Blast from the Anechoic Past: Former UCI Fertility Doctor Arrested in Mexico

Soon after we started Health Care Renewal, we ran a series of posts about the University of California-Irvine (UCI) medical school and medical center, featuring stories of mismanagement of major programs, especially those involving organ transplantation (liver, kidney, and bone marrow) while the top executives who presided over the mess received generous compensation, sometimes in strikingly irregular ways, and while at least one whistle-blower alleged he lost his job for complaining about safety issues.  Some of the stories went back another 10 years, to 1995.  One particularly striking story involved the UCI infertility program.  Three physicians were accused of stealing ova from some women to implant in others.  One physician was convicted, and two fled the country (see post here).

One of those physicians just turned up.  As reported by ABC News at the end of 2010:

U.S. authorities are working to extradite one of the doctors accused of being behind of the biggest fertility scandals in history. Mexican authorities arrested Dr. Ricardo Asch last month.

Back in the 1990s, Asch and another fertility doctor, Jose Balmaceda, were charged with stealing embryos and eggs belonging to dozens of women who sought treatment at the University of California-Irvine Center for Reproductive Health and implanting them into other women.

They are also accused of not reporting more than $1 million in earnings, and fleeing the country to avoid prosecution.

Marla McCutcheon is one of the women who says she was victimized by Asch. She was one of his patients until she decided to switch physicians because she said she found him 'uncaring.'

McCutcheon, from Irvine, Calif., says she found out years later that after she'd left Asch's care that there were leftover eggs she didn't know about. To this day, she doesn't know what happened to those eggs.

'I would have done anything for those eggs at that time. It's still hard for me to grasp that there might be something to my eggs. Someone may have been able to get pregnant from them,' McCutcheon said.

At the time of the scandal, ABC News saw documents showing that more than 60 other women who were patients at the fertility center had eggs taken from them without their consent. Asch, however, said he knew nothing about it. During the time the incidents occurred, it was not illegal to transfer human tissue without consent.

The case had major repercussions for how fertility clinics operate:

The scandal allegedly involving Asch, Balmaceda and another doctor, Sergio Stone, rocked the field of reproductive medicine, and doctors say they still feel its effects.

'Reproductive medicine is very new. It's come a long way and we've made tremendous progress, but because of scientific advances, it's very high-profile,' said Dr. Jani Jensen, a Mayo Clinic reproductive endocrinologist in Rochester, Minn. 'Whenever there are publicized incidents like this that involve ethical issues, it's sometimes difficult to engender the public's trust.'

Dr. Howard Zacur, director of the Division of Reproductive Endocrinology and Infertility at the Johns Hopkins Fertility Center in Baltimore, Md., said patients still want reassurance their eggs and embryos will be protected from these types of incidents.

It is now against the law in California to take eggs from a woman without her consent.

Note that the disconnect between problematic quality of care at UCI and the generous compensation afforded its top leaders continued through 2010, as this post discussed.

Aside from its colorfulness, there are other reasons to recall the story of the stolen ova and the subsequent troubles at UCI.  First, the list of problems over 15 years discussed in our series of posts suggests an institution whose leadership culture is seriously disturbed.  I cannot view the institution from a distance and figure out what the fundamental problems are with its leadership and governance, but there must be some.  (Note that per a 2006 post, an internal report did fault lack of accountability, leadership by people with no medical background, absence of clear reporting lines, and the overlooking of whistleblowers, but these are just descriptions of bad management and governance, not explanations of them.  Furthermore, it is not clear whether there have been any fundamental changes in leadership or governance since then.  If there readers know there is more to this, please let me know in the comments section below.)

Second, this case illustrates how the anechoic effect has decreased recognition that the problems at UCI may be part of more systemic problems.  Despite the number of problems that occurred, their vividness, and their coverage in local media, the troubles at UCI have not gotten national media attention, nor as far as I can tell, have they ever been discussed in the medical, health care, health services research, or health policy literature.  (I have tried multiple Google scholar searches using the institution's name, and keywords including "scandal," and the names of some of the physicians most prominently named in our series of posts, and have found nothing relevant.)  The 15 year history has produced almost no echoes, and hence now has become as striking a black hole in the annals of bad health care leadership and governance as was the case of the fall of the Allegheny Health Education and Research Foundation (AHERF). 

Certain issues that we discuss on Health Care Renewal have become less anechoic, in particular, conflicts of interest caused by academic physicians financial ties to the drug, biotechnology and device industries.  However, the larger issues of mismanagement by lavishly compensated, and hence perversely incentivized executives remains relatively anechoic.  I am not sure how big a scandal it will take to remove the taboo from discussing it. 

Post Title → Blast from the Anechoic Past: Former UCI Fertility Doctor Arrested in Mexico

Some Call it "Tyranny" - Top Leaders of University of California (Including Leaders of Academic Medicine) Demand Bigger Pensions for Themselves

The state of California, and its flagship university system, the University of California, have been under extreme financial pressure lately. 

The 36 Executives' Demands

However, that apparently has not decreased the University's hired managers' and executives' sense of entitlement.  They are threatening to sue if their pensions are not increased.  As reported by the San Francisco Chronicle,

Three dozen of the University of California's highest-paid executives are threatening to sue unless UC agrees to spend tens of millions of dollars to dramatically increase retirement benefits for employees earning more than $245,000.

'We believe it is the University's legal, moral and ethical obligation' to increase the benefits, the executives wrote the Board of Regents in a Dec. 9 letter and position paper obtained by The Chronicle.

'Failure to do so will likely result in a costly and unsuccessful legal confrontation,' they wrote, using capital letters to emphasize that they were writing 'URGENTLY.'

Their demand comes as UC is trying to eliminate a vast, $21.6 billion unfunded pension obligation by reducing benefits for future employees, raising the retirement age, requiring employees to pay more into UC's pension fund and boosting tuition.

The fatter executive retirement benefits the employees are seeking would add $5.5 million a year to the pension liability, UC has estimated, plus $51 million more to make the changes retroactive to 2007, as the executives are demanding.

The executives fashioned their demand as a direct challenge to UC President Mark Yudof, who opposes the increase.

'Forcing resolution in the courts will put 200 of the University's most senior, most visible current and former executives and faculty leaders in public contention with the President and the Board,' they wrote.

Background to the Case
Here is the relevant background:

The roots of the pension dispute go back to 1999, five years after the IRS limited how much compensation could be included in retirement package calculations. But even after the IRS granted UC's waiver in 2007, nothing changed.

University executives were having troubles of their own that year.

President Robert Dynes resigned in 2007 after it was discovered that UC was awarding secret bonuses, perks and extra pay to executives. State auditors also found that UC's compensation practices were riddled with errors and policy violations.

UC officials also had become aware of another big problem: UC's pension obligations were about to outstrip its ability to pay retirees. Neither UC nor its employees had paid into the fund since 1990.

It took until this year for UC to act. In September, a retirement task force offered Yudof several options for closing the $21.6 billion gap - and one to widen it: increasing executive pensions.

Health Care Executives Included

Note that in addition to a bunch of finance officers and portfolio and asset managers, the demanding executives included quite a few leaders of the medical schools, and academic medical centers, including:

UC System's Central Office
Dr. Jack Stobo, senior vice president, health services and affairs

UCSF
Dr. Sam Hawgood, vice chancellor and dean, School of Medicine
Ken Jones, chief operating officer, medical center
Mark Laret, CEO, medical center
Larry Lotenero chief information officer, medical center
John Plotts, senior vice chancellor

UC Davis
William McGowan, CFO, health system
Dr. Claire Pomeroy, CEO health system, vice chancellor/dean, School of Medicine
Ann Madden Rice, CEO Medical Center

UCLA
Dr. David Feinberg, CEO of the hospital system; associate vice chancellor
Dr. Gerald Levey, dean emeritus
Virginia McFerran, chief information officer of the health system
Amir Dan Rubin, chief operating officer of the hospital system
Dr. J. Thomas Rosenthal, chief medical officer of the hospital system; associate vice chancellor
Paul Staton, chief financial officer of the hospital system

UC San Diego
Dr. David Brenner, vice chancellor for health sciences; dean of the School of Medicine
Tom Jackiewicz, CEO, associate vice chancellor of the health system
Dr. Thomas McAfee, dean for clinical affairs

UC Irvine
Terry Belmont, CEO, Medical Center

The Outraged Reaction
The executives' demands sparked anger on campus.

Dissenting members of the task force said it would be unseemly' to expand executive pensions. Tuition had just been increased by 32 percent this fall, and the regents were poised to raise it another 8 percent for fall 2011. They also voted to shift more money into the retirement fund from employees' pockets, as low-wage workers worried about retiring into poverty.

'I think it's pretty outrageous that this group of highly compensated administrators of a public university are challenging the president and the chair of the Board of Regents, said Daniel Simmons, chairman of UC's Academic Senate and a law professor at UC Davis.

'What outrages me the most is that these 36 people are blind to the fact that this is a public entity in dire straits,' said Simmons, who also served on the retirement task force and opposed the higher pensions.

