Sunday, August 28, 2005

Conflicts of Interest Revealed on the UMDNJ Board of Trustees

The hits just keep on coming for the University of Medicine and Dentistry of New Jersey.
The latest was reported by the Newark Star-Ledger, this time involving conflicts of interest affecting the university's board of trustees. The newspaper found multiple possible conflicts.
  • Sonia Delgado, the chair of the board, is a health lobbyist for Princeton Public Affairs Group, "whose clients include Robert Wood Johnson University Hospital in New Brunswick, a teaching hospital affiliated with UMDNJ. Records show her firm also represents Bon Secours Health System Inc., a Catholic health care system ... that is currently to sell St. Mary's Hospital in Hoboken to UDMNJ."
  • "John P. Ferguson is the president and CEO of Hackensack University Medical Center, also affiliated with UMDNJ...."
  • "Christopher Paladino is president of New Brunswick Development Corp... which is building a new dorm on the Newark Campus of UMDNJ."
  • "John A Hoffman is a managing partner of the law firm of Wilentz, Goldman & Spitzer in Woodbridge, which served as special counsel in the financing of $87.4 million for the dorm project...."
  • "Donald Bradley is the Newark City Council president. The city has contracts with UMDNJ."
Potentially very significant is that the the Liason Committee for Medical Education (LCME) "found the Newark-based institution in violation of its accreditation standards because of conflicts involving business affiliations of several trustees...." Apparently, LCME rules require medical school governing boards members must have "no personal or pecuniary interest, or other conflicts of interest, in the operation of the medical school, its associated hospitals, or any related enterprises." The LCME does not simply allow members with conflicts to recuse themselves from specific board activities, "while this process may effectively manage the conflict, it does not satisfy the (accreditation) standard."
It is not too hard to imagine that a board of trustees including multiple members with conflicts of interest may not due the best job keeping a medical school (or other health care organization) focused on its mission.

1 comment:

Lee Green MD MPH said...

I read this post just after reading the latest on corruption in the finance industry. It seems to me that I could almost substitute the names in the two stories and have just one story. Self-dealing and other forms of corrupt behavior seem to me to be at least as prevalent in health care as in other industries. That shouldn't be a surprise really, as health care is the single largest industry in the US now. That much money attracts the same kind of sharpies as finance, energy, and other industries where we've seen massive corruption (Enron, Tyco, Worldcom, et al.)

The organizations in health care that are being run for the benefit of their executives not their patients are pretty closely analogous to those in other industries that are run for the benefit of their executives at the expense of their shareholders. They're rackets, in the precise definition of the term. (A racket is an operation in misdirection, an organization that purports to do one thing while really being about another.)

How do we bust the rackets in health care? I think the question is the same as for other industries. At present bringing one down takes a lot of investigation, a lot of legwork, determined prosecution, resources, and time. That means only the absolute worst cases get dealt with, and the most of the rackets go on untouched.

Reducing the prevalence of rackets across the board means the equivalent of a public health intervention, a change in the environment. Whether in health care or other industries, it means more accountability, breaking up the old-boys-clubs, things like prohibiting company officers from serving on or having any role in choosing members of the board. It means making executives accountable to the board and the board accountable to shareholders (or patients, in our case).

I'm pretty sure the smell will have to get a lot worse before the public becomes incensed enough to demand such changes. It'll take public demand though, because right now the racketeers pretty much control the process too, and the odds that they'll initiate any change are well below "fat chance".