Wednesday, February 01, 2006

UMDNJ: "A Blank Slate for Complete Debasement of Fundamental Governance"

The barrage of news about the University of Medicine and Dentistry of New Jersey (UMDNJ) continues. We have posted repeatedly (most recently here and here) about the multiple scandals at UMDNJ, which resulted in the University signing a deferred prosecution agreement with the federal government, and accepting federal monitoring of its operations, and most recently the state Governor seeking the resignation of the UMDNJ President.

More Revelations

After she moved to Pennsylvania, 70 miles from Newardk the unpaid head of the UMDNJ volunteer advisory board, Mary E Mathis-Ford, was provided rides in a chauffeured Lincoln Town Car to and from board meetings. The rides were 70 miles each way. The total cost was nearly $70,000, more than the price of new Lincoln Town Car. When the Newark Star-Ledger confronted Mathis-Ford about the trips, she cried, saying "I did not know about the cost. They never said anything to me until you called. I'm embarassed." This is a small, but vivid example of the unrestrained spending of the former leaders of UMDNJ.

According to the Gloucester County Times, NJ State Senator Wayne Bryant (D- Lawnside) resigned his part-time position as "program support coordinator" with UMDNJ. The position apparently involved university development, that is, money raising. Sen. Bryant was also the chair of the Senate Budget and Appropriations Committee, and thus had personal influence over the UMDNJ budget. According to the Bergen County Record, "the university failed to provide information requested under the state's Open Public Records act relating to any memos, reports, or other paperwork that Bryant produced during his three years as a 'program support coordinator.'" Furthermore, "critics had long questioned how the powerful senator, who chairs the finance committee, could be on the payroll while at the same time parceling out its state funding." This is a not so small, and very vivid example of conflicts of interest affecting health care organization leaders.

Bad Consequences

Our posts on UMDNJ up to now have focused mainly on reports of mismanagement by and corruption of the leadership of the institution. Now the consequences of these governance failures are becoming apparent.

UMDNJ University Hospital suddenly announced a budget shortfall, and the layoff of almost 140 employees, according to the Newark Star-Ledger. NJ Governor Jon Corzine immediately froze the lay-offs, and advanced $6.8 million of state funding to the hospital. However, although the state had previously allocated $36.8 million in extra funding to the hospital, that money has apparently vanished. "The money went to the university, which operates the hospital, but it's unclear how much - if any - of the funds ended up in the hospital budget, according to administration officials and others." My comment is that there are all sorts of ways for bad and corrupt leadership to cost an institution money, by spending it on themselves, by frequent ill-considered management decisions, and by demoralizing employees and thus lowering productivity. Thus it should be no surprise that the chronically bad leadership at UMDNJ should lead to all sorts of financial short-falls. But outside of Health Care Renewal, does anyone talk about mismanagement by and corruption of leaders of health care organizations as a cause of rising health care costs?

Meanwhile, UMDNJ researchers, perhaps feeling newly emboldened to speak up, have complained that a dysfunctional institutional review board (IRB) at the Newark campus had needlessly delayed or obstructed research projects, again per the Newark Star-Ledger. One example was the "expedited review" of a research project that took six months. A more striking example was the termination of a project by Prof Norman Ende who was injecting cord blood into diseased mice. The IRB claimed that Ende's work was in "serious and continuing noncompliance." However, the role of the IRB is to protect human research subjects. They usually have not say about animal research. The last time I checked, mice were considered animals. The former president of the faculty organization at the medical school called the IRB "inefficient, inflexible, and vindictive." In my humble opinion, it is no surprise that a badly lead organization would have badly lead sub-components.

The Beginnings of Reform

New NJ Governor Jon Corzine has asked for the resignation, en masse, of all senior administrators at UMDNJ, according to the Newark Star-Ledger. "Corzine said the resignations, affecting as many as 25 high-ranking executives, were the quickest way to begin reforming a university that runs without even the most basic of internal oversight." Furthermore, the Governor said,

It was out of control. Simply, the control structure didn't work. The fact that they never had any board review for (any expenditure) under $100,000 was a blank slate for complete debasement of fundamental governance. However it got designed, whenever it got designed, it was designed to make sure the board really was a figurehead.
Meanwhile, the federal monitor for UMDNJ, Judge Herbert Stern, hired an accounting firm to do a forensic audit of UMDNJ.

Finally, there will now be an enquiry at the national level into the goings on at UMDNJ. The US Senate Finance Committee, lead by Senator Charles Grassley (R - Iowa) and Senator Max Baucus (D - Montana) are on the case, according to the Newark Star-Ledger. Said Sen. Grassley, "federal health care programs are already stretched to their limit. Any dollar that goes to waste, fraud or abuse doesn't help a person in need." Said Sen. Baucus, "there needs to be a full explanation of the problems that have been uncovered...."

I still have not seen any statement of concern, dismay, or anger, though from any national "opinion leaders" in health care about UMDNJ (or any of the other cases we have been following lately on Health Care Renewal), much less any interest in improving the governance of health care organizations. Nonetheless, our voices will continue to cry out in the wilderness....

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