Blast from the Anechoic Past: Former UCI Fertility Doctor Arrested in Mexico

Soon after we started Health Care Renewal, we ran a series of posts about the University of California-Irvine (UCI) medical school and medical center, featuring stories of mismanagement of major programs, especially those involving organ transplantation (liver, kidney, and bone marrow) while the top executives who presided over the mess received generous compensation, sometimes in strikingly irregular ways, and while at least one whistle-blower alleged he lost his job for complaining about safety issues.  Some of the stories went back another 10 years, to 1995.  One particularly striking story involved the UCI infertility program.  Three physicians were accused of stealing ova from some women to implant in others.  One physician was convicted, and two fled the country (see post here).

One of those physicians just turned up.  As reported by ABC News at the end of 2010:

U.S. authorities are working to extradite one of the doctors accused of being behind of the biggest fertility scandals in history. Mexican authorities arrested Dr. Ricardo Asch last month.

Back in the 1990s, Asch and another fertility doctor, Jose Balmaceda, were charged with stealing embryos and eggs belonging to dozens of women who sought treatment at the University of California-Irvine Center for Reproductive Health and implanting them into other women.

They are also accused of not reporting more than $1 million in earnings, and fleeing the country to avoid prosecution.

Marla McCutcheon is one of the women who says she was victimized by Asch. She was one of his patients until she decided to switch physicians because she said she found him 'uncaring.'

McCutcheon, from Irvine, Calif., says she found out years later that after she'd left Asch's care that there were leftover eggs she didn't know about. To this day, she doesn't know what happened to those eggs.

'I would have done anything for those eggs at that time. It's still hard for me to grasp that there might be something to my eggs. Someone may have been able to get pregnant from them,' McCutcheon said.

At the time of the scandal, ABC News saw documents showing that more than 60 other women who were patients at the fertility center had eggs taken from them without their consent. Asch, however, said he knew nothing about it. During the time the incidents occurred, it was not illegal to transfer human tissue without consent.

The case had major repercussions for how fertility clinics operate:

The scandal allegedly involving Asch, Balmaceda and another doctor, Sergio Stone, rocked the field of reproductive medicine, and doctors say they still feel its effects.

'Reproductive medicine is very new. It's come a long way and we've made tremendous progress, but because of scientific advances, it's very high-profile,' said Dr. Jani Jensen, a Mayo Clinic reproductive endocrinologist in Rochester, Minn. 'Whenever there are publicized incidents like this that involve ethical issues, it's sometimes difficult to engender the public's trust.'

Dr. Howard Zacur, director of the Division of Reproductive Endocrinology and Infertility at the Johns Hopkins Fertility Center in Baltimore, Md., said patients still want reassurance their eggs and embryos will be protected from these types of incidents.

It is now against the law in California to take eggs from a woman without her consent.

Note that the disconnect between problematic quality of care at UCI and the generous compensation afforded its top leaders continued through 2010, as this post discussed.

Aside from its colorfulness, there are other reasons to recall the story of the stolen ova and the subsequent troubles at UCI.  First, the list of problems over 15 years discussed in our series of posts suggests an institution whose leadership culture is seriously disturbed.  I cannot view the institution from a distance and figure out what the fundamental problems are with its leadership and governance, but there must be some.  (Note that per a 2006 post, an internal report did fault lack of accountability, leadership by people with no medical background, absence of clear reporting lines, and the overlooking of whistleblowers, but these are just descriptions of bad management and governance, not explanations of them.  Furthermore, it is not clear whether there have been any fundamental changes in leadership or governance since then.  If there readers know there is more to this, please let me know in the comments section below.)

Second, this case illustrates how the anechoic effect has decreased recognition that the problems at UCI may be part of more systemic problems.  Despite the number of problems that occurred, their vividness, and their coverage in local media, the troubles at UCI have not gotten national media attention, nor as far as I can tell, have they ever been discussed in the medical, health care, health services research, or health policy literature.  (I have tried multiple Google scholar searches using the institution's name, and keywords including "scandal," and the names of some of the physicians most prominently named in our series of posts, and have found nothing relevant.)  The 15 year history has produced almost no echoes, and hence now has become as striking a black hole in the annals of bad health care leadership and governance as was the case of the fall of the Allegheny Health Education and Research Foundation (AHERF). 