The demands prompted outrage from politicians and editorialists. A few choice samples:

- The executives are "tarnishing the university's name with greed," editorial (UCLA) Daily Bruin.

- "Very out of touch," by Governor Elect Jerry Brown; "truly living in an ivory tower...." while "people are suffering in the rest of the state and losing their homes," by Assemblyman Jerry Hill, D- San Mateo (per the San Francisco Chronicle)

- "Uncaring and divisive," "undercuts public support for one of California's most treasured institutions," "sending out its own special-interest message: what's in it for me," - editorial, San Francisco Chronicle.

- "despicable threat," the California Regents (UC board of trustees) should not "claim that lavish pension may be needed to recruit good people to UC. Good people don't threaten lawsuits against a cash-strapped sate to enrich themselves." editorial, Sacramento Bee.

- Governor-Elect B4rown should issue an executive order "to eliminate any position in the University of California system paying $245,000 a year or more," (thus effectively firing all the 36 complaining executives); "free taxpayers and students alike from the tyranny of those whose main objective during any time - tough or otherwise - is to keep milking the state for every penny the can squeeze out," editorial, Manteca Bulletin.

Summary

We have posted frequently about hired managers and executives of health care organizations receiving compensation and benefits out of all proportion to their apparent performance. The case of the demanding University of California executives is just one of many. However, what is really remarkable about this case is the reaction to it. We are hearing top leaders, including many of the top leaders of the state's medical schools and academic medical centers, called uncaring, greedy, and despicable by well-known politicians and in newspaper editorials, and we are hearing calls that they be fired, en masse.

Maybe we are at a tipping point.

Of course, hired health care managers and executives are not entitled to line their own pockets while patients and their other constituencies suffer during the great recession. They are not entitled to continually drive health care costs up while they enrich themselves.

However, apathy, learned helplessness, and the anechoic effect have let them promote themselves into a de facto new aristocracy (just like the hired managers and executives of some other non-profit organizations, for-profit corporations, and especially financial service corporations have turned themselves into the rest of that aristocracy.)

If we do not reclaim health care from these new oligarchs, we will all end up not just with expensive, difficult to access, mediocre health care, but under their tyranny.

Post-Script

This is just the latest example of the sense of entitlement displayed by the hired managers and executives of the University of California. Outrageous pay and benefits unjustified by any measure of performance for University of California's hired managers and executives has been grist for the Health Care Renewal mill since 2005.  A few samples:
-  The ranks of those paid more than $200 K rose much faster than those paid less, while lower paid employees endured a pay freeze, and the university cut its budget.  Managers got bonuses for extra work, while faculty did not.  Managers got housing allowances, and other perks.  (November, 2005) 
- UC-Irvine managers were paid lavishly while presiding over debacles involving transplant services  (liver transplants, November, 2005; bone marrow transplants, January, 2006; kidney transplants, January, 2006)
- UC - San Diego Chancellor was paid $359 K plus a bonus of $248 K for supposed full time work while serving on ten for-profit corporate and non-profit boards, including directorships of for-profit health care corporations that were conflicts of interest with her role overseeing the medical school and medical center.  This was the first case of what we later called the "new species of conflicts of interest" posted on the blog.  (January, 2006)
- UC - Irvine managers got bonuses while its medical center failed an inspection (January, 2010), as did managers at other UC campuses (January, 2010).

Maybe if these older stories produced more outraged, the current situation would not have occurred.

You heard it first on Health Care Renewal

Hat tip to Prof Margaret Soltan on the University Diaries blog.

Post Title → Some Call it "Tyranny" - Top Leaders of University of California (Including Leaders of Academic Medicine) Demand Bigger Pensions for Themselves

UCI Medical Center Fails Inspection, UCI Executives Get Bonuses

Back in the early days of Health Care Renewal, we had many occasions to write about problems with the leadership of the University of California - Irvine (UCI) medical school.  Starting in late 2005, we posted  about various management problems at the institution, involving its liver transplant service, cardiology division, and bone marrow transplant service, (see posts here and here) which lead the new chancellor of the campus to "acknowledge a failure of leadership and accountability" (see post here.) Slightly more recently, we noted the almost 20 year history of questionable financial relationships that involved one of UCI's "biggest stars" in clinical researach and several pharmaceutical companies (see post here).  Then, in 2007, we wrote about some strange contracting practices involving UCI and a local orthopedic practice (see post here).

So it was deja vu all over again when last week the Los Angeles Times reported about the latest batch of problems at UC Irvine Medical Center:

Federal investigators found scores of problems at UC Irvine Medical Center during a fall inspection that again put the troubled hospital's Medicare funding at risk, according to report released Thursday.

In an 85-page report on their surprise October inspection, regulators said they observed poor oversight and mistakes by UCI doctors, nurses and pharmacists, leading to inadequate care that in some cases harmed patients.

Among the findings:

* An 82-year-old man was mistakenly given a narcotic patch by a medical resident, without approval of doctors or pharmacists. The patch led to an overdose that required emergency intervention and may have contributed to his death a week later.

* A patient in the neuropsychiatric unit fell twice in three days and despite yelling 'Help me, doctor, help me,' suffered a head injury and had to be taken to intensive care.

* An on-call resident did not respond to repeated emergency pages from nurses in the neurological intensive care unit, where a patient with an irregular heartbeat languished for more than an hour.

* Pharmacists failed to monitor and store drugs correctly, allowing nurses to carry narcotics in their pockets and inject patients without proper oversight.

The report comes a year after investigators from the Centers for Medicare and Medicaid Services documented repeated examples of poor oversight at the hospital and threatened to cut Medicare funding.

In July, Medicare officials issued a finding of immediate jeopardy after investigators discovered that five UCI patients had received overdoses because nurses using pain medication pumps were not properly trained. UCI officials immediately began training nurses to use the pumps, the finding was lifted within 24 hours and the hospital submitted a plan of correction.

However, the 2010 continuation of the sad tale of UCI adds an interesting contrast.

UCI nurses said Thursday that many of the latest problems stem from understaffing and other cost-cutting, even as the facility turned a $54.2-million profit last year and the chief executive earned an $83,250 bonus.

'This is a problem of money. To provide extra training, extra staffing, is money,' said Beth Kean, California Nursing Assn. director for UC nurses, including 1,000 at UCI.

Terry A. Belmont, who took over as the hospital's chief executive last year, disputed that the facility was understaffed.

The new wrinkle in the UCI saga seems to be that now the leadership of UCI has been raking in bonuses while the mismanagement of the organization apparently continues.

Indeed, also last week several California newspapers reported on a series of bonuses granted to the top executives of the University of California system.  For example, per the Los Angeles Times,

The University of California regents Thursday approved the controversial payment of $3.1 million in performance bonuses to 38 senior executives at UC's five medical centers.

The regents emphasized that the payments were linked to improved patient health and stronger hospital finances and said they were important tools to attract and retain talent. They said the bonuses were part of a 16-year-old plan funded by hospital revenue, not state funds or student fees. An additional $33.7 million is distributed among 22,000 lower-ranking medical employees.

However, union activists denounced the executive bonuses as unconscionable as other parts of the university were coping with pay cuts and layoffs.

'This is appalling to do this when they are telling the lowest-paid workers to stay in poverty,' said Lakesha Harrison, president of the American Federation of State, County and Municipal Employees Local 3299, which represents about 20,000 UC workers, including hospital technicians and campus custodians.

Some of the union's members get bonuses of about $300 a year, Harrison said. In contrast, the payments to the 38 senior managers range from about $30,100 to nearly $219,000.

The incentives were awarded after the UC medical center system met such targets as reducing catheter-related infections and saving money through group purchases of supplies, officials said.

Among the payments approved Thursday by the regents in San Francisco were $218,728 to UCLA Medical Center Chief Executive David Feinberg, on top of his $739,695 base salary; $181,227 to UC San Francisco medical center Chief Executive Mark Laret, on top of $739,700 in pay; and $87,000, in addition to his $580,000 salary, for John Stobo, the UC system's senior vice president for health sciences.

Corroborating the assertion that the bonus plan is not new is a document that lists executive compensation at the University of California in 2008. (2009 data does not yet seem to be available on the web.) This document noted the following bonuses paid to University of California - Irvine medical leaders in 2008:
- Susan J Rayburn, Executive Director of Clinical Enterprise - Base Salary= $212,700, Bonus=$28,401
- Lisa M Reiser, Chief Patient Care Services Officer - $243,000, $26,507
- Eugene Spiritus, Chief Medical Officer - $310,000, $38,373
- Patricia D Thatcher, Executive Director - HR and Customer Service, Medical Center - $197,547, $17,542
- Cynthia A Winner, Chief Ambulatory Care Officer - $238,200, $24,371
- Maureen L Zehntner, Associate Vice Chancellor/ Chief Executive Officer, Medical Center - $555,000, $74,432

Note that Dr Spiritus, the Chief Medical Officer, did not mention that he was a 2008 bonus recipient when he defended bonuses given to UCI leaders in the LA Times article,

'Everybody's fallible. We just have to make sure we have the right processes in place' to catch errors, said Dr. Eugene Spiritus, UCI Medical Center's chief medical officer.

