Monday, September 11, 2006

An Even More Tangled Web: "Development Cases," "Go-To Men," and Health Care Corporations

The Wall Street Journal excerpted (available here from the Providence Journal with free registration) a chapter from a new book, The Price of Admission by Daniel Golden. The book is about allegations of how major American institutions of higher education actively recruit children of the rich or famous, regardless of their academic qualifications, to enhance the institution's prestige or funding. (See the Washington Post's review of the book here.)

Full disclosure: one of the two universities the excerpted chapter discusses is my own alma mater, Brown University, where I currently have a voluntary faculty appointment.

The chapter otherwised focused on Duke University, and in doing so suggested yet another dimension of financial entanglements between universities, their top leaders, and health care corporations.

Over more than 20 years, Duke transformed itself from a Southern school to a premier national institution with the help of a winning strategy: targeting rich students whose families could help build up its endowment.
What makes Duke and Brown, among other institutions, stand out, is the way in which they ramped up and systematized their pursuit: rejecting stronger candidates to admit children of the rich or famous, regardless of their ties to the university.

Both schools had a behind-the-scenes power broker, a go-to man for prominent parents seeking to fast-track their children's applications. Duke had Joel Fleishman, 72 years old, a wine connoisseur who sits on boards of companies run by Duke donors and the parents of Duke students.
In the world of higher education, children of the rich and famous are known as 'development cases,' pursued by presidents and fund-raisers often to the dismay of admissions staffs. Duke landed the children of fashion mogul Ralph Lauren and other corporate titans. Some of them became major donors, helping boost Duke's endowment from 25th in 1980 ($135 million) to 16th in 2005 ($3.8 billion).

Mr. Fleishman has held numerous titles at Duke, from senior vice president to professor of law. His power at the university stemmed in part from a long association with Mr. Sanford, which dated to the president's days as governor. Mr. Fleishman's résumé also includes a variety of affiliations with nonprofit foundations and companies.

What it omits is his role at the vortex of development and admissions. Mr. Fleishman, who served as chairman of a 1983-92 fund-raising campaign that raised $221 million, courted potential donors and pushed to admit their children.

Mr. Fleishman also sits on the board of Boston Scientific Corp., whose chairman, Duke alumnus Peter Nicholas, is one of Duke's biggest donors. His three children graduated from the university.
Mr. Fleishman sits on more corporate boards 'than a lot of people, especially nonpresidents,' says J. David Ross, a former vice president at Duke. Mr. Ross says he believes the directorships weren't payback for admissions. Duke spokesman Mr. Burness says Mr. Fleishman 'is a person of considerable distinction and accomplishment, and it's no surprise that a number of leading nonprofit and corporate organizations have invited him to share his wisdom as a member of their boards of directors.' Boston Scientific declines to comment.
The entanglements in this case are clearly even more complex than those in the case of a medical school leader simply sitting on the board of a health care corporation.

Again, most of the public discussion about conflicts of interest in health care has been about practicing physicians getting pens and coffee mugs with company logos or take-out lunches from company representatives. Some has been about faculty members getting thousands or tens of thousands from consulting relationships or speakers' fees. These conflicts are very important.

Yet more complex and intense entanglements affecting top medical school officials and the university leaders to whom they report have up to now received almost no attention. Maybe they will now.

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