolph Health employee

At least 13 vendors nationwide seeking payment for unpaid bills have filed lawsuits against hospitals Sarian owns. Many of the suits describe ill-equipped facilities that mirror concerns Randolph employees have shared. Lenders have also accused the companies of defaulting on more than $130 million in combined debt in lawsuits and formal notices this year. 

Staffers at Randolph, which employs roughly 800 people according to county records, say they are doing their best to hold on. It’s the only hospital in the county of 150,000, and the next emergency room is more than 30 minutes away. But they say the shortages have lowered the standard of care they could provide. And while they have filed complaints with state and federal regulators, none have intervened to date.

Over the summer, anomalies began appearing in their paychecks: The hospital delayed depositing employee retirement deductions and unexpectedly defaulted on its health insurance plan. 

CEO Kevin Spiegel initially denied the hospital has had any shortages in an October 2 interview: “There was never a time when we didn’t have the supplies we needed.”

But four days later, American Healthcare Systems Chief Medical Officer David Rosen acknowledged they were real. “Some of the things that people complain about were true,” he said. “We’re not trying to hide or anything like that. They did happen.” 

Presented with a prepublication memo outlining various supply shortages and other concerns, executives did not dispute most issues but said they have been resolved. The executives say the hospital’s finances have stabilized and they are eager to pivot to their long-term recovery plan. 

During a more than two-hour interview with The Assembly, they showed off a well-stocked storage room. Greeting the storage room supervisor, Spiegel, a native New Yorker, quipped, “His only deficit is he’s come from Long Island.” 

A Rural Health Crisis

The rapid pace of health-system consolidation over the past two decades has left many independent, rural hospitals struggling. These facilities see a higher proportion of low-income, elderly, and disabled patients who rely on government-backed programs, which pay less compared to patients covered by private insurance. They also often lack the patient volume to support more profitable elective procedures that urban hospitals can offer.

As both states and the federal government have tried to tame rocketing health care costs, reimbursement rates have plateaued. Rural hospitals across the country have closed, including 12 in North Carolina since 2005, the third-highest in the nation. 

These changes hit Randolph particularly hard. The nonprofit hospital fell behind on its debt from a 2007 expansion and never caught up. Local elected officials and hospital leaders couldn’t convince nearby, better-equipped hospital systems to buy it and take on its debt, and after two failed mergers, they ran out of options. 

In 2020, as the hospital faced bankruptcy, Mike Sarian arrived. 

“I should be a hero.”

Mike Sarian, American Healthcare Systems CEO

Sarian, a California-based executive who started in the jewelry business before pivoting to health care in the ’90s, has branded himself as a hospital turnaround expert. When he bid on Randolph, he told the bankruptcy judge it had been poorly managed and pledged to expand services. “I know their issue because I studied it,” he said. “It’s very classic.” 

With no better options, the judge reluctantly approved Sarian as the winning bidder in the bankruptcy. “It’s better than nothing,” she said at the June 2021 hearing formally approving the deal. 

For the first few years after the acquisition, staffers say things at Randolph were mostly stable. But over the past year, as bills racked up and executives leading Sarian’s three companies began a messy corporate divorce, employees say they’ve been hamstrung in their ability to offer quality care. 

Meanwhile, Randolph County says Sarian should be on the hook for most of a $12 million state loan it gave him, saying he flouted its basic terms. 

Experts say low investment, supply shortages, unpaid vendors, and payouts to executives are common under the private-equity hospital ownership model, in which investors treat hospitals like any other asset they can hold, flip, or shed once they’re too debt-ridden to function. 

“It’s bankruptcy for profit,” said Eileen Appelbaum, an economist and co-director of the Center for Economic and Policy Research who has studied the industry for decades. “The leverage that these vultures have is that nobody else wants to own those rural hospitals.” 