Spiritus also defended the compensation for hospital managers, saying they need to stay competitive in order to attract and keep talented managers, especially given the cost of living in California.

F Scott Fitzgerald wrote, "the very rich are different from you and me."  These days, it is executives and managers who are very different from you and me. 

Physicians are beginning to dread the notion of "pay for performance," which may mean tiny increases in fees paid to physicians who uncritically follow wooden-headed guidelines based on over-simplified notions of disease, poor measurement schemes, and manipulated and suppressed clinical data. 

However, for health care organization executives, "pay for performance" seems to mean lavish bonuses only tenuously related to any rational notion of performance.  In the example above, it seems that multiple UCI executives earned bonuses for their management of clinical affairs at the medical center in 2008, and at least the medical center CEO earned a bonus in 2009 for "improved patient health" while outside review of the medical center's performance in 2009 revealed "scores of problems" sufficient to threaten withdrawal of Medicare funding.  One wonders about the basis for all the millions in bonuses that have been paid to University of California executives over the years?

In fact, the executive "pay for performance" programs that started in the for-profit corporate world, and now are prevalent in not-for-profit health care organizations, seem to reflect the culture of executive entitlement now so prevalent in the US (and maybe most developed countries.)  First, executives claim credit for any improvements in their organizations, while the workers in the trenches who actually accomplished the improvements get chump change.  Second, when things go wrong, the workers face salary cuts and lay-offs, while the executives' total compensation never seems to go down. 

As we mentioned before, executive compensation in health care seems best described as Prof Mintzberg described compensation for finance CEOs, "All this compensation madness is not about markets or talents or incentives, but rather about insiders hijacking established institutions for their personal benefit." As it did in finance, compensation madness is likely to keep the health care bubble inflating until it bursts, with the expected adverse consequences. Meanwhile, I say again, if health care reformers really care about improving access and controlling costs, they will have to have the courage to confront the powerful and self-interested leaders who benefit so well from their previously mission-driven organizations.

Post Title → UCI Medical Center Fails Inspection, UCI Executives Get Bonuses

Strange Contracting at UCI

Well, it's been a while, but the medical school at the University of California - Irvine (UCI) is back in the news. We had posted last year about various management problems at the same institution, involving its liver transplant service, cardiology division, and bone marrow transplant service, (see posts here and here) which lead the new chancellor of the campus to "acknowledge a failure of leadership and accountability" (see post here.) Slightly more recently, we noted the almost 20 year history of questionable financial relationships that involved one of UCI's "biggest stars" in clinical researach and several pharmaceutical companies (see post here).
Last week, the Los Angeles Times reported about questionable relationships between the medical school and a local orthopedic practice.

UC Irvine's School of Medicine has hired an auditor to review the orthopedics department's finances in response to concerns about a contract with a private medical practice that has cost the school more than $1 million in lost revenue, UCI officials said.

The medical school entered into the contract with Mission Orthopedic Medical Associates and its well-known chief surgeon, Bernard Reimer, to help the school expand into the lucrative southern Orange County market, according to physicians in the orthopedics department.

But the contract immediately raised concerns among UCI's attorneys because of large sums paid up front to Reimer and his wife, Dawn, his office manager, which later triggered controversy within the department, according to UCI records obtained by The Times and interviews with UCI staff members.

'We are looking at things that don't make any fiscal sense,' said Dr. Ranjan Gupta, who took over as chairman of UCI's orthopedics department at the beginning of the year. 'I'm supposed to ensure that the university is giving the highest level of care and is getting the most for its money.'

The contract with Mission Orthopedic Medical Associates was negotiated in 2003 by Dr. Harry Skinner, then chairman of the orthopedics department, and Dr. Thomas Cesario, then dean of the medical school.

Skinner was forced to step down as department chairman in January. UCI had concluded he had made racially inappropriate comments to medical school employees. He remains on the faculty.

Cesario took early retirement late last year after an 11-year tenure marred by doctors stealing women's eggs and embryos, bodies missing from the medical school's willed-body program, and serious failings in the hospital's liver, kidney and bone marrow transplant programs.

In devising the contract with Mission Orthopedic, Skinner and Cesario agreed to cover part of the practice's overhead, pay Reimer's wife more than $100,000 to serve as its office manager, and give Reimer a place on the medical school faculty. In return, Reimer's patients would all be billed for their care through UCI Medical Center in Orange.

Both Reimer and his wife declined repeated requests for comment.

At the time the contract took effect, Reimer had been diagnosed with cancer and was working only part time, which enabled him to collect disability insurance payments, according to internal medical school e-mails and other records obtained by The Times.

He was eligible to receive insurance benefits as long as he earned no more than $100,800 a year, the UCI records show.

Skinner found ways to pay him for items other than salary to stay within that salary cap, the records show. For example, he agreed the university would pay Reimer and his wife $50,000 for attorney fees and an extra $10,000 a month for the first three months of his contract.

The Times also found that built into the overhead for the Mission Viejo office was a significant sum for Reimer's wife, the office manager. In addition to her $38,400 annual salary, Dawn Reimer received between $6,000 and $7,500 a month from UCI in additional payments described as 'general expenses,' the records show. As a result, UCI paid Dawn Reimer about $128,000 in 2005, more than what the school was paying her husband to treat patients, teach students and perform surgeries.

UCI's Credentials Committee placed Reimer on a list for "administrative termination" after noting that he had been on the faculty for more than a year without having been 'proctored,' a process in which a new faculty member's work is reviewed by a senior staff member.

The deal with Mission Orthopedic has been so expensive for the hospital that costs far exceed revenues from Reimer's patients, according to financial records reviewed by The Times.

As of the end of December, the losses were more than $1.2 million on total revenues of about $4.5 million over the previous three years and three months.

When all the numbers are tallied, expenses are expected to outstrip revenues by more than $1.7 million through June 2007.

As I noted the last time I posted about UCI...

It seems the more one looks, the more management problems one finds at the UCI medical school. This saga is another example of the complex financial relationships that pervade medical schools and academic medical centers. This recently revealed set of relationships is not about research or the pharmaceutical industry. However, it seems to be another demonstration that far too many leaders of health care organizations, including medical schools and academic medical centers, seem to have something other than the organizations' core mission in mind when making decisons.

Post Title → Strange Contracting at UCI

Yet More Trouble in the OC - A Psychiatrist Gets Into the Act

I went away for a few days of vacation and all heck broke loose again. I will try to keep up with this and subsequent posts.

The Los Angeles Times reported a new story about complex relationships between a faculty member at the University of California - Irvine medical school and a variety of commercial firms. We had posted a few months ago about various management problems at the same institution, involving its liver transplant service, cardiology division, and bone marrow transplant service, (see posts here and here) which lead the new chancellor of the campus to "acknowledge a failure of leadership and accountability." (See post here.)

The Times focused on the actions over almost 20 years of Dr Steven G Potkin, Professor of Psychiatry and Human Behavior.

1989
“UCI investigated Potkin for the first time in 1989. Doctors there told administrators that Potkin was inappropriately billing Medi-Cal for patients in research trials. Bills submitted for patients in Potkin’s studies had been turned down three times by Medi-Cal....” One psychiatrist alleged that Potkin planned “to fool Medi-Cal into reimbursing the department for unauthorized expenditures.” Other affadavits alleged that Potkin “directed staff to keep two sets of records, disguising the names of the drugs that patients were receiving on the version made available to Medi-Cal.”

However, “UCI eventually launched an audit.” It found “ no improprieties. Interviewed by the Times, Potkin “denied the billings were inappropriate.”

1997

The Times reported that “in 20 of Potkin’s [research] studies, he arranged for drug companies to channel some funding directly to the firm Pacific Clinical Sutdies.... Pacific Clinical Studies was owned jointly, by Potkins brother Ralph, a pulmonary care doctor, and a trust in their parents’ names.” Then, “one Potkin client, Janssen, a drug firm in Titusville, N.J., became ‘increasingly uncomfortable with the payments it was making to PCS and stopped making them.... Janssen... was worried because of the arrangement’s similarity to a case in which the chairman of the psychiatry department at the Medical College of Georgia pleaded guilty to diverting research funds....” But again, “the UCI audit, completed in September, 1998, concluded that Potkin’s actions did not technically violate the university’s nepotism policy, since PCS got the money from the drug companies rather than from UCI. However, the audit suggested that PCS ‘may have been established’ to avoid paying university overhead....” Later, [UCI medical school Dean] Cesario and Fredric Wan, then vice chancellor for research, told Potkin that PCS could no longer work on clinical trials for the university. Potkin said in an interview that UCI knew about PCS’ involvement....” But a university spokesperson said that Potkin “did not reveal its [PCS’] ties to his family.”

