Just got 269 pages of documents with a summary.
The summary supports previous claims of major financial mismanagement– if not worse. Oversight by Foundation Board was feeble if not inadequate. The Board shares blame with former President Ramsey and other University executives.
You can read the executive summary here.
Statements by current UofL President and Chairs of UofL Trustees and Foundation affirm their commitment to transparency and emphasize that the report reflects the management of previous administrations and boards.
Bad enough to put people in jail or to claw-back money? We’ll have to see.
More when I dig into the details.
Here is a copy of the entire document. (6.7 MB) What do you see that sticks out as either good or bad?
Peter Hasselbacher, MD
8 June 2017
At least 447 Medicare outpatient drugs had prices more than double between 2011 and 2015 and 36 increased their prices ten-fold!
In every week of recent months our attention is being called to one or another exorbitant or unexplainable increase in the price of yet another prescription drug. We have long recognized continuously rising prices for brand-name drugs, but the new business model of the pharmaceutical industry includes taking control of the distribution of traditionally generic drugs and jacking prices up even faster and higher than their brand-name cousins– if that is even possible. It appears that the more medically-necessary or lifesaving the drug is, the higher the price increases are. This is what happens in a free market environment when an industry has its consumers over a barrel and is free to have its way with them.
Some poster-children of the trend include the anti-parasitic drug pyrimethamine (Daraprim) which is essential to treat certain infections in immunosuppressed people and whose price per tablet increased from $13.50 to $750 overnight; the EpiPen injector system used to administer epinephrine to people entering anaphylactic shock; insulin for diabetes; Plaquenil, and more recently Suboxone, the drug used to help manage opioid addiction. As I will show below, there are many more drugs with recently inflated prices still cruising below the radar! Continue reading “Exorbitant Increases in Prescription Drug Prices Neither New Nor Uncommon.”
The Executive Committee of the UofL Board of Trustees is assembling now. The executive committee can act for the whole. I predict it will vote on the relationship with KentuckyOne Health. It is likely the vote will involve severance of the joint operating agreements. UMC would then take control of the entire Hospital. From what I have heard, and because of recent financial events, I will be surprised if this does not happen.
Tomorrow the State Auditor will announce the results of the audit of the relationship between the University and its Foundation. I understand that the audit will not be kind.
We will soon know more.
Endowment growth stalling compared to other institutions.
Numerous earlier reports by Mr. Chris Otts of WDRB brought to the attention of the public information about financial dealings of enough concern that at least two major donors to the University of Louisville withdraw their support, triggering in large measure an intervention by the University of Board of Trustees to take a more controlling role in the University of Louisville Foundation and a full-scale fiduciary audit. This latter offers the potential to clear the air or to lead to even more troublesome revelations. Mr. Otts’s latest report deals with unauthorized spending of the University’s endowment by the Foundation in support of its commercial research, real estate, and other agendas both known and unknown. The result has been a substantial fall in the value of the endowment as its principal is consumed.
Sparked by Mr. Otts’s use of information provided to him by the University as reported to the American Association of College and University Business Officers (NACUBO); and by comments made by Trustees Greenberg and Benz at last week’s meeting of UofL Trustees raising serious concerns about the endowment; I went to NACUBO’s website myself. Summary files for public use are available including the market values of the endowments of some 850 of the most important Colleges and Universities in the US and Canada from 1990 to 2015. I abstracted these and plotted the market value of UofL’s endowment along with its rank among other institutions in this regard. Spending information or investment yields for individual institutions are not made available to the public, although summary statistics on aggregates in broad categories are available. A static image is presented below, and an interactive version revealing the underlying data is available.
In summary, the amount of our endowment rose progressively from 1990 until around 2007 after which much volatility occurred to the point that the market value of the endowment in 2016 is indeed less than it was 10 years ago in 2006! UofL appears to be eating its nest egg, and compared to other institutions of higher education, is losing ground in endowment growth.
Continue reading “Drop In Value of UofL Endowment Confirmed.”
Financial stresses abound.
In the space of a week, Moody’s Investor Services released credit opinions for the University of Louisville and the University of Louisville Foundation; and Catholic Health Initiatives published its Annual Report for the Fiscal year ending June 30, 2016. The results were not very pretty. The rating for the bulk of the University’s existing bonds dropped one grade to A1 with an outlook determined to be stable. The Foundation did not fare as well. Its rating dropped three steps to A3 with an outlook revised to negative. Catholic Health Initiatives disclosed operating and non-operating losses totaling $667 million. CHI had declines in its own bond ratings earlier this year, due largely to excessive debt reported to stand at $9 Billion as it seeks to partner or merge with another Catholic hospital chain. The drops in grade and financial losses are by themselves troubling. However, language in the details of the reports links the organizations together, highlights the harmful consequences of recent management and political manipulations on the University, overestimates the health of current business relationships between the parties, and underestimates the impact of promised roll-backs to Medicaid and the Affordable Care Act on the financial health of our local hospitals and the University. For these reasons, I fear that things are going to get worse before they get better. Continue reading “Credit Ratings for UofL, UofL Foundation, and CHI Downgraded.”