While Appelbaum cautioned that she’s seen a few cases of private equity investors helping companies flourish, the conditions employees have reported at Randolph Health remind her of what she’s learned from researching Prospect Medical, a California-based former private-equity firm where Sarian and Spiegel both worked. Days before Prospect declared bankruptcy last year, a bipartisan U.S. Senate Budget Committee report found the firm overwhelmed its failing hospitals with debt to give executives big payouts.

“It’s bankruptcy for profit.”

Eileen Appelbaum, Center for Economic and Policy Research

Researchers have also found that patient care quality is likely to decline after a hospital is acquired by a private equity owner. Rosemary Batt, a professor at Cornell University’s School of Industrial and Labor Relations, compared some private equity health care operators to “slumlords” who extract revenue from properties without investing in their long-term success. 

These investors can also generally evade regulatory scrutiny because, unlike nonprofits and publicly traded companies, they don’t have to share their financial statements with the government or the public. But the stakes for the public are far higher when private equity gets involved in the operations of a hospital than in, say, those of a sandwich chain. 

“They’re virtually unregulated,” Batt said. “It takes years to catch up with these guys. And the federal government does not have the resources to go after every bad actor.” 

In Sarian’s view, his ventures save jobs and keep hospitals open that would have otherwise closed. “What do you want us to do? Shut the doors?” he told The Assembly. “I should be a hero.”

Sarian distanced himself from the private equity label and disagreed that his companies have followed a similar strategy. He said the financial difficulties his facilities face are normal for rural hospitals, and that he feels discriminated against as an Armenian immigrant whom cynics have unfairly singled out: “This constant nagging against us, it’s just really pissing me off.” 

He acknowledged the hospital has had issues with vendor payments and may have had a “tough time just for a month” in July or August, but said “we’re all current” now and “there’s no shortage of any form or any type.”

The employees who spoke to The Assembly, he said, are just disgruntled. 

“They can go somewhere else. Very simple. It’s a free country,” he said. “We’re not forcing them to work there. If you’re not happy with your job, quit your job.”

Paychecks and Balances

If employees at Randolph weren’t already on edge over supply shortages, this summer’s benefits debacle was a jolt. 

Randolph administrators emailed staff in June to say their health insurance would be changing on August 1, but the new plan would “closely align” with their current coverage. According to records disclosed in a related lawsuit, UnitedHealthcare dropped the hospital’s parent company on July 31 for defaulting on its contract. 

Employees said that when they tried to use their new plan to pay for medical care, they were disturbed to learn how paltry its coverage was. 

In emails, hospital administrators told employees to bring their medical bills to the human resources department and to visit the hospital’s emergency room for urgent issues. Spiegel, who said he was asked to pay $15,000 upfront for his colonoscopy, acknowledged the insurance switch was a “fiasco.” 

On September 2, Randolph administrators assured employees the hospital had secured a new insurance partner to restore coverage.

“We’re hiring as much as we can. The thing with the insurance didn’t help.”

Kevin Spiegel, Randolph Health CEO

The health care snafu prompted employees to look more closely at their paychecks and retirement statements. They realized that for at least three pay periods in July and August, the hospital deducted their retirement contributions as usual but didn’t transfer them to their brokerage. The hospital has since caught up on those payments.

That discrepancy spooked some employees enough to quit. Several current employees say increased turnover among nurses and doctors has left many departments short-staffed, worsening operational concerns. But Spiegel, the CEO, denied the recent churn was exceptional. “We’re hiring as much as we can,” he told The Assembly. “The thing with the insurance didn’t help during those months, but it’s coming back now.”

In recent weeks, he and his team have tried to assure staff that things are fine. At a tense, crowded hospital town hall on September 16, leaders highlighted plans to raise pay, expand services, upgrade Randolph’s trauma-level status, funnel more ambulances to their emergency department, and become a certified stroke center. 

Employees said they left the meeting incredulous, given that the hospital seems to be struggling with its existing bills. “They’re fairyland goals,” one said.