2004
“In 2004, Potkin and psychiatry department co-chairman William E. ‘Biff’ Bunney applied to the university board that monitors human research to test an Alzheimer’s drug for Precis Pharmaceuticals, a small company in Waltham, Mass. The request was not immediately approved. The professors went ahead anyway, using a private company they had previously formed to conduct research at an assisted living facility.... The professors had a previously signed agreement with the university allowing them to consult on clinical trials through their company but no to work as principal investigators on a study through the firm.” Then, “Thomas Cesario, the dean of UC Irvien’s medical school, took swift action. In a Dec. 8, 2004, memo, Cesario told the psychiatrists that he had learned of their outside trial and that they were violating UCI policies. ‘We require this study be halted immediately until further notice,’ he wrote.’ In the interview, Potkin said he “moved the study out from under UCI’s auspices because of a shortage of psychiatry beds available for research.”

Even though Potkin’s research efforts were investigated three times in the last three decades, no one apparently discerned any pattern until the Times article. In fact, the Times article characterized Potkin as “one of UCI’s biggest stars. The 60-year old psychiatrist is among the university’s most prolific researchers. He brings in lucrative contracts from some of the world’s biggest drug companies and has presided over as many as a dozen clinical trials at a time. "

The Times reporter interviewed Dr Mike Samoszuk, a former pathology professor at UCI who now works for “the medical device industry of a drug company.” He opined that the “university’s thirst for research funding may have caused it to look the other way when ethical lapses were discovered. ‘Even though clinical research is a noble and worthy activity, it’s very easy to lose your moral compass if your primary goal is the dollar amount of grant funding that you generate.’....”

It seems the more one looks, the more management problems one finds at the UCI medical school.

This saga is another example of the complex financial relationships that pervade medical schools and academic medical centers. Such relationships raise concern about the degree that research going on at these institutions is unduly influenced by the financial interests of those who run it. It also increases skepticism about the extent that faculty and administration have become distracted from their academic mission and their professional values by the lure of easy money from industry, coupled with ongoing pressure from the university to bring in more "external funding."

If you are an academic physician getting such money, it is time to think about how much your reputation and your values are really worth. If you are an academic administrator who has been pushing your faculty to better “support their salaries,” no matter what the source, it is time to think about how much your institution’s reputation and values are worth. And it is time for all of us to wonder why academic medicine has become so focussed on making money, and figure out how it can become otherwise.

Post Title → Yet More Trouble in the OC - A Psychiatrist Gets Into the Act

Some Themes Emerge from the Problems at the University of California

Several recent reports help our understanding of the recent problems at the University of California - Irvine (UCI) medical center, and more broadly, in the University of California (UC) system. (See recent posts on UC here, and here, and on UCI here.)

The Los Angeles Times reported that "UC Irvine is beginning program-by-program reviews of its medical center, hiring consultants and launching its search for top health care officials, recommendations made by a panel of outside experts that reviewed the university's troubled medical programs." The new Chancellor, Michael V Drake, reiterated, "there was a 'failure of leadership and accountability' and poor oversight." Concretely, UCI is starting searches for a vice chancellor for health affairs and for a health care ombudsman "to make it easier for faculty and staff at the hospital to report problems. An interim ombudsman is working part time."

Perhaps some impetus will be added to these efforts by reports that the US Federal Bureau of Investigation (FBI) is investigating UCI ( also per the LA Times.) Meanwhile, the Ocean County Register published a long review of events at UCI. It first noted, "The residue for UCI is a hospital with a damaged reputation and low morale." David Magnus of the Stanford Center for Biomedical Ethics commented, "When you get that many problems, that speaks to a problem of institutional culture. There needs to be a pretty dramatic overhaul of that culture to proceed in an ethical fashion."

The history leading to the current problems was telling.

Until the early 1990s, UCI Medical Center's primary mission was to be the hospital that served Orange County's neediest residents. That was both a practical and historical remnant of a hospital that was founded in 1912 as Orange County Hospital and Poor Farm.

'Its image remained steeped in its history as Orange County's 'hospital of last resort.' Back then, a dedicated but underappreciated faculty and staff provided care exclusively for the county's poor and underserved in a tired and drab facility.' [said former CEO Ralph Cygan]
The nation's adoption of managed care as a medical-industry standard in the early 1990s threw UCI Medical Center and other hospitals into financial and operating crisis. For a time, UC officials considered leasing or selling UCI Medical Center to a private company.

That plan was abandoned in 1997. But all UC medical centers (including UC San Diego, UC Davis and UCLA) were ordered to bring in more middle-class patients with private insurance, reducing the hospital's reliance on government payouts for indigent patients.

Partly as a way to maintain its role serving the county's poorest residents, UCI worked to develop other ways to bring in more income.

In 1999, UCI spent six months drafting a new strategic plan for the medical school and hospital that sought to increase market share and research funding, and improve medical education, yet also cut costs. The new strategy called for UCI to start investing in "high-profile clinical programs with high potential for market impact, return on investment" and referrals.

Yet, while the hospital has rapidly expanded from a small operation into a giant, multi-tentacled enterprise, questions have arisen about whether oversight has kept up with growth.

Meanwhile, the San Francisco Chronicle reported the assessment of a task force on how UC compensated its leadership across the system. It concluded, "The recent disclosures ... lead (us) to conclude that, at least as regards compensation, neither the executives who lead the university nor the regents who oversee it have done all they could or should to fulfill their respective or shared responsibilities." Former state Assembly Speaker Robert Hertzberg, co-chair of the task force, said, "In this competitive environment where you want to bring in the best and the brightest, there was just a breakdown in terms of full disclosure. But it was a significant breakdown."

Putting this all together, there seem to be some themes:

• A leadership culture that "lacked accountability" seemed to be a problem across the UC system, and at UCI in particular.
• Despite demoralization induced by this leadership culture, faculty, physicians, staff, and students generally tried to do their best in trying circumstance.
• The leadership culture may have to some extent derived from a broad impetus within society to push not-for-profit, academic institutions to "compete."
• Making things better will require major improvements in leaderships' accountabilty and transparency.

These are familiar themes on Health Care Renewal.

Post Title → Some Themes Emerge from the Problems at the University of California

"UCI, Heal Thyself"

A Los Angeles Times editorial (entitled, "UCI, Heal Thyself"), called for the ouster of the Dean of the University of California - Irvine medical school in response to the ongoing difficulties at the institution. (We have posted frequently about UCI, most recently here.)

I will just quote from the editorial:

UC IRVINE SHOULD BE commended for moving quickly to investigate the many patient-care problems at its scandal-plagued medical center — and for getting rid of one of those responsible, Dr. Ralph Cygan, the former chief executive. But now the university must follow up with stronger measures to assure patients and taxpayers that this wayward hospital can still be saved. And the first essential step on the road to recovery is firing the medical school dean, Dr. Thomas C. Cesario.

Cesario has been in charge of the medical school during more than a decade of scandals at UCI Medical Center: the theft of patients' eggs and embryos, the illegal billing of patients for experimental drugs, the improper sale of cadavers, the liver transplant program that recruited new patients while turning down livers because it didn't have a doctor to transplant them. Need we go on?

The first few embarrassments might have been blamed on some rogue doctors, but when there is trouble in department after department, year after year, there's a systemic problem. Regardless of whether Cesario helped create this atmosphere or simply was too inept a manager to recognize and change it, he should no longer be in charge.

UCI Medical Center's managers were so busy thinking about how to make their teaching hospital the next UCLA or Stanford, they overlooked basic patient care. They were so intent on keeping up a good reputation, they ignored or punished whistle-blowers.

There seems to be growing public recognition of the problems of mismanagement of large health care organizations, at least at the local level.

It is still discouraging that this story has not receive much notice in the media outside of California (and as far as I can tell has received no notice in medical, health care, and health policy journals).

Post Title → "UCI, Heal Thyself"

Mismanagement in the OC - the Report on UCI

We most recently posted on the trouble at University of California - Irvine (UCI) here. Now new information has come out about mismanagement at UCI. An independent report commissioned by the university that focused on the now closed liver transplant program. Per the Orange County Register and Los Angeles Times, the report found

• "Throughout its review, the committee observed a general lack of accountability within the medical school and from an overall campus perspective. The committee observed a laisssez-faire attitude toward many of the red flag issues that ultimately led to the closure of the (liver) program."
• According to the Register, the committee also "faulted an organizational structure that left a power vacuum at the top, with no medically trained individual responsible for both the school and the hospital."
• Again according to the Register, "the absence of clear reporting lines and strong management oversight were contributing factors" not only in the failure of the liver transplant program, but in the 1995 fertility clinic and 1999 donated organ program scandals.
• UCI leaders made statements "that were not wholly accurate and likely misleading."
• Whistle-blowers were ignored, "legitimate complaints of people were not necessarily addressed in an appropriate way."

