Some Call it "Tyranny" - Top Leaders of University of California (Including Leaders of Academic Medicine) Demand Bigger Pensions for Themselves

The state of California, and its flagship university system, the University of California, have been under extreme financial pressure lately. 

The 36 Executives' Demands

However, that apparently has not decreased the University's hired managers' and executives' sense of entitlement.  They are threatening to sue if their pensions are not increased.  As reported by the San Francisco Chronicle,

Three dozen of the University of California's highest-paid executives are threatening to sue unless UC agrees to spend tens of millions of dollars to dramatically increase retirement benefits for employees earning more than $245,000.

'We believe it is the University's legal, moral and ethical obligation' to increase the benefits, the executives wrote the Board of Regents in a Dec. 9 letter and position paper obtained by The Chronicle.

'Failure to do so will likely result in a costly and unsuccessful legal confrontation,' they wrote, using capital letters to emphasize that they were writing 'URGENTLY.'

Their demand comes as UC is trying to eliminate a vast, $21.6 billion unfunded pension obligation by reducing benefits for future employees, raising the retirement age, requiring employees to pay more into UC's pension fund and boosting tuition.

The fatter executive retirement benefits the employees are seeking would add $5.5 million a year to the pension liability, UC has estimated, plus $51 million more to make the changes retroactive to 2007, as the executives are demanding.

The executives fashioned their demand as a direct challenge to UC President Mark Yudof, who opposes the increase.

'Forcing resolution in the courts will put 200 of the University's most senior, most visible current and former executives and faculty leaders in public contention with the President and the Board,' they wrote.

Background to the Case
Here is the relevant background:

The roots of the pension dispute go back to 1999, five years after the IRS limited how much compensation could be included in retirement package calculations. But even after the IRS granted UC's waiver in 2007, nothing changed.

University executives were having troubles of their own that year.

President Robert Dynes resigned in 2007 after it was discovered that UC was awarding secret bonuses, perks and extra pay to executives. State auditors also found that UC's compensation practices were riddled with errors and policy violations.

UC officials also had become aware of another big problem: UC's pension obligations were about to outstrip its ability to pay retirees. Neither UC nor its employees had paid into the fund since 1990.

It took until this year for UC to act. In September, a retirement task force offered Yudof several options for closing the $21.6 billion gap - and one to widen it: increasing executive pensions.

Health Care Executives Included

Note that in addition to a bunch of finance officers and portfolio and asset managers, the demanding executives included quite a few leaders of the medical schools, and academic medical centers, including:

UC System's Central Office
Dr. Jack Stobo, senior vice president, health services and affairs

UCSF
Dr. Sam Hawgood, vice chancellor and dean, School of Medicine
Ken Jones, chief operating officer, medical center
Mark Laret, CEO, medical center
Larry Lotenero chief information officer, medical center
John Plotts, senior vice chancellor

UC Davis
William McGowan, CFO, health system
Dr. Claire Pomeroy, CEO health system, vice chancellor/dean, School of Medicine
Ann Madden Rice, CEO Medical Center

UCLA
Dr. David Feinberg, CEO of the hospital system; associate vice chancellor
Dr. Gerald Levey, dean emeritus
Virginia McFerran, chief information officer of the health system
Amir Dan Rubin, chief operating officer of the hospital system
Dr. J. Thomas Rosenthal, chief medical officer of the hospital system; associate vice chancellor
Paul Staton, chief financial officer of the hospital system

UC San Diego
Dr. David Brenner, vice chancellor for health sciences; dean of the School of Medicine
Tom Jackiewicz, CEO, associate vice chancellor of the health system
Dr. Thomas McAfee, dean for clinical affairs

UC Irvine
Terry Belmont, CEO, Medical Center

The Outraged Reaction
The executives' demands sparked anger on campus.

Dissenting members of the task force said it would be unseemly' to expand executive pensions. Tuition had just been increased by 32 percent this fall, and the regents were poised to raise it another 8 percent for fall 2011. They also voted to shift more money into the retirement fund from employees' pockets, as low-wage workers worried about retiring into poverty.

'I think it's pretty outrageous that this group of highly compensated administrators of a public university are challenging the president and the chair of the Board of Regents, said Daniel Simmons, chairman of UC's Academic Senate and a law professor at UC Davis.