The executives gave The Assembly the same recovery pitch during an interview and tour. 

“We have the experience, we have the wherewithal to do it, and we have the resources to make it happen,” Spiegel said. “That is our goal, and we’re not going to stop until we get there.”

Supply shortages and credit holds are in the past, they said, thanks in part to beefed-up state Medicaid reimbursement rates. They also touted an incoming team of traveling doctors they recruited through an arrangement that gives physicians flexibility and local housing, letting smaller hospitals benefit from talent they otherwise couldn’t attract.

Randolph’s executives blame the hospital’s troubles on American Healthcare Systems’ former chief legal officer, Faisal Gill, and former medical director, Aramais Paronyan. The two ousted Sarian from leadership of all three companies earlier this year, alleging that he had steered fraudulent transfers to personal bank accounts. 

But while the three still worked together, they coordinated a hefty executive payout as their Illinois hospitals were in apparent crisis, according to state and court records. Gill emailed Illinois health officials ahead of the July 4 holiday in 2024, begging for a $10 million advance: “We really need to have money to make payroll.” He got it, and the following month, the three executives signed an agreement to pay minority owner Paronyan $8.2 million, with most of it scheduled to be wired the same day. 

Sarian said those two financial transfers “were totally unrelated” because they concerned different legal entities and Paronyan, as a shareholder, was “entitled to” the distribution.

As of last month, the firm hadn’t repaid the state of Illinois. 

With the executives now fractured, Sarian officially regained control of American Healthcare Systems and Randolph Health in May through a court order. He maintains that some of his contested withdrawals were to repay money he personally loaned the hospital to cover payroll shortfalls, as well as his deferred $2 million annual salary. 

Randolph hospital executives defended Sarian, saying he can run his hospitals as he sees fit. “If Mike owns them, this is his money,” Spiegel said. “How could it be fraudulent?”

Patient Safety Concerns

Four Randolph employees told The Assembly that they’ve treated patients in recent months who should have been sent to hospitals with more supplies, staff, and expertise. 

Staffing problems at other American Healthcare Systems hospitals have led to lapses in care. At Vista Medical Center East in Illinois, a 28-year-old patient died from hypothermia on the roof in January 2025, when temperatures were below freezing. She was found wearing only her hospital gown. Weeks earlier, the hospital cut staff and “sitters,” non-medical employees who supervise patients. 

Hospital executives have denied responsibility. “We’re confident that the way the staff handled the situation was 100% appropriate,” Spiegel, who was Vista’s CEO at the time, said at a news conference. 

Last month, some Vista employees’ paychecks bounced, the Lake and McHenry County Scanner reported. 

Payroll was also days late at the firm’s other Illinois hospital, Gateway Regional Medical Center, in July and August. Unsure who would show up for work, Gateway leaders diverted ambulance traffic on July 31, including a patient in active cardiac arrest who was five minutes out when he was rerouted to a facility 15 miles away. 

In May, one of Sarian’s spin-off companies, Healthcare Systems of America, abruptly closed the labor and delivery unit at The Medical Center of Southeast Texas in Port Arthur, which forced emergency department physicians to deliver five babies, one of whom was premature. The babies and their mothers waited hours to be transferred, according to a lawsuit filed by a medical staffing firm. 

The suit also claims emergency department staff had to track down epinephrine at a local pharmacy after the hospital ran out, in order to resuscitate a patient at St. Joseph’s Medical Center in Houston. Another patient nearly hanged himself during a staffing shortage, according to the suit.

Michael Duong, who served as chief financial officer for Randolph Health and also oversaw American Healthcare Systems’ finances, filed a lawsuit under California’s whistleblower protection laws in July, alleging he was fired less than two days after emailing Sarian and other executives about financial concerns in November 2025. Duong alleges the company fraudulently concealed information from lenders and was “systematically sweeping” funds from local hospitals, leaving them unable to pay for supplies. 