Later this morning, the Board of Directors of the University of Louisville Foundation will meet to discuss matters crucial to its future relationship to the University of Louisville. Following the forced resignation of former UofL Pres. James Ramsey, a Foundation board comprised largely of friends and appointees of Ramsey seems more interested in protecting his legacy and image than in facing up to the wholesale loss of confidence in the Foundation by the community. Having been forced to partially lift the curtain on its internal activities, and in the face of refusal to fully disclose its confusing if not inappropriate financial machinations to University of Louisville trustees, the Foundation still clings to the incomprehensible belief that it has the right to select and oversee the outside entity that will audit its financial activities. If allowed to do so, the Foundation would thus define both the scope of such an examination and control the dissemination of its result. After all, he who pays the piper calls the tune. All this from a Board of Directors that appeared prepared to retain Ramsey as President of the Foundation and award him even more money from the University’s assets. Of course, it is possible that more than just protecting Ramsey’s reputation is at stake. As yet undocumented allegations of financial mismanagement or worse are circulating. Certainly it is in the interest of the entire University community that no doubts remain after a long-overdue, no-holds-barred audit of the vaults of the Foundation. It is follow the money time! Continue reading “Ramsey Supporters on UofL Foundation Resisting Oversight by University Trustees.”
We are not ready in so many ways.
Given that the Zika virus and the mosquitoes that carry it from one human to another have been advancing north from South America through the Caribbean and Mexico, and that parts of the USA share the same permissive semi-tropical environments necessary for the disease to spread, most public health scientists and officials have assumed that home-grown Zika disease and its sequela would show up in the course of time. Officials in North Miami, Florida believe that time has come. Even with all the warning in the world, Congress could not be persuaded to act before leaving Washington for vacation. Imagine, public health being sacrificed at the altar of political control and the national shackling of anything having to do with women’s health policy to a self-defined pro-life lobby and the religious dogma that supports it. The failure to prepare now, as it has been in the past, is all about control of the levers of power that drives political life.
People, including pregnant women who have contracted Zika virus, have been present in the USA for some time, having caught the disease while traveling abroad in endemic areas, or having acquired the disease sexually from partners who did the traveling for them. (Yes, Zeka is also a sexually-transmitted disease.) Since the virus can linger for months in various places within the human body, we can assume that transfer of the disease by nonsexual intimate contact or exposure to body fluids is also possible. Blood donors in parts of Florida are already being told not to do so, and testing of donated blood for the virus more broadly is being advocated. It is likely that Zika is here to stay for a while, if not forever. “So what?” you may ask. Continue reading “They’re Here! Zika-bearing Mosquitoes now present in USA.”
Old habits die hard.
For those hoping for a “fresh start” at the University of Louisville, last Wednesday’s Board of Trustees meeting must have been more than a little disappointing. Earlier in the day, the Attorney General requested that the Board take no actions with long-term consequences until the matter of the legality of its appointment process is adjudicated by the courts. The day before the meeting, one of the newly appointed trustees resigned, presumably because his public statements about science, religion, and minorities generated too much public opposition – in my opinion a failure of the vetting process. He was replaced by another nominee from the list of 30 generated by the Governor’s Postsecondary Education Nominating Committee who also happens to be a partner in the law firm that handles the bulk of the University’s outsourced legal work. The replacement trustee is a well-respected and competent individual, and there is absolutely nothing wrong with attorneys serving on nonprofit boards. However, if I were an attorney seeking some of the University’s business, or a party in opposition to the University in some litigation, I would see such an appointment as more of the inside baseball that is often attributed to UofL. Continue reading “First Meeting of UofL Board. Fresh Start or Not?”
Not just any virus – Worse on the fetus than we thought!
Abortion debate brought to the forefront.
Medical scientists have been racing to understand the epidemic of Zika virus worldwide but particularly, because of the rapidity of spread and the number of persons infected, in the Western Hemisphere. Much is still unknown, there is no effective treatment or vaccine, diagnostic tests are not readily available, and there appear to be substantial’ morbidities to developing fetuses and adults alike. The disease is known to be spread by mosquitoes, through sexual contact, and probably blood transfusion. It is not surprising that concern over Zika virus is changing people’s travel plans including to the 2016 Summer Olympics in Rio de Janeiro, Brazil. It is causing aditional and justifiable concern to pregnant women and their partners, especially those without access to contraception or safe abortion. Continue reading “Emerging Research About Zika Virus.”
Kentucky Gov. Steven Beshear is taking some heat for not including an African-American among his latest round of appointments to the University of Louisville Board of Trustees. Criticism from the community included claims that by passing over three available African-American nominees for the positions, that the Board was without an African-American member for the first time in many years and in fact violated state law. This is incorrect. The Board currently has as its student representative a female African-American trustee who, if she follows precedent, will not be a potted plant. Nonetheless, attention to the makeup of the Board is a matter that should be of considerable concern to the public. The UofL Board itself has been regularly in the news for some time, and is likely to remain there a good bit longer given rising community concern over University governance (or frequent apparent lack of governance), executive compensation, tuition increases, political contributions by Board members, probation of academic units, lawsuits against major former partners, scandals and outright criminal activities involving a few employees and faculty, high-profile separations or dismissals– including some with golden parachutes and non-disclosure agreements, a troubled partnership with a religious organization that is tearing the downtown medical center apart, or whatever other story-of-the-week keeps the pot of concern bubbling. I confess to helping keep the heat on. Fueled by secrecy and non-stop controversial revelations, our University’s reputation is being damaged. Demands for accountability have past the point that they can be ignored. It is therefore useful to examine how it is that board members of the various state universities and the community and technical colleges are selected. The process is defined in detail by state law but it is obvious to me that existing statutory requirements are being be followed loosely if at all. Let me explain. Continue reading “UofL Board of Trustees Under The Microscope.”