Meanwhile, the Los Angeles Times reported that the United Network for Organ Sharing (UNOS) decided to put the UCI kidney transplant program on probation, noting that "the need for the institution to implement changes is evident."
Meanwhile, the Times reported an echo from one of the earlier scandals at UCI. In 1995, two UCI fertility experts, Dr Ricardo Asch and Dr Jose Balmaceda, were accused of extracting eggs and embryos of patients without their permission, and implanting them in other patients who were told that they had been freely donated. Both Asch and Balmaceda fled the US. Asch is apparently now living in Argentina, ina a "chalet surrounded by security guards 24 hours a day in an affluent neighborhood in Buenos Aires." An Assistant US Attorney who handled the case said, "it is my great hope these guys will be brought to justice before I retire."
Again, these findings should be contrasted with claims by members of the UC board of regents that their justification for providing top managers with high salaries and a variety of generous perks and benefits was to attract the very top people (see post here). Maybe the people who demand the highest pay, benefits, and perks are actually less fit to not-for-profit health care institutions.

Post Title → Mismanagement in the OC - the Report on UCI

Trouble in the OC Continues - More on UC-Irvine

The University of California - Irvine just cannot stay out of the news. We last posted about the multiple problems at the UCI medical school and medical center here.

More Revelations About Previously Revealed Problems

The Los Angeles Times dug into some of the older scandals at UCI. These included the “fertility scandal,” in which doctors “had stolen eggs and embryos from women and implanted them in other patients,” “misplaced cadavers, the sale of cadaver body parts without consent, and research violations at Chao Cancer Clinic.” In these scandals, the Times revealed a pattern of managers trying to stifle complaints and intimidate whistle-blowers. Regarding the fertility scandal,

Whistle-blower complaints, state Senate committee hearings and internal
investigations exposed UCI's efforts to limit the investigation and punish those who
reported problems. It was a pattern that would be repeated.
Whistle-blowers said they were warned not to talk publicly and threatened with dismissal.
Three whistle-blowers were paid a total of $900,000 in settlements that required them not to talk about the fertility clinic problems.
'They threatened me not to go to the federal or state government, not to go to the press,' former senior hospital administrator Debra Krahel said. 'They threatened that they would sue me. They go through this pattern of alienating, discrediting, demoting and threatening you.
It's pure harassment, and they've done it over and over. It's never been corrected.'
UCI's attorneys repeatedly tried to limit investigations and public release of information, former employees said.
Andrew Yeilding, at the time UCI's chief auditor, was widely quoted as saying that Diane Geocaris, legal counsel to the chancellor, told him he should not press doctors hard for information. Other administrators told three internal auditors not to set foot on hospital grounds- or even exit the freeway near the Orange facility - or they would face termination, according to depositions and interviews.
In several cases, public comments by administrators were misleading and, occasionally, false. Geocaris, who remains the chancellor's legal counsel, urged the spokeswoman for the hospital, who later quit in frustration, to delay release of records as long as legally possible, according to reports in the Orange County Register.
University attorneys also minimized the number of victims and filed court documents that contained false information
In most of the scandals that have beset the university, employees who tried to uncover wrongdoing suffered consequences.
Several former employees said they had been forced to quit or were fired. Some, like Krahel, said they were labeled troublemakers, portrayed as frequent complainers or deemed substandard workers.
UCI auditors Robert Chatwin and Hebeish, whose jobs were to investigate complaints and scrutinize university programs, said the attitude on campus changed after the fertility scandal. The work environment evolved from 'free, open and supportive' to 'completely hostile and negative,' Chatwin said in a deposition as part of later litigation over UCI's Willed Body Program.
UCI touted a massive overhaul of the program. It hired Iris Ingram as the administrator to provide oversight and ensure that rules were followed. But Ingram said in an interview that people resented her when she tried to enforce regulations. Once UCI was 'in the clear,' she said, her position was eliminated.

The Orange County Register summarized a series of instances in which UCI managers issued misleading statements or “misrepresentations.” The article includes a handy table of six different misrepresentations, which includes the original statements and UCI sources, their refutations and their sources. In its introduction, the article quoted David Magnus, of the Stanford Center for Biomedical Ethics,

If a car company makes a misleading statement about how great a car is, that’s called sales. If a hospital does it, its more like fraud.

We last discussed allegations of problems within the UCI anesthesiology department here. The previously discussed allegations that the leadership of the UCI cardiology division lacked the usual credentials. The Orange County Register reported that its Associate Chief is stepping down from his leadership position as a result. The official announcement was “Dr. [Mani] Vannan has stepped down in an effort to help unify the Division of Cardiology. We appreciate his cooperation with this effort.”

Vannan has no California medical license, and has no sub-specialty board certification in cardiology from any country, according to the Register

We have previously discussed problems besetting the UCI kidney-transplant program here. The Los Angeles Times revealed a new report on the program by the US Center for Medicare and Medicaid Services (CMS) that showed the program “did not ensure nurses and others completed their training or that their training was comprehensive.... The report also faulted the hospital for failing to review the care provided to transplant patients.... One member of the medical staff explained to an inspector that ‘there was no member of the medical staff who either had the expertise or competency’ to do the reviews.”

New Problems

The Los Angeles Times revealed additional problems in the UCI nesthesia Department, this time, in its pain management program. Issues going back to 1997 have left the Department on probation by the Accreditation Council for Graduate Medical Education (ACGME) since then. The Department hired Dr Raafat Mattar 18 months ago “to fix shortcomings listed in 2000 and 2004 accreditation reviews.” However, Dr Mattar “resigned in frustration three weeks ago.” He said the pain progam still “didn’t have enough X-ray machines or access to exam rooms, forcing cancer patients and others in pain to wait as long as two months for treatment.” “Department supervisors promised to solve the problems, but nothing was done, he said.” Nine other faculty have left the Department in the last three
years.

The Los Angeles Times uncovered new allegations about possible nepotism at UCI. (Previous allegations of nepotism at UCI were discussed here.) After UCI medical center CEO Dr Ralph Cygan resigned, Ms Maureen Zehntner, a registered nurse, “formerly second in command” at the medical center, was appointed interim CEO. The Times reported that her brother, Bruce V McGraw Jr, works for UCI as a “network development liaison,” her sister, Veronica J. Hogues, works for UCI part-time as an assistant in the medical school, and her cousin, Kimberly Becker, also works in some capacity at UCI. The Times, consulted Kerry Fields who teaches business law and ethics at USC,

'Why UCI doesn't have a policy against [such hires] is beyond me,' said Kerry Fields, an assistant professor of business law and ethics at USC's Marshall School of Business. 'It saps staff morale and adversely affects recruiting because it sends a clear message that who you know is more important than how you perform.'

What Went Wrong and What To Do About It

In its report on previous scandals at UCI, the Los Angeles Times
provided some opinions,

'We can all be forgiven for occasional lapses of judgment, but the rapidity and extensiveness of this would suggest that there's an endemic management problem,' said Kerry Fields, who teaches business law and ethics at USC's Marshall School of Business. 'There's just too many examples of poor ethical decision-making.'
Former internal auditor Mohamed Abo-Hebeish said UCI 'has lost its conscience, its sense of social responsibility as a public institution.'
Fields, the USC business law and ethics professor, says UCI is looking for quick solutions and not looking deeper into the corporate culture.
He says the university needs a full-time inspector general who will review the organization top to bottom.
He said university officials are using the 'moral minimum' to guide their decisions, doing only what the law compels. 'It's a very shallow application of ethical standards,'
Fields said. 'The law merely states what you have to do. Ethics are what you should
do.'

Summary

I can only hope that the now numbingly extensive catalog of mismanagement at UCI will prompt a really close look into why such poor leadership was allowed to go on for so long, and some intense thinking about how to prevent such problems in the future.

Clearly, more representative, transparent, accountable, and ethical governance is needed at UCI, and probably throughout the UC system.

And although the details of the problems at UCI are unique, concentration and abuse of power are rampant throughout health care.

Post Title → Trouble in the OC Continues - More on UC-Irvine

At the University of California, More Controversy at a University That "Hates Controversy"

We have posted quite a bit, most recently here, about management troubles at the University of California (UC), and about some of the specific problems afflicting the University of California-Irvine Medical Center.

The San Francisco Chronicle published a long investigative report about how problems with the structure and function of the UC Board of Regents may relate to these troubles. These problems included:

• The Board, consisting of politicians and citizens appointed by the governor, tends towards cronyism. The Chronicle quoted Prof Bruce Fuller of UC-Berkeley, "it used to be a good old boys club of big men who contributed to the governor (and) who would rubber stamp any proposal put before them by the university."
• The Board has no staff of its own, and depends on the University President for support.
• The Board has a culture that tends to suppress dissent. Former Regent Ward Connerly wrote, "most regents value the appearance of collegiality more than any other attribute and can be quite unforgiving of any regent who betrays that trait." Connerly recalled that "staffers from the Office of the President would pass him questions to ask during public meetings that would generate an answer that would bolster the case for the president's cause." Summarizing, he said, "the university hates controversy. There's alwasy been this sheltered culture." State Assembly Speaker Fabian Nunez, who is an ex-officio member of the Board, according to the Chronicle, "find the regents 'orchestrated' [and] agree that the desire to avoid disagreement is damaging the credibility of the body."

Of course, organizations that try to suppress controversy often end up deluged in it. So, meanwhile, the Los Angeles Times reported on more signs of poor management at the UC-Irvine Medical Center.

