UofL plays chicken with state and local officials.

[Addendum, June 14. On reading this morning’s printed report in the Courier-Journal, I clearly misinterpreted the University’s motivation.  This was no hat-in-hand response to community criticism, but a continuation of the threatening and even bullying behaviors of the past.]

This evening, the Courier-Journal reported on its website that at a earlier meeting with its editorial board, officials of the Medical School and presumably its Hospital, said that they will “cut in half the money they give the University of Louisville Health Sciences Center, ” from $11 to $5.5 Million. They follow up with an additional statement that perhaps next year they might decrease that amount even more!  At the time I was interviewed, I initially [and incorrectly] assumed that the University felt compelled to make some  reduction in response to criticism from the community about its funding of research at a time when it was crying poor!  It was increasingly hard to swallow the Hospital’s claim of having not enough money for indigent care when they were giving in excess of $12 million to research every year!

I was quoted as giving the University credit for the move, but I also expressed my [incorrect] assumption that they must have felt compelled to yield at least a little from their previous position of funding research.  What is really needed here is a demand for institutional transparency and accountability, and a full financial audit without which even the $5.5 million cut may be illusionary: in other words, just another shell game. Give us the full truth, and nothing but the truth. What has happened to your funding of research and other money funneled to clinical faculty and their departments?  Does all this mean that the $12-14 Million that has always been targeted for research is going to arrive on schedule? (Funding research at the expense of scholarships and teaching programs is not a new initiative at the School of Medicine. I have been in the room when plans were made.)

What is really going on here is that the University is trying to set the content and vocabulary of the debate such that the only perceived way out of its current self-defined financial predicament is a merger with Catholic Health Initiatives and KentuckyOne Health. Thus the chicken-little claims that, “We can no longer take care of the poor.  Patients will die. We can no longer educate your children.”  Do not be spooked by these self-serving assertions without full financial disclosure to back them up.

Plenty of money still flows.
The promised cut is only a small fraction of the money transferred annually from Hospital accounts to University accounts. Take a look at this table that the University made public earlier this year when it had to disclose at least a minimal amount of information to potential responders to its RFP for a new partner.  While crying poor, the Hospital has been giving stunning amounts of money to the Medical School and University for vaguely defined justifications.

A total of almost $75 million was budgeted for 2012. (Seems to me that a 50% cut would total some $37 million.) From which of these 8 categories are the specified funds for teaching programs coming from? The promised cut of $5.5 million is only 7.4% of the amount the University even admits to. This is only slightly more than the 6% increase in tuition for UofL students this year. Presumably the University can handle the challenge also.

More to the point, I bet only a handful of people in the world have any idea what the hospital is buying for the $75 million. What could “Chair support” be, other than discretional funds? Tell us.  Five million dollars buys a lot of Medical directors. If there are 100, that is $50,000 each per year. Is that what it takes to convince faculty doctors to use the hospital? I bet no other hospital in town has so many medical directors or pays so much for them. If I were an inspector general I would want to take a look. Our Metro Council members and Auditor’s office should look also. There are some $41 million dollars given to the University by the Hospital for “Professional services, Academic support, and Other.” Give me a break! Money sloshes around in these budgets like water in a tub. Without a real accounting, the consequences of even the University’s announced cut will be impossible to discern. Remember, the responsible posture of our community with respect to the University of Louisville is “to trust, but verify, and get it in writing.”

The discussion above does not even being to tackle the more than $150 million transferred yearly to the University of Louisville Research Foundation from the clinics and laboratories of the medical center. I suspect even fewer people in the world know where this money comes from or goes. Inquiring minds would like to know. GME means graduate medical education and likely includes housestaff salary for which the hospital receives payment from several government sources. This might be a legitimate pass-through. What has never seemed right to me is why the University should pay rent for the hospital. I think we are due a full explanation of this apparent payment by the Hospital back to the state or its agent  before legislators rattle their budget-cutting sabers at the Hospital again. Frankfort has also made its share of incomprehensible deals with the University.

My recommendations to state and local government officials are these: By all means keep University Hospital afloat, but do it on your terms and on the public’s behalf, not the University of Louisville’s increasingly self-serving ones. Please, no more enabling behavior on your part. Do not yield to threatening tactics.  You have some responsibility for how we have come to where we are. Tough love is in order. Keep the interests of the medically underserved uppermost in your minds, not private equity and other commercial interests for whom the University has become a playground. Trust but verify! You can tell the difference between puff-piece advocacy and an honest budget accounting. The University likes to say that the status quo is non-sustainable. I agree.  That does not mean that the University of Louisville gets to call the shots or that merger with Catholic Health Initiatives is the only solution. Misuse of government funding by the University should not be rewarded in this way. The University of Louisville needs to recommit itself to our community and begin to earn back from us the confidence it has squandered.

Peter Hasselbacher, MD
President, KHPI
Emeritus Professor of Medicine, UofL

June 13, 2012, Edited June 14.