'What outrages me the most is that these 36 people are blind to the fact that this is a public entity in dire straits,' said Simmons, who also served on the retirement task force and opposed the higher pensions.

The demands prompted outrage from politicians and editorialists. A few choice samples:

- The executives are "tarnishing the university's name with greed," editorial (UCLA) Daily Bruin.

- "Very out of touch," by Governor Elect Jerry Brown; "truly living in an ivory tower...." while "people are suffering in the rest of the state and losing their homes," by Assemblyman Jerry Hill, D- San Mateo (per the San Francisco Chronicle)

- "Uncaring and divisive," "undercuts public support for one of California's most treasured institutions," "sending out its own special-interest message: what's in it for me," - editorial, San Francisco Chronicle.

- "despicable threat," the California Regents (UC board of trustees) should not "claim that lavish pension may be needed to recruit good people to UC. Good people don't threaten lawsuits against a cash-strapped sate to enrich themselves." editorial, Sacramento Bee.

- Governor-Elect B4rown should issue an executive order "to eliminate any position in the University of California system paying $245,000 a year or more," (thus effectively firing all the 36 complaining executives); "free taxpayers and students alike from the tyranny of those whose main objective during any time - tough or otherwise - is to keep milking the state for every penny the can squeeze out," editorial, Manteca Bulletin.

Summary

We have posted frequently about hired managers and executives of health care organizations receiving compensation and benefits out of all proportion to their apparent performance. The case of the demanding University of California executives is just one of many. However, what is really remarkable about this case is the reaction to it. We are hearing top leaders, including many of the top leaders of the state's medical schools and academic medical centers, called uncaring, greedy, and despicable by well-known politicians and in newspaper editorials, and we are hearing calls that they be fired, en masse.

Maybe we are at a tipping point.

Of course, hired health care managers and executives are not entitled to line their own pockets while patients and their other constituencies suffer during the great recession. They are not entitled to continually drive health care costs up while they enrich themselves.

However, apathy, learned helplessness, and the anechoic effect have let them promote themselves into a de facto new aristocracy (just like the hired managers and executives of some other non-profit organizations, for-profit corporations, and especially financial service corporations have turned themselves into the rest of that aristocracy.)

If we do not reclaim health care from these new oligarchs, we will all end up not just with expensive, difficult to access, mediocre health care, but under their tyranny.

Post-Script

This is just the latest example of the sense of entitlement displayed by the hired managers and executives of the University of California. Outrageous pay and benefits unjustified by any measure of performance for University of California's hired managers and executives has been grist for the Health Care Renewal mill since 2005.  A few samples:
-  The ranks of those paid more than $200 K rose much faster than those paid less, while lower paid employees endured a pay freeze, and the university cut its budget.  Managers got bonuses for extra work, while faculty did not.  Managers got housing allowances, and other perks.  (November, 2005) 
- UC-Irvine managers were paid lavishly while presiding over debacles involving transplant services  (liver transplants, November, 2005; bone marrow transplants, January, 2006; kidney transplants, January, 2006)
- UC - San Diego Chancellor was paid $359 K plus a bonus of $248 K for supposed full time work while serving on ten for-profit corporate and non-profit boards, including directorships of for-profit health care corporations that were conflicts of interest with her role overseeing the medical school and medical center.  This was the first case of what we later called the "new species of conflicts of interest" posted on the blog.  (January, 2006)
- UC - Irvine managers got bonuses while its medical center failed an inspection (January, 2010), as did managers at other UC campuses (January, 2010).

Maybe if these older stories produced more outraged, the current situation would not have occurred.

You heard it first on Health Care Renewal

Hat tip to Prof Margaret Soltan on the University Diaries blog.

More California Medical Centers Plagued by Quality Problems While Their Executives Get Bonuses for "Improved Patient Care"

Earlier this week, we noted that while executives at one University of California medical center were getting large bonuses supposedly for "improved patient health," the hospital was being cited for serious health care quality deficiencies.  Now, more stories have appeared that raise questions about the rationale for the generous bonuses handed out to multiple top hospital executives at University of California hospitals. 

University of California - San Diego

First, in alphabetical order by city, the San Diego Union-Tribune reported on penalties for poor quality care announced by the California Department of Public Health:

UCSD Medical Center in San Diego was fined $50,000.... The state said the hospital staff failed to follow its surgical policies and procedures, which resulted in a patient having to have a second surgery to remove a foreign object — a guide wire that was left in the patient when a central venous catheter was inserted into the patient’s right femoral vein in the groin area in January 2009. The wire migrated into a chamber of the patient’s heart.