• A UC review "confirmed allegations that officials at UCI Medical Center had misled regulators about the hospital's now shuttered liver transplant program...." The review focussed on a meeting that included Dr Ralph Cygan, the hospital's CEO, and Dr Thomas C Cesario, the Dean of the Medical School. The UCI contingent told the United Network for Organ Sharing (UNOS) that UCI had a full-time transplant surgeon, whereas the surgeon in question was based at UC-San Diego and only commuted to UCI at times. The review did excuse Cesario in a way, by implying he was uninformed: there was "no evidence" that he "was involved in or understood the significance of any decision about communications" with UNOS. (See Times article here.)
• Another Times report noted that "three children of top executives in UC Irvine's medical programs have received jobs with the hospital and medical school in recent years...." Dr David Cesario, the son of Dr Thomas Cesario, was hired by UCI's cardiology division. Dr David Brodsky, who was in charge of electrophysiology in the division, charged that he was driven out to make room for the younger Cesario. The younger Cesario also apparently was the one to suggest hiring Dr Jagat Narula as chief of the cardiology division. We had previously posted about the appointment of Narula, who has no California medical license or US cardiology board certification, here. Dr Kristen M Kelly, Cesario's daughter, also was hired as an Assistant Clinical Professor of Dermatology by Department Chair Gerald Weinstein, who reported directly to the elder Cesario. Former hospital CEO Dr Ralph Cygan's daughter, Anne Cygan, was hired by the hospital as an interpreter, and then promoted to work in patient relations. The Times quoted Professor Kirk O. Hanson from the Markkula Center for Applied Ethics at Santa Clara University, "where there is a pattern of relationships between relatives of senior management and the organization, you have to ask yourself whether senior management is tone deaf to the concerns of conflicts of interest."

The problems at UC, and specifically, at UC-Irvine, remind us of the pervasive, bad effects of unaccountable and conflicted management of health care organizations.

Post Title → At the University of California, More Controversy at a University That "Hates Controversy"

More Trouble, But Also a Little Hope, in the OC

The stories about University of California - Irvine (UCI) Medical Center, located in Orange County, California, just keep on coming, but at least now there are some signs of progress.

We have posted often, most recently here, about the continuing problems at the medical center. A chronology of problems there going back over ten years appeared in the Orange County Register. In 1995 - UCI Center for Reproductive Health physicians were accused of stealing patients' eggs and implanting them in other women, one was convicted, two fled the country; 1997 - UCI closed its Organ and Tissue Bank after charges of poor record keeping and storage, also cancer patients were allegedly improperly charged for participation in clinical trials; 1999 - the Director of the UCI Willed Body Program was accused of selling body parts; 2005 - UCI shut down its liver tranplant program after Medicare found mismanagement, poor staffing, and poor surviva; 2006 - problems surface in bone marrow and kidney transplant program.

New Revelations

New problems at UCI keep surfacing.

Proposed rules changes by state regulators now threaten the ability of Dr Jagat Narula, Chairman of UCI' cardiology division, to remain in his job, according to the Los Angeles Times. It had been previously reported that neither Narula nor Associate Chairman Dr Mani Vannan have California medical licenses or US board certifications in cardiology (see our post here). The two had been practicing under a exemption "that allows visiting physicians to practice at teaching hospitals without a California medical license for as long as five years." Apparently this provision had never been intended to apply to physicians in leadership positions, and new regulations will make this intention explicit.

According to the Orange County Register, "a former UCI Medical Center anesthesiologist [Dr Glenn Provost] said in a lawsuit that he lost his job in 2003 because he complained about safety problems, including rushing patients too hastily into surgery to save money." "The lawsuit, filed in Orange County Superior Court in 2005, also alleges that Provost's job was eliminated shortly after he presented a faculty petition about safety issues to the head of anesthesiology." In response, Dr Peter Breen, the head of anesthesiology at UCI, said "quality patient care" is the department's goal, and that internal inquiries have found "no systemic problems affecting patient safety."

Beginnings of Reforms

On the other hand, in response to the multiple problems that are now very public, UCI is beginning to change how it operates, as are other institutions associated with it.

Dr Ralph Cygan, the suspended CEO of UCI Medical Center, resigned, according to the Orange County Register. The Dean of the Medical School Dr Thomas Cesario will now report to a Vice Chancellor for Health Sciences. UCI will also make "the ombudsman a full-time position, moving him to the medical center and instituting a corporate compliants processs to handle issues raised by concerned staff." UCI Chancellor Michael V Drake apologized to those "misled, confused or otherwise served poorly by the statements or actions of anyone representing the university." Apparently referring to allegations that Cygan and Cesario misled the United Network for Organ Sharing (UNOS) about whether UCI had on-site leadership of its liver transplant program, Drake said, "[this is] not what we want to do. We have an organization that works very hard to provide patient care .... What we want to do is work hard to continue to provide services and do everything we can to regain the public trust." He said problems at UCI "are a result in a breakdown in the application of the values that must drive every decision made at the medical center, the School of Medicine, and the entire UCI campus." On the other hand, Drake "didn't think administrators are to blame. 'I think it is a cultural issue. I think it is pervasive in the institution. I don't think it's management. This has to be a cultural overhaul.

Per the San Diego Union-Tribune, Dr Marquis Hart, a surgeon at UC - San Diego who had been commuting to UCI to perform transplants, was "forced ... to step down as director of the [UCSD] Abdominal Transplant Program because of concerns he misled national organ officials about taking charge of UC Irvine's troubled liver transplant program." Per the Los Angeles Times, the reason was "the university has concluded that UCI representatives were not wholly accurate in describing the surgical coverage for the UCI liver transplant program." UCSD Medical Center CEO Richard J. Liekweg said, "we must ensure that the director of our transplant program has the full confidence and support of the public and the regulatory agencies."

Finally UNOS, upset that it had learned very late that improvements promised by UCI leadership in its liver transplant program were not made, has instituted a series of reforms of its own operations, according to the Orange County Register. These include monitoring rates of organ refusals and of deaths on transplant waiting lists; prohibiting a surgeon from being a primary transplant surgeon at more than one program; requiring that hospitals notify UNOS of any negative actions taken against or reviews about them; setting stricter limits on corrective actions taken after reviews find problems in a program; and establishing a confidential communications line for patient complaints.

Comments

I believe it is encouraging that reforms are taking place in response to the problems at UCI. I could speculate that these reforms, coupled with those at the University of Medicine and Dentistry of New Jersey (UMDNJ) in response to the scandal there (see last post here), and at Roger Williams Medical Center (RWMC) in response to the scandal there (see last post here), might be the begininings of a trend. If nothing else, it is a little encouraging to see top managers apologizing for previous misdeeds (even by somebody else) and promising improvements. Of course, my little bit of hope is tempered by them qualifying their apologies, e.g., by remarks that administrators are not to blame.

Furthermore, considering the reforms proposed at various institutions begins to provide a framework for better governance of health care institutions (at least, of not-for-profit academic medical centers). For example, two of these institutions, UCI and RWMC, intend to appoint an individual (ombudsman or chief ethics officer) who can operate independently to react to complaints about mismanagement and unethical behavior. Maybe every large health care organization should have such an individual. Of course, having a chief ethics officer might suggest the need for an explicit code of ethics to which that officer can refer.

I live in hope.

Post Title → More Trouble, But Also a Little Hope, in the OC

California Nightmares - More Troubles at UC, and Big Conflicts of Interest at UCSD

It is getting hard to keep up with all the stories about the University of California (UC) system, most about the lavish pay and perks given to its top managers, and the rising tide of editorial criticism of the huge university. At the same time, UC-Irvine has been accused of mismanaging its liver, bone marrow, and kidney transplant programs, and of hiring a resident after his father gave the hospital a large contribution (see most recent post here).

Here are the latest additions to this on-going saga:

Undisclosed Severance Packages - The San Francisco Chronicle found that many University of California managers have received previously undisclosed severance packages even after they voluntarily resigned. "While the program was approved by regents, details about the individual payments and who received them have never been publicly reported." Although the program is only supposed to be open to executives without simultaneous faculty appointments, or those hired before 1996, the University seems to have made various exceptions. For example, UC- Santa Cruz Chancellor Denice Denton is on this plan, although she is not a faculty member and was hired after 1996. Denton is well known for receiving one particularly striking perk: the University constructed a $30,000 run for her dogs at her executive mansion (see the Modesto Bee). Also, "In another case, UC quietly worked out a similar severance arrangement for a dean who was not eligible for the program, UCSF's David Kessler. Many UC managers have received severance packages, including some from Health Sciences, and some were from UC-Irvine.

No Confidence Vote at UC-Davis - The San Francisco Chronicle also reported on a petition calling for no-confidence vote in the Chancellor of UC-Davis, Larry Vanderhoef, in the Academic Senate. This was inspired by Vanderhoef's agreement to give former Vice Chancellor Celeste Rose a settlement that included $205,000 yearly for two years without any work responsibilities after Vanderhoef's attempt to fire Ms Rose, and her complaints of gender and racial discrimination. Simultaneously, in another setback for UC-Davis, its medical center has lost its designation as a magnet hospital for nursing excellence (per the Sacramento Bee).

