Monday, March 17, 2008

Living the High Life in Academic Medical Center Leadership

We had posted awhile back about how a not-for-profit, state supported academic medical center, University of Texas- Southwestern Medical Center, had created an "A list" of local notables who were to be given special treatment, including enhanced access to physicians. This seemed to imply some slippage from the institution's mission (see post here). It turned out that the practice may not be unique, but neither is is universal (see this post).

The local television station that uncovered this practice, "CBS 11," has been keeping an eye on the medical center. Late last year it found out its top officials had quite a taste for expensive wine.

Top state officials at the University of Texas Southwestern Medical Center in Dallas spent tens of thousands of dollars in donations on luxury wines from prestigious New York wine merchants.

A CBS 11 News investigation of charges to the university's credit cards found that President, Dr. Kern Wildenthal, and his right hand assistant, Vice President, Cyndi Bassel, spent more than $125,000 on wine.

A UT Southwestern spokesman says the state healthcare institution purchased the wine with money from unrestricted donations and not tax funds. John Walls explained the wine expenses in a written statement, 'The purchases from New York dealers were for hard-to-find wines not readily available in local retail shops, which were especially appropriate for individual commemorative gifts and special recognition events.'

The TV station's reporters also found that the Medical Center was using restricted donated funds to wine and dine its top executives, although the funds were meant for very different purposes.

Upon his death in 1986, [Jesse] Brittain left his life savings of more than $390,000 to UT Southwestern. Brittain's endowment agreement specified that the money was to be used 'for the sole purpose of enhancing the business operation of UT Southwestern giving priority to the professional development of personnel in the business operation, including training courses, books, seminars, etc.'


CBS 11's hidden camera was there to record how the state university has been using money from the Jesse Brittain Memorial Fund.

The family of the late donor says the money was intended to help train employees and not for what CBS 11's investigation found.

The undercover video captured an annual holiday party held for a select group of the university's business administrators.

The state officials gathered in a luxurious penthouse dining room on the University's North Campus. It is a rarified atmosphere with a half million dollar collection of sleek tables designed by the internationally recognized Spanish architect Santiago Calatrava and a breathtaking night vista of twinkling lights on the Dallas skyline.

A white jacketed chef carved slices of herb crusted sirloin from a $450 side of beef. A waiter strolled through the party serving risotto crab cakes that cost $316 and artichoke hearts filled with goat cheese that cost $316.

Tables of silver serving trays filled with specialty appetizers were decorated with large gingerbread houses.

Partygoers bellied up to an open bar where more than $1000 worth of drinks were served.

The party that CBS 11 found in full swing is one of three annual holiday parties that have been paid for with more than $15,000 from the Jesse Brittain Memorial Fund.

In general,

CBS 11's review of financial records obtained under the Public Information Act indicates that more than $40,000 was spent on meals and refreshments which were paid for with money from Brittain's Memorial Fund over the past two years.

Finally, CBS 11 documented how the Medical Center CEO was living high on the hog supported by tax-exempt donations.

Dr. Kern Wildenthal, the President of the University of Texas Southwestern Medical Center in Dallas, spent tens of thousands of donors' dollars on European trips, meals at five star restaurants, parties and expensive gifts, according to CBS 11's review of the state university's records.

CBS 11 uncovered more than $500,000 in expenses charged over the past two years to credit cards issued to Wildenthal and Cynthia Bassel, UTSW's Executive Vice President for External Relations. Financial records obtained under the Public Information Act indicate that most of the expenses were paid for with money that was donated to the medical institution.

The Southwestern Medical Foundation, the university's fundraising arm, paid for the bulk of the credit card expenses including:
--$533 for a donor dinner at a five star restaurant at the Hotel Meurice in Paris, France, for Wildenthal, his wife Margaret, British opera singer Robert Lloyd and his spouse and Andre Dunstetter, a Parisian social figure with ties to Dallas.
--$783 for Wildenthal's two most recent annual memberships in Mosimann's Dining Club, an exclusive restaurant in London.
--$459 for collectible Woodland Eagle dinnerware, including a platter and four mugs from Crow's Nest Trading Company, for two donors in April of 2007.
--$13,000 for tulip arrangements sent to donors for Valentine's Day over the past two years. A note on the 2007 order instructs the florist to deliver a half-dozen of the arrangements to Wildenthal's home.
etc, etc, etc


Both Wildenthal and Bassel have charged thousands of dollars to the credit cards for memberships in social and civic organizations. CBS 11's review found that donors' money from the Southwestern Medical Foundation was used to pay for Wildenthal's 2007 membership dues in the Dallas Symphony ($3500); Dallas Museum of Art ($5000); Nasher Sculpture Garden ($5000); British North American Committee ($6000); Dallas Women's Club ($850); and the SMU Town and Gown Club ($140).

