Monday, January 30, 2006

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.

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