The procedure was done by a first-year intern and supervised by a third-year resident.

This marks the third time the state has penalized UCSD, with the first penalty issued in May 2008 and the second in May 2009.

However, a few days earlier, the Union-Tribune had reported:

Despite criticism from union leaders and rank-and-file employees, University of California regents yesterday overwhelmingly approved $3.1 million in incentive payouts to 38 medical center executives.

The payouts mean, for instance, that former UC San Diego Medical Center CEO Richard Liekweg will receive $136,174 in performance pay for the last fiscal year, added to his base of $660,500.

Regents justified the payments by noting that incentive programs are common in the health care industry, and necessary to compete for top talent.

'It’s the way this industry works,' said Regent William De La Pena, an ophthalmologist and medical director of eye clinics throughout Southern California.

At UCSD Medical Center, 10 senior managers will receive a combined $754,650 for surpassing goals set in areas ranging from improved patient safety to increased revenue. The bonuses amount to 14 to 23 percent added to executives’ salaries.

University of California - San Francisco
Meanwhile, the San Francisco Chronicle reported that a major University of California - San Francisco teaching hospital was also cited by the state Department of Public Health for quality problems:

San Francisco General was fined $25,000 for leaving a piece of surgical gauze in a patient who underwent an eight-hour operation for two types of cancer in September 2008. The foreign object was discovered about three months later and was removed without surgery during an office visit.

The Chronicle also reported a possibly major breach in the confidentiality of patient records at the UCSF Medical Center:

Medical records for about 4,400 UCSF patients are at risk after thieves stole a laptop from a medical school employee in November, UCSF officials said Wednesday.

The laptop, which was stolen on or about Nov. 30 from a plane as the employee was traveling, was found in Southern California on Jan. 8.

There is no indication that unauthorized access to the files or the laptop actually took place, UCSF officials said, but patients' names, medical record numbers, ages and clinical information were potentially exposed.

The security breach is UCSF's second in recent months. Last month, UCSF officials revealed that a faculty physician responding to an Internet 'phishing' scam potentially exposed the personal information of about 600 patients.

However, despite these obvious quality problems, the San Francisco Business Times reported

University of California regents approved $500,000 in bonuses to six top officials at the UC San Francisco Medical Center, part of a package of $3.1 million in payments to 38 hospital executives across the UC system.

In an interview last week with UCSF Chancellor Susan Desmond-Hellman, she said that the executive bonuses were tied to meeting specific performance goals, such as reducing clinical infections and increasing satisfaction ratings by patients. She also pointed out that additional payments of $14.3 million to the UCSF Medical Center’s 6,600-strong workforce were approved earlier.

The UCSF officials awarded bonuses were:

* Mark Laret, chief executive officer, $181,227;
* Ken Jones, chief financial officer, interim chief operating officer, $89,162;
* Larry Lotenero, chief information officer, $66,045;
* John Harris, chief strategy and business development officer, $63,196;
* Susan Moore, finance director and interim chief financial officer, $53,261; and
* Sheila Antrum, chief nursing/patient care services officer, $49,280.

Summary

So, in summary, multiple executives at three major University of California medical centers received generous bonuses.  The rationale for these bonuses, given out at a time when the university system was under major financial constraints, was that they were incentives for exemplary performance and patient care. 

Yet almost simultaneous with announcement of the bonuses were news reports indicating serious patient care problems at the same medical centers.  The point I am NOT trying to make is that the care at any of these medical centers is bad.  The examples of quality problems were limited.  I am sure that many other major medical centers hae had such quality problems as well.  However, the cases cited above were sufficient to argue that the care at these medical centers was not outstanding, not exemplary.  Yet, the bonuses were awarded not for acceptable performance or average quality.  Their rationale was exceptional performance and quality.  Thus, the rationale for the performance bonuses seems at best naive, if not foolish. 

I would suggest, instead, that the sorts of bonuses given out at the University of California are a product of the current management culture that has been infused into nearly every health care organization in the US.  That culture holds that managers are different from you and me.  They are entitled to a special share of other people's money.  Because of their innate and self-evident brilliance, they are entitled to become rich.  This entitlement exists even when the economy, or the financial performance of the specific organization prevents other people from making any economic progress.  This entitlement exists even if those other poeple actually do the work, and ultimately provide the money that sustains the organization. 