Investigation into Incidents at UC-Irvine - The Los Angeles Times also reported that UC-Irvine will start scrutinizing all refusals of kidneys for transplant after media reports suggested that its medical center has had an unusually high rate of refusal and low rate of transplants (see our post here). Also, Medical School Dean Thomas C. Cesario announced that a panel of associate deans would review the case of a admittance into a special residency slot of a physician whose father made a large donation to the hospital. The Times noted that "Cesario approved the creation of the position and the selection .... [UC-Irvine spokeswoman Jennifer] Ward was unable to explain why Cesario was chosen to appoint the [investigative] panel [to investigate Cesario's own actions]."

But that's just the warm-up for today's main act....

Ten Corporate Boards for the UC - San Diego Chancellor'

UC - San Diego Chancellor Marye Anne Fox joined the legion of lavishly compensated UC executives when a report appeared that she received an undisclosed bonus of $248,000 when she was hired to compensate for a sabbatical she had not taken before she was hired.

On top of that, the San Diego Union-Tribune disclosed that Chancellor Fox serves on the board of directors of ten different for-profit and not-for-profit corporations. "In the past year, she received cash and stock worth at least $339,260 from her board memberships.... In addition, she receives more than 12,000 shares in stock options from the public companies annually. In the past 10 years since she began serving as a board director, Fox has accumulated stock and stock options worth more than $1 million." Fox's salary is $359,000, so it appears she collects more income from being on corporate boards than from being Chancellor. "Last year, Fox was expected to attend 50 corporate board and committee meetings." The Union-Tribune noted that "the average corporate board member devotes 191 hours annually in preparation time, travel and attendance on each board...." Based on that figure, membership in 10 boards would require 1910 hours a year, nearly 40 hours a week.

Furthermore, while Fox as Chancellor is responsible for the UC-San Diego School of Medicine and UCSD Medical Center, she sits on the boards of two for-profit health care corporations.

One is Boston Scientific Corp (some of whose travails were mentioned in this recent post). Boston Scientific is a major manufacturer of medical devices. Presumably, UC- San Diego medical center is a major user of such devices.

Chancellor Fox also sits on the board of Pharmaceutical Product Development Inc., which describes itself as "a leading global contract research organization providing discovery and development services, market development expertise and compound partnering programs. Our clients and partners include pharmaceutical, biotechnology, medical device, academic and government organizations."

Fox justified her board memberships thus, "the real benefit is the university's profile is enhanced by board service by chancellors and presidents." She also "said her experience as a director helps here management skills and provides important insights into private industry."

On the other hand, one UC- San Diego professor said "I would worry about whether she's either compromising her fiduciary responsiblities to the people of California or to the corporations and nonprofits she's serving."

In particular, in my humble opinion, having ultimate leadership responsibilities for a medical school and medical center, while also having ultimate fiduciary responsibilities for the management of a medical device company and a contract medical research company amounts to the biggest conflicts of interest I have ever seen.

This case illustrates why I am skeptical of the widely publicized approach to conflicts of interest recently published in JAMA by Brennan et al (see post here). Brennan and colleagues had zero tolerance for any financial relationships between physicians and drug and device companies. Their rationale was:

Social science research demonstrates that the impulse to reciprocate for even small gifts is a powerful influence on people's behavior. Individuals receiving gifts are often unable to remain objective; they reweigh information and choices in light of the gift

Brennan and colleagues were silent, however, about conflicts of interest affecting managers of health care organizations, yet authorized the managers of academic medical centers to enforce such zero tolerance on physician faculty.

If applied to UC -San Diego, this approach would authorize management to condemn a junior faculty member for accepting a coffee cup with a Boston Scientific logo, while the managers answered to a Chancellor who was a Director of Boston Scientific.

If even small gifts from a corporation have a powerful influence on behavior, what effect would one expect from being made a director of the corporation?

It seems hypocritical to have zero tolerance for trivial corporate gifts to medical school faculty, but infinite tolerance for lavishly remunerated, highly responsible corporate positions for university management.

Post Title → California Nightmares - More Troubles at UC, and Big Conflicts of Interest at UCSD

California [Bad] Dreamin' - More Troubles at UCI

There is a continuing drip, drip of unfavorable stories about management problems at the University of California - Irvine medical center, and simultaneously about the lavish pay and perks awarded to University of California (UC) managers in general.

UCI

As the media continue to investigate the University of California - Irvine (UCI), more disturbing stories have come to light. (Our last post about problems at UCI was here.)

Alleged Misrepresentation Regarding the Liver Transplant Program - The Orange Country Register alleged that top UCI managers misrepresented how the medical center's liver transplant program was going to be lead to stave off a recommendation that the program be closed. In May, 2004, the United Network for Organ Sharing (UNOS) announced its intention to have the program shut down. In July, 2004, a delegation from UCI, including the hospital CEO Ralph Cygan, medical school Dean Thomas Cesario, and transplant surgeon Marquis Hart met with UNOS personnel, and assured them that Hart would become the full-time, on-site director of the program. Based on this, UNOS rescinded its recommendation to close the program. But Hart never worked full-time at UCI. Instead, he continued to shuttle from his full-time position at University of California - San Diego (UCSD). The Register said, "it would not be until Medicare auditors went to UCI on July 19, 2005, investigating a patient complaint that regulators discovered Hart was not there. The auditors said they were told Hart was 'in surgery all day' at his primary transplant center where he serves as medical director." Neither Cygan, Cesario, or Hart agreed to talk to the Register about the meeting and its aftermath.

A UNOS official said, "if there was a change, and the member knew that they had provided information to the committee that changed, I think the committee would expect (an) update." US Senator Charles Grassley (R - Iowa), chair of the Finance Committee, said, "here, it appears that an institution represented that it had hired a full-time transplant surgeon, when this apparently was not the case. This apparent misrepresentation raises concern about any disservice to patients in need of organ transplants and whether much-needed corrective action to the transplant facility was postponed."

The Kidney Transplant Program - The Los Angeles Times now has found problems with the UCI kidney transplant program, to accompany previous stories about problems with liver and bone marrow transplants. The Times found that the kidney program accepted many fewer kidneys (8.7%) than other programs (averaging 25.9% - 31.2%). The rate of patients getting transplants (16.5% from 1999 to 2001) was slower than the national rate. Although the program now has a full-time director, for over a year it had no full-time on site physicians. UCI was first warned in 2002 by the US Center for Medicare and Medicaid Services (CMS) about its kidney transplant program. It just got another warning from CMS.

The Radiology Residency - The Los Angeles Times just reported that an applicant was accepted into a specially created position in the UCI radiology residency program soon after his father pledged a $250,000 donation to the radiology department. Dr Fong Tsai, chair of radiology, and the resident's father both "denied the donation was given in exchange for the son's residency position." However, the father "said he began discussing a donation with Tsai in early 2004. He said he and Tsai discussed his son's desire to join UCI's residency program but never in connection with the donation." Nonetheless, bio-ethicist Arthur Caplan of the University of Pennsylvania opined, "it looks like the prospect of donations may have shaped their assessment of the candidate's admissibility. I hope not, but it looks that way."

UC Pay and Perks

Stories continue to pop up about top UC managers collecting more in pay and perks than had previously been publicly disclosed.

UC-San Diego Chancellor Mary Anne Fox - the San Diego Union-Tribune found that during her first year, Chancellor Fox received "far more than the $350,000 salary disclosed when she was hired." Her total compensation was actually nearly $700,000. It included a payment of "$248,000 for a sabbatical she had earned at her previous university, but did not take."

UC-Berkeley Chancellor Robert Berdahl - The San Francisco Examiner found that when he resigned, "he was given a yearlong leave at this chancellor's salary with the understanding he would return to teaching. Now Berdahl says he'll leave in May - after teaching one semester - to run an academic trade group. But UC officials said he won't have to pay back the $355,000 he earned on leave because UC made 'an exception to policy.'" Commented UC-Berkeley journalism Professor William Drummond, Vice-Chair of the Academic Senate, "This is a completely different system of rewards than I or my faculty colleagues operate under."

An editorialist at the Sacramento Bee said it well,

The perks, payoffs, and golden parachutes provided to top University of California administrators are outrageous, and they reflect a culture of excess and lax oversight created by none other than the UC Regents.
The perks and payoffs have gotten out of hand, especially at a time when UC campuses have seen cuts and tuition raised in recent years. The Regents need to assert control over the process, but it is doubtful they will. This board no longer runs the university system. The chancellors do. In recent years, UC chancellors have created their own fiefdoms and power structures, turning the regents into mere figureheads.

Concentration and abuse of power? And its effects in the health care realm can be seen at UCI.

Post Title → California [Bad] Dreamin' - More Troubles at UCI

Even More Trouble in the OC: the UCI Bone Marrow Transplant Program

We have previously contrasted claims by the University of California (UC) that lavish salaries and benefits were needed to attract the best possible administrators with stories of mismanagement of the University of California - Irvine (UCI) medical center's liver transplant program.