Certain issues that we discuss on Health Care Renewal have become less anechoic, in particular, conflicts of interest caused by academic physicians financial ties to the drug, biotechnology and device industries.  However, the larger issues of mismanagement by lavishly compensated, and hence perversely incentivized executives remains relatively anechoic.  I am not sure how big a scandal it will take to remove the taboo from discussing it. 

Blast from the Anechoic Past: Former UCI Fertility Doctor Arrested in Mexico

Soon after we started Health Care Renewal, we ran a series of posts about the University of California-Irvine (UCI) medical school and medical center, featuring stories of mismanagement of major programs, especially those involving organ transplantation (liver, kidney, and bone marrow) while the top executives who presided over the mess received generous compensation, sometimes in strikingly irregular ways, and while at least one whistle-blower alleged he lost his job for complaining about safety issues.  Some of the stories went back another 10 years, to 1995.  One particularly striking story involved the UCI infertility program.  Three physicians were accused of stealing ova from some women to implant in others.  One physician was convicted, and two fled the country (see post here).

One of those physicians just turned up.  As reported by ABC News at the end of 2010:

U.S. authorities are working to extradite one of the doctors accused of being behind of the biggest fertility scandals in history. Mexican authorities arrested Dr. Ricardo Asch last month.

Back in the 1990s, Asch and another fertility doctor, Jose Balmaceda, were charged with stealing embryos and eggs belonging to dozens of women who sought treatment at the University of California-Irvine Center for Reproductive Health and implanting them into other women.

They are also accused of not reporting more than $1 million in earnings, and fleeing the country to avoid prosecution.

Marla McCutcheon is one of the women who says she was victimized by Asch. She was one of his patients until she decided to switch physicians because she said she found him 'uncaring.'

McCutcheon, from Irvine, Calif., says she found out years later that after she'd left Asch's care that there were leftover eggs she didn't know about. To this day, she doesn't know what happened to those eggs.

'I would have done anything for those eggs at that time. It's still hard for me to grasp that there might be something to my eggs. Someone may have been able to get pregnant from them,' McCutcheon said.

At the time of the scandal, ABC News saw documents showing that more than 60 other women who were patients at the fertility center had eggs taken from them without their consent. Asch, however, said he knew nothing about it. During the time the incidents occurred, it was not illegal to transfer human tissue without consent.

The case had major repercussions for how fertility clinics operate:

The scandal allegedly involving Asch, Balmaceda and another doctor, Sergio Stone, rocked the field of reproductive medicine, and doctors say they still feel its effects.

'Reproductive medicine is very new. It's come a long way and we've made tremendous progress, but because of scientific advances, it's very high-profile,' said Dr. Jani Jensen, a Mayo Clinic reproductive endocrinologist in Rochester, Minn. 'Whenever there are publicized incidents like this that involve ethical issues, it's sometimes difficult to engender the public's trust.'

Dr. Howard Zacur, director of the Division of Reproductive Endocrinology and Infertility at the Johns Hopkins Fertility Center in Baltimore, Md., said patients still want reassurance their eggs and embryos will be protected from these types of incidents.

It is now against the law in California to take eggs from a woman without her consent.

Note that the disconnect between problematic quality of care at UCI and the generous compensation afforded its top leaders continued through 2010, as this post discussed.

Aside from its colorfulness, there are other reasons to recall the story of the stolen ova and the subsequent troubles at UCI.  First, the list of problems over 15 years discussed in our series of posts suggests an institution whose leadership culture is seriously disturbed.  I cannot view the institution from a distance and figure out what the fundamental problems are with its leadership and governance, but there must be some.  (Note that per a 2006 post, an internal report did fault lack of accountability, leadership by people with no medical background, absence of clear reporting lines, and the overlooking of whistleblowers, but these are just descriptions of bad management and governance, not explanations of them.  Furthermore, it is not clear whether there have been any fundamental changes in leadership or governance since then.  If there readers know there is more to this, please let me know in the comments section below.)

Second, this case illustrates how the anechoic effect has decreased recognition that the problems at UCI may be part of more systemic problems.  Despite the number of problems that occurred, their vividness, and their coverage in local media, the troubles at UCI have not gotten national media attention, nor as far as I can tell, have they ever been discussed in the medical, health care, health services research, or health policy literature.  (I have tried multiple Google scholar searches using the institution's name, and keywords including "scandal," and the names of some of the physicians most prominently named in our series of posts, and have found nothing relevant.)  The 15 year history has produced almost no echoes, and hence now has become as striking a black hole in the annals of bad health care leadership and governance as was the case of the fall of the Allegheny Health Education and Research Foundation (AHERF). 