Duong’s attorney, Ilya Filmus, said no state or federal regulators have questioned his client. “Regulatory agencies should care,” Filmus said. “Prosecutors should care.”

Sarian told The Assembly that employees who have questioned the firms’ accounting practices are out of line. “Why would any employee have a right to say, ‘Oh, you cannot trust the money?’” he said. “It’s not your business, man.”

Where Are the Regulators?

As Randolph’s employees grew more alarmed this summer, they scrambled to alert regulators. Several say they have called the state Department of Labor, the Department of Justice, the Auditor, and the county, asking for help. One employee, who said some regulators referred her complaints to different agencies, said it felt like “hot potato.”

Several stakeholders are likewise aghast that Sarian’s companies haven’t yet seen more aggressive federal or state-level regulatory scrutiny. 

In August, U.S. Rep. Nikki Budzinski (D-Ill.) raised concerns, while two Republican state lawmakers separately asked the U.S. Department of Justice to open a criminal inquiry into the potential misuse of public funds. Sarian told The Assembly that no agency investigators have contacted him, and he claimed the lawmakers already withdrew their request. 

But a representative for the Illinois Senate Republican caucus told The Assembly the request remains open. 

Four North Carolina lawmakers representing Randolph County did not respond to The Assembly’s repeated requests for comment: Republican Reps. Brian Biggs and Neal Jackson, and Sens. David Craven Jr. and Amy Galey.

State House Democratic Leader Rep. Robert Reives, whose district includes part of Randolph County, said in a statement that concerns about the operations at Randolph Health “deserve to be heard.”

William Kropkof, a former U.S. Department of Labor investigator, said companies have three days to transfer employees’ retirement contributions or risk civil or criminal penalties, even if the businesses eventually put the money back. Speaking generally, not specifically about Randolph Health, Kropkof said the lapse of multiple benefits should put employees on high alert. “I’d be looking for another job,” he said. 

Sarian said the hospital has since caught up on transferring the deposits to employees’ retirement accounts. “Nobody lost a penny,” he said. “Maybe it could have been quicker, but as long as we paid it, I don’t understand the issue.”

A spokesperson for the U.S. Department of Labor said it can’t confirm or deny whether it’s opened an investigation. John Wesley Waugh, a representative of the North Carolina Department of Labor, said in a statement that the benefits issue at Randolph Health “has been resolved.” 

A spokesperson for the North Carolina Department of Health and Human Services said Tuesday it could not locate any records relating to concerns with the hospital.

“I’d be looking for another job.”

William Kropkof, former Department of Labor investigator

In nearby Seagrove, a community of fewer than 500 residents best known for its pottery, Randolph County Commissioner Hope Haywood co-owns a strip mall that American Healthcare Systems rents as a primary care office. The firm is routinely a few months behind on rent, she said, but has recently caught up. 

Weighing the turmoil the company has caused the hospital’s employees, Haywood’s voice cracked. “It’s hard to even talk about,” she said. “They’re the ones that are keeping it going, and they are getting shafted.” 

After The Assembly published its first story about concerns at the hospital, the company resurrected its hospital board in August, which has six seats for local community members. 

Asheboro Councilmember Mary Joan Pugh, who was appointed to the board, said members had to sign nondisclosure agreements to participate.

She said she’s lost confidence in Sarian, but remains optimistic the hospital can navigate the crisis if Spiegel, the local CEO who started in June, is given autonomy. “I think we ought to give him a chance,” she said. “The right thing to do is support him, not just go to meetings and haggle him over this and haggle him over that.”

Under the terms of the county’s loan, the firm must share quarterly financial statements, but the county says it never has. Spiegel claimed he shared audited financial statements with the board last month. Both Pugh and Asheboro City Manager Donald Duncan, who also sits on the board, said he did not. 

“I have not seen anything that I would call a financial statement,” Duncan said.