As we noted earlier, the UT Southwestern mission statement is [with italics added for emphasis]:

* To improve health care in our community, Texas, our nation, and the world through innovation and education.
* To educate the next generation of leaders in patient care, biomedical science and disease prevention.
* To conduct high-impact, internationally recognized research.
* To deliver patient care that brings UT Southwestern's scientific advances to the bedside — focusing on quality, safety and service.

Somehow, I don't see anything about fancy wines, opulent dinners, and luxurious trips for the top leaders.

Once again, it appears that the leaders of large health care organizations fancy themselves different from you and me. They seem to feel entitled to membership in the power elite, to lead the high life (and not the version from a Miller beer commercial) while leading organizations that are supposed to focus instead on the community and to bring quality care to all patients' bedsides. I have no objection to good pay for people who work hard on behalf of the mission. But it is unseemly for leaders of not-for-profit health care organizations to live like minor nobility while so many health care needs remain unmet.

By the way, it may not be that what the University of Texas - Southwestern Medical Center was doing is unusual. In a summary of the case just published in the Nonprofit Quarterly, Rick Cohen wrote,

As studies from the General Accounting Office and the Congressional Research Service show, these nonprofit indulgences are frequently standard operating practice. The hospital has dismissed all criticisms by pointing out that UT Southwestern’s fundraising and expenditure patterns are right in line with nonprofit hospital practices nationally, including the proportion and nature of expenditures on fundraising including gifts for donors. They further suggest that donors to the UT Southwestern foundation fundraising arm know full well that their donations—classified as unrestricted—will be used for expenses that aren’t particularly focused on medical care or research, but for the CEO’s club memberships, upscale dinners and gifts for donors and bigwigs, and flower arrangements sent to the CEO’s home. Therein may be the real issue, not that UT Southwestern is behaving out of the norm, but that it is exactly within the mainstream of big nonprofit hospitals. And no one seems all that put out, because this is what is expected of big corporate institutions, for-profit, nonprofit, hospitals, universities, corporations, it really doesn’t matter all that much.

So it would surprise me not at all to find out that many executives of many academic medical centers and teaching hospitals are similarly living the high life. This, of course, goes along with many discussions on Health Care Renewal of health care leaders who seem to put their pocketbooks ahead of their patients. If this is as widespread as Rick Cohen and I think it is, why are we wondering why health care is increasingly expensive and inaccessible, while its quality declines, and health care professionals get ever more disgruntled?


Anonymous said...

These expenditures reflect a lack of integrity at a most fundamental level in these leaders, for they could, if they wanted to, simply say "no" to this type of extravagant waste.

The real question is, does the public want such people with such self-serving priorities leading their healthcare institutions, and what can be done to have these people and their culture of self-appointed royalty removed?

Anonymous said...

Not surprising - I had a neurosx friend move from Canada to the US and was on the news promoting quicker healthcare at a detroit hospital. When the reporter asked him if this is akin to 2tier health care he replied "you already have 2 tier care, but it's not based on money it based on who you know". Inequalities in health care exist the world over -- this is just one more example. At least you're system is very upfront about it.

Anonymous said...

Here in Ohio we have the situation of Ohio State University with it's new/old president. From the Toledo Blade:

Article published Friday, July 13, 2007

Board Chairman G. Gilbert Cloyd said Mr. Gee's contract is still evolving. But a draft of that contract calls for a base annual salary of $775,000. He would receive an additional $225,000 a year if he stays beyond five years.

That would put him among the highest-paid public university presidents. His pay would be nearly double the total compensation of $562,031 that his predecessor, Karen A. Holbrook, was earning, an amount considered generous among taxpayer-supported schools before the latest round of pay raises, deferred compensation packages, and signing bonuses for higher-education chief executives.

The final package included an unlimited entertainment budget along with the use of a private jet. The university was about to enter into a $1.2B endowment drive along with another drive to support improvements in technology funding. Ohio State has a medical school that serves the low income population of Columbus.

One really does have to question the message this sends to the student body. Ohio has some of the highest public school tuition in the US along with some of the worse economic conditions. I guess we are all just suppose to feel good about the football team.

Steve Lucas