Certain issues that we discuss on Health Care Renewal have become less anechoic, in particular, conflicts of interest caused by academic physicians financial ties to the drug, biotechnology and device industries.  However, the larger issues of mismanagement by lavishly compensated, and hence perversely incentivized executives remains relatively anechoic.  I am not sure how big a scandal it will take to remove the taboo from discussing it. 

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.

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.

UCI Medical Center Fails Inspection, UCI Executives Get Bonuses

Back in the early days of Health Care Renewal, we had many occasions to write about problems with the leadership of the University of California - Irvine (UCI) medical school.  Starting in late 2005, we posted  about various management problems at the institution, involving its liver transplant service, cardiology division, and bone marrow transplant service, (see posts here and here) which lead the new chancellor of the campus to "acknowledge a failure of leadership and accountability" (see post here.) Slightly more recently, we noted the almost 20 year history of questionable financial relationships that involved one of UCI's "biggest stars" in clinical researach and several pharmaceutical companies (see post here).  Then, in 2007, we wrote about some strange contracting practices involving UCI and a local orthopedic practice (see post here).

So it was deja vu all over again when last week the Los Angeles Times reported about the latest batch of problems at UC Irvine Medical Center:

Federal investigators found scores of problems at UC Irvine Medical Center during a fall inspection that again put the troubled hospital's Medicare funding at risk, according to report released Thursday.

In an 85-page report on their surprise October inspection, regulators said they observed poor oversight and mistakes by UCI doctors, nurses and pharmacists, leading to inadequate care that in some cases harmed patients.

Among the findings:

* An 82-year-old man was mistakenly given a narcotic patch by a medical resident, without approval of doctors or pharmacists. The patch led to an overdose that required emergency intervention and may have contributed to his death a week later.

* A patient in the neuropsychiatric unit fell twice in three days and despite yelling 'Help me, doctor, help me,' suffered a head injury and had to be taken to intensive care.

* An on-call resident did not respond to repeated emergency pages from nurses in the neurological intensive care unit, where a patient with an irregular heartbeat languished for more than an hour.

* Pharmacists failed to monitor and store drugs correctly, allowing nurses to carry narcotics in their pockets and inject patients without proper oversight.

The report comes a year after investigators from the Centers for Medicare and Medicaid Services documented repeated examples of poor oversight at the hospital and threatened to cut Medicare funding.

In July, Medicare officials issued a finding of immediate jeopardy after investigators discovered that five UCI patients had received overdoses because nurses using pain medication pumps were not properly trained. UCI officials immediately began training nurses to use the pumps, the finding was lifted within 24 hours and the hospital submitted a plan of correction.

However, the 2010 continuation of the sad tale of UCI adds an interesting contrast.

UCI nurses said Thursday that many of the latest problems stem from understaffing and other cost-cutting, even as the facility turned a $54.2-million profit last year and the chief executive earned an $83,250 bonus.

'This is a problem of money. To provide extra training, extra staffing, is money,' said Beth Kean, California Nursing Assn. director for UC nurses, including 1,000 at UCI.

Terry A. Belmont, who took over as the hospital's chief executive last year, disputed that the facility was understaffed.

The new wrinkle in the UCI saga seems to be that now the leadership of UCI has been raking in bonuses while the mismanagement of the organization apparently continues.

Indeed, also last week several California newspapers reported on a series of bonuses granted to the top executives of the University of California system.  For example, per the Los Angeles Times,

The University of California regents Thursday approved the controversial payment of $3.1 million in performance bonuses to 38 senior executives at UC's five medical centers.

The regents emphasized that the payments were linked to improved patient health and stronger hospital finances and said they were important tools to attract and retain talent. They said the bonuses were part of a 16-year-old plan funded by hospital revenue, not state funds or student fees. An additional $33.7 million is distributed among 22,000 lower-ranking medical employees.

However, union activists denounced the executive bonuses as unconscionable as other parts of the university were coping with pay cuts and layoffs.

'This is appalling to do this when they are telling the lowest-paid workers to stay in poverty,' said Lakesha Harrison, president of the American Federation of State, County and Municipal Employees Local 3299, which represents about 20,000 UC workers, including hospital technicians and campus custodians.

Some of the union's members get bonuses of about $300 a year, Harrison said. In contrast, the payments to the 38 senior managers range from about $30,100 to nearly $219,000.