Although the executives of not-for-profit health care organizations generally make far less than executives of for-profit health care corporations, collectively, hired managers of even not-for-profit health care organizations have become richer and richer at a time when most Americans, including many health professionals, and most primary care physicians, have seen their incomes stagnate or fall.  They are less and less restrainted by passive, if not crony boards, and more and more unaccountable.  In a kind of multi-centric coup d'etat of the hired managers, they have become our new de facto aristocracy. 

Or as we wrote in our previous post, executive compensation in health care seems best described as Prof Mintzberg described compensation for finance CEOs, "All this compensation madness is not about markets or talents or incentives, but rather about insiders hijacking established institutions for their personal benefit." As it did in finance, compensation madness is likely to keep the health care bubble inflating until it bursts, with the expected adverse consequences. Meanwhile, I say again, if health care reformers really care about improving access and controlling costs, they will have to have the courage to confront the powerful and self-interested leaders who benefit so well from their previously mission-driven organizations.  It is time to reverse the coup d'etat of the hired managers.

More Reports on the Compensation of Top University of California Leaders: "A System That Is Out of Control"

More reports have been published over how the sprawling University of California (UC) system has been managed. They do not paint a pretty picture.

First, as reported by the Los Angeles Times, an independent audit by PriceWaterhouseCoopers found that "in more than half of the 64 cases detailed, UC provided extra pay or benefits to its top administrators as policy exceptions or without explicit approval from the regents." The Times reported "an increasingly detailed picture of a university leadership that has made policy exceptions seemingly at will and without regard for its responsibility to inform the regents or the public." Furthermore, "some compensation for a number employees, including the extra income for [UC President Robert C] Dynes, was not reported to the Internal Revenue Service."

Then, the San Francisco Chronicle reported that "the state Legislature's legal adviser says the University of California regents have violated state open-meeting laws by voting behind closed doors on executive pay packages." In response, state Sen. Jeff Denharm (R-Salinas) said, "UC needs a little less autonomy and a lot more watchdogging."

Finally, the Los Angeles Times reported that "a state audit released Tuesday found the University of California's system of compensating its highest-paid managers and professors is riddled with irregularities and that UC leaders repeatedly failed to disclose key specifics to university regents." Furthermore, "the highest-paid employees appeared to have received a disproportionate share of the extras. The report found that 4,071 UC employees who earned more than $168,000 a year accounted for about 10% of the regular compensation, but 26% of additional pay." One particular example of the irregularities was "the complicated arrangement that was designed to allow Edward W. Holmes, the dean of the [UC-San Diego] medical school, to keep the value of stock received as compensation for serving on a scientific advisory board - an action , the auditor said that circumvented university policy. The pay arrangement, the auditor said, also caused the university to overpay Holmes by $130,000. What's more, UC San Diego officials decided not to ask for repayment because they did not want to 'penalize' the dean for the campus' errors. A UC San Diego spokeswoman, Stacie Spector, said Holmes was traveling and unavailable for comment."

The reaction from state legislators, according to the San Francisco Chronicle, was harsh. Assemblyman Pedro Nava (D-Santa Barbara) said, "what we are facing is a system that is out of control." Then the Chronicle reported that "three members of the state Senate Education Committee called Wednesday for the resignation or firing of University of California President Robert Dynes, saying the public trust in his leadership has been broken by a compensation scandal over the past six months." Senate Majority Leader Gloria Romero (D- Los Angeles) said, "at first it seemed that President Dynes would take responsibility for these numerous problems. As time went on, it somehow became the system (that was at fault). He is the system He is the man, and this system ... deserves accountability and leadership.... The buck stops here."

In summary, the picture painted is of top university leaders who have quietly rewarded themselves more than allowed by their own rules, and then failed to take responsibility for these actions. Here is another example of top health care leaders who seem to believe they are very different from you and me. Given how often health care leaders seem to put their personal agendas ahead of their organizations' missions, is it any wonder that health care costs inexorably go up while access and quality do not.

California State Legislators Notice Conflicts of Interest at the University of California

The San Francisco Chronicle reported that California state legislators have begun to pay attention to what the top leaders of the University of California have been doing after hours.