New reports in the Organge County Register and Los Angeles Times suggest that yet another transplant program at the University of California - Irvine (UCI) is severely troubled.

The program performed fewer than the minimum number of transplants per year required by California state standards for 10 of the last 11 years. A state reviewer wrote in 2002, "given these persistently inadequate numbers, the correction action steps outlined in your letter to address your low numbers are vague and frankly, insufficient to ensure any confidence that you can effectively turn UCI's adult [bone marrow transplant] program around in a one-year time frame." UCI first claimed that people at the highest level, including the Dean of the Medical School, Thomas C Cesario, and hospital Chief Executive Officer (CEO) Dr Ralph Cygan were addressing the problems. Then, UCI withdrew from the Medi-Cal program. (Cygan is now on paid administrative leave after problems in the liver transplant program surfaced, as per this previous post.)

The bone marrow transplant program has suffered from a lack of leadership. Dr Winston Ho, its full time director, quit in 2002. Dr Henry Fung served only from 2003 to 2005. The current interim director, Dr Leonard Sender, is also full-time director of the cancer center at Children's Hospital of Orange County, and the amount of time he serves at UCI is unclear.

The staff of the program have turned over rapidly. No one from the original 1995 team is left. At least one staff member (out of eight) has left every year.

Nonetheless, the medical center has vigorously promoted the program. The Register noted that the UCI web-page advertised its "top-notch team at a state-of-the-art cancer center to provide the care needed by patients and family during this complex procedure." Also, "UCI's cancer center is renowned for its bone marrow transplant program." Furthermore, the web-page claimed that the transplant program is eligible to get donations from the National Marrow Donor Program registry. However, UCI is actually not part of that program.

The Times noted that "a spokeswoman for the medical center said last month in an interview that the marrow transplant program was fully functional. Asked if there were any problems with it, the spokeswoman, Susan Mancia, said, 'No, not that we're aware of. We have a really robust and viable program.' Mancia acknowledged Wednesday that here answer was misleading but said that was what doctors and university officials - whose names she couldn't remember - told her."

The evidence of mismanagement at UCI continues to mount, now coupled with suggestions of misleading marketing practices.

One member of the UC Board of Regents justified the pay and perks given to top managers as necessary to get the best people in the market. Instead, perhaps they got the people in the market most interested in lavish pay and perks, rather than the academic and clinical mission.

Post Title → Even More Trouble in the OC: the UCI Bone Marrow Transplant Program

More Trouble in the OC: Golden Parachutes for UC Leaders, and "Malfeasance" at UCI

Last month, we posted about two inter-related stories from the University of California (UC) system.

The first was about lavish pay and other compensation given to many top UC administrators, while state support of the system shrunk, and fees paid by students grew. But UC leadership argued that high pay was needed to attract top quality executives.

This rationale was challenged by the second story, about the collapse of the University of California - Irvine (UCI) liver transplant program, amid charges of mismanagement. That campus, of course, was lead by highly paid executives at the time.

In the last month, local newspapers have followed up on both stories, providing yet more details about just how well UC leaders were recompensed, with as little public notification as possible; and about just how badly UCI was mismanaged, despite the excellent compensation of its leaders.

UC Pay and Perks

More stories surfaced about favorable treatment of particular UC managers.

• Former UC - Davis Vice Chancellor Celeste Rose was asked to resign. When she threatened to sue for race and gender discrimination, the university quickly agreed to a settlement entitling her to two years of salary ($205 K per year), and other payments totalling nearly $500 K. Yet despite policies that the UC Regents must approve settlements worth more than $250 K, or salaries over $200 K, the Regents were never told of these arrangements (per the San Francisco Chronicle).
• Former UC Provost MRC Greenwood was charged with violating conflict of interest policies by hiring Lynda Goff, a friend and business partner, first as an executive assistant, then in academic affairs at a salary of $192 K. In addition, Winston Doby, UC Vice President for Student Affairs, who reported to Greenwood, hired Greenwood's son into a specially created internship position. When these events came to light, the university launched an investigation, but permitted Greenwood to resign her administrative position before it was completed, agreeing to give Greenwood 15 months of leave at her $ 301 K salary (per the San Francisco Chronicle).
• In 1993, UC policy required the Regents to approve paid leaves for more than three months granted to top administrators after they left their jobs. In 1994, then UC President Jack Peltason promised to completely stop awarding year long paid vacations to departing administrators. Yet UC again began awarding paid leaves upon departure in 2003. In the past 13 months, in addition to the cases above, former UC - Berkeley Chancellor Robert Bardahl and former Lawrence Berkeley National Laboratory Director Charles Shank were awarded prolonged leaves at more than $300 K each per month. Former state Senator Quentin Koop, who tried to put an end to paid leaves, responded, "It's a betrayal. You can't depend on the probity of university leaders." State Senator Abel Maldonado (R - Santa Maria) said, "This perpetual lack of transparency needs to end." (per the San Francisco Chronicle).

The Los Angeles Times wrote,

UC is far too inclined to use public money as a slush fund - and ... it will take more than a legislative committee or even the outside audit that UC is finally launching to fix matters.
When revelations first arose this fall about millions of dollars in perquesites given to UC administrators, this page cautioned that though they should be thoroughly investigated by an outside body, running a prestige university is costly and most of the expenses might be justified. That's still true. But these early examples show that UC administrators have a disquieting tendency to run a loose ship, and run it by their own, rather than state or university rules. Such shenanigans hardly enhance the universities' prestige. Furthermore, UC President Robert C. Dynan has strenuously resisted closer oversight or public transparency.
It will take sustained, outside scrutiny of UC - by auditors hired by the Legislature, rather than the regents - to remind UC executives that they are accountable to the public for each costly decision.

The Mess at University of California - Irvine

Meanwhile, the problems at UCI continued to demonstrate that lavish compensation of UC executives has not bought superlative performance.

A Los Angeles Times investigation revealed how hospital leadership permitted the UCI liver transplant service to dwindle to one run by a single, and increasingly embattled surgeon, Dr Sean Cao. Liver transplant services are rated by their outcomes, particularly their overall survival rate. The unit's survival rate was considered to be under the norm. So, "improving the statistics became the mission of the program.... But with so few surgeries, a single death in the operating room could drastically skew the survival rate - a mathematical misfortune of small transplant programs." Therefore, "with so much riding on each operation and so few people to bear the responsiblity, the program was driven to dysfunction by a paralyzing fear of failure, and an obsession for keeping up appearances."

Hospital administrators had been warned by the United Network for Organ Sharing (UNOS) that the program needed to expand, and "both the Dean's office and hospital management appear[ed] to understand." But the program was never enlarged. Similarly, despite recommendations made in 2003 to develop a computerized data base for the program, in 2005 the hospital was still writing a request for proposals to develop the database (per the Orange County Register).

After Dr Cao left, the Los Angeles Times reported that the hospital was only able to secure a part-time liver transplant surgeon. Dr Marquis Hart, based at UC San Diego, 90 miles away, agreed to help. But UCI Medical Center CEO Dr Ralph Cygan "provided false information to keep the unit running." He assured federal regulators "that UCI had recruited a full-time transplant surgeon to revive the program." Government regulators met Cygan and left "with the clear impression that Dr. Hart would be leaving UC San Diego and moving full time to UCI." UCI administrators also told their staff that Hart was key to reviving their program. On their web-site, they said "Dr. Hart is an experienced transplant surgeon who comes to us from UC San Diego Medical Center," without noting that he came to them only about one and a half days a week.

Furthermore, as federal inspectors scrutizined UCI Medical Center, other problems appeared. The center's dermatology program is on academic probation (per the Orange County Register).

And the Register also reported that the leaders of the Center's cardiology division, Dr Jagat Narula and Dr Mani Vannan, lack US board certification in cardiology and even in internal medicine. Narula and Vannan also failed to get California medical licenses. The former head of the division, Dr Michael Brodsky, charged, "It's because UCI can't attract good doctors to come and work here." Narula had briefly run the cardiology program at Hahnemann University Hospital, but "left amid accusations that the program was floundering." Narula's successor there said, "There were financial problems in the division and concerns about the way it was being run administratively." Nonetheless, "Narula has gone on to be among the five highest-paid UCI employees. In the 2004-05 fiscal year, he earned $400,000, more than the dean...." Brodsky concluded,

The whole thing is embarassing. It shows that this liver business is not one isolated phenomenon. It's just another example of continuing malfeasance.

Conclusions
One of the UC Regents had argued that if a university can't offer lavish pay, "you don't get to look at the best people in the market." (See our post here.) If the UCI leadership are "the best people in the market," I hate to think what the other people in the market look like.
Instead, the UC cases suggest that lavish executive pay and perks at health care organizations, rather than being necessary to attact good leaders, actually correlates with bad leadership. Perhaps executives who are most concerned about their personal financial advancement are less likely to be devoted to the academic and health care mission.

Post Title → More Trouble in the OC: Golden Parachutes for UC Leaders, and "Malfeasance" at UCI