We have discussed the ongoing controversy about generous pay, perks and benefits given to the leaders of the University of California, including those who oversee the system's medical schools and academic medical centers.

The legislators are now concerned that some of their highly compensated university leaders are spending too much time on outside activities, after a report surfaced that University of California - San Diego (UCSD)Chancellor Marye Ann Fox serves on 10 for-profit corporate and not-for-profit organizational boards. California Senator Jack Scott, chairman of the Senate Education Committee, said "there needs to be a limit placed on the number of boards. I don't know what the magic number would be, but the Board of Regents ought to set a limit."

The Chronicle also reported that information about the board service of other UC leaders is beginning to surface, although none also obviously involved a leader of medical school or medical center being a director of a health care company.

More significantly, the legislators are beginning to worry that service on some particular boards might generate conflicts of interest. The Chronicle quoted Charles Elson, director of the John L Weinberg Center for Corporate Governance at the University of Delaware, "if you get on a board expecting a donation [to your not-for-profit institution from the corporation], it is exactly the wrong thing to do. You might argue it is good for your institution, but it is not good for the investors who elected you."

Of course, as we posted earlier, Fox's service on the boards of Boston Scientific and Pharmaceutical Product Development Inc generate another kind of conflict. The medical school and medical center which report to her may deal with these companies, and their competitors, as purchasers and venders. For example, the medical center doubtless purchases a considerable volume of the sorts of devices Boston Scientific makes, and may do externally funded research on such devices as well. These conflicts have potential down-sides for the companies and for UCSD.

Maybe at some point someone in the California legislature or on the state's Board of Regents will notice these conflicts too.

Academic Medical Leaders as Corporate Directors

There is yet one more story out of the University of California.

The San Diego Union-Tribune reported that the Chairman of the UC Board of Regents is upset about the number of corporate boards the Chancellor of UC- San Diego sits on. (We had previously posted on this story here.)

UC-SD Chancellor Marye Ann Fox was reported to be on the boards of ten (that's 10) for-profit corporations and not-for-profit organizations. In response, the Union-Tribune reported, "UC Regent Chairman Gerry Parsky said the system needs to ensure chancellors keep the university as their top priority and that any benefits board memberships may bring to the university aren't outweighed by excessive demands on their time." But, "in the past, regents have deferred to UC President Robert Dynes regarding chancellors' compensation and outside activities."

"Fox, 58, an organic chemist, has said she will not step down from any corporate boards because she considers her service a boon to the university."

All things involved in managing and directing and envisioning for corporate entities are virtually the same things you have to do for universities.

In my humble opinion, however, the bigger issue is not how many boards she serves on, but the clear, substantial conflicts of interest entailed by her service as a Director of Boston Scientific, a medical device manufacturer, and of Pharmaceutical Product Development Inc, a pharmaceutical contract research organization.

As a Director, she has a fiduciary responsibility to look out for the interests of each of these companies, and for the financial interests of their stockholders. Yet as the Chancellor of UCSD, to whom the Medical School and the Medical Center report, she has a responsibility to ensure the quality of the patient care, medical teaching and research at those institutions.

Given that the School and Medical Center doubtless use in quantity the sorts of medical devices that Boston Scientific produces, and doubtless do the sort of research that Pharmaceutical Product Development is interested in, how on earth could she make decisions that always conform to these responsibilities?

And what sort of decisions are her subordinates, managers and executives at the medical school and medical center, likely to make about medical devices and about pharmaceutical research, knowing that they report to a Director of Boston Scientific and a Director of Pharmaceutical Product Development Inc?

In summary, any leaders of medical schools or academic centers, or academic leaders to whom they report, who also are directors of a pharmaceutical, medical device, health care IT, contract research, managed care, health insurance, or other health care related corporation havea clear, substantial conflicts of interest.

These sorts of conflict of interest are orders of magnitude more important than those created by physicians accepting the pens and coffee mugs Brennan et al were so worried about in their article in JAMA. (See post here.)
Yet Brennan et al ignored the existence of these conflicts, which, I must admit, have hardly been discussed on the medical and health care literature.

If we are so worried about pens and coffee mugs (and we should we), why aren't we addressing academic medical school leaders who also sit as directors of health care corporations?

Fox is hardly the only one.

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.