The incentives were awarded after the UC medical center system met such targets as reducing catheter-related infections and saving money through group purchases of supplies, officials said.

Among the payments approved Thursday by the regents in San Francisco were $218,728 to UCLA Medical Center Chief Executive David Feinberg, on top of his $739,695 base salary; $181,227 to UC San Francisco medical center Chief Executive Mark Laret, on top of $739,700 in pay; and $87,000, in addition to his $580,000 salary, for John Stobo, the UC system's senior vice president for health sciences.

Corroborating the assertion that the bonus plan is not new is a document that lists executive compensation at the University of California in 2008. (2009 data does not yet seem to be available on the web.) This document noted the following bonuses paid to University of California - Irvine medical leaders in 2008:
- Susan J Rayburn, Executive Director of Clinical Enterprise - Base Salary= $212,700, Bonus=$28,401
- Lisa M Reiser, Chief Patient Care Services Officer - $243,000, $26,507
- Eugene Spiritus, Chief Medical Officer - $310,000, $38,373
- Patricia D Thatcher, Executive Director - HR and Customer Service, Medical Center - $197,547, $17,542
- Cynthia A Winner, Chief Ambulatory Care Officer - $238,200, $24,371
- Maureen L Zehntner, Associate Vice Chancellor/ Chief Executive Officer, Medical Center - $555,000, $74,432

Note that Dr Spiritus, the Chief Medical Officer, did not mention that he was a 2008 bonus recipient when he defended bonuses given to UCI leaders in the LA Times article,

'Everybody's fallible. We just have to make sure we have the right processes in place' to catch errors, said Dr. Eugene Spiritus, UCI Medical Center's chief medical officer.

Spiritus also defended the compensation for hospital managers, saying they need to stay competitive in order to attract and keep talented managers, especially given the cost of living in California.

F Scott Fitzgerald wrote, "the very rich are different from you and me."  These days, it is executives and managers who are very different from you and me. 

Physicians are beginning to dread the notion of "pay for performance," which may mean tiny increases in fees paid to physicians who uncritically follow wooden-headed guidelines based on over-simplified notions of disease, poor measurement schemes, and manipulated and suppressed clinical data. 

However, for health care organization executives, "pay for performance" seems to mean lavish bonuses only tenuously related to any rational notion of performance.  In the example above, it seems that multiple UCI executives earned bonuses for their management of clinical affairs at the medical center in 2008, and at least the medical center CEO earned a bonus in 2009 for "improved patient health" while outside review of the medical center's performance in 2009 revealed "scores of problems" sufficient to threaten withdrawal of Medicare funding.  One wonders about the basis for all the millions in bonuses that have been paid to University of California executives over the years?

In fact, the executive "pay for performance" programs that started in the for-profit corporate world, and now are prevalent in not-for-profit health care organizations, seem to reflect the culture of executive entitlement now so prevalent in the US (and maybe most developed countries.)  First, executives claim credit for any improvements in their organizations, while the workers in the trenches who actually accomplished the improvements get chump change.  Second, when things go wrong, the workers face salary cuts and lay-offs, while the executives' total compensation never seems to go down. 

As we mentioned before, 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.

UCI Medical Center Fails Inspection, UCI Executives Get Bonuses

Back in the early days of Health Care Renewal, we had many occasions to write about problems with the leadership of the University of California - Irvine (UCI) medical school.  Starting in late 2005, we posted  about various management problems at the institution, involving its liver transplant service, cardiology division, and bone marrow transplant service, (see posts here and here) which lead the new chancellor of the campus to "acknowledge a failure of leadership and accountability" (see post here.) Slightly more recently, we noted the almost 20 year history of questionable financial relationships that involved one of UCI's "biggest stars" in clinical researach and several pharmaceutical companies (see post here).  Then, in 2007, we wrote about some strange contracting practices involving UCI and a local orthopedic practice (see post here).

So it was deja vu all over again when last week the Los Angeles Times reported about the latest batch of problems at UC Irvine Medical Center:

Federal investigators found scores of problems at UC Irvine Medical Center during a fall inspection that again put the troubled hospital's Medicare funding at risk, according to report released Thursday.

In an 85-page report on their surprise October inspection, regulators said they observed poor oversight and mistakes by UCI doctors, nurses and pharmacists, leading to inadequate care that in some cases harmed patients.

Among the findings:

* An 82-year-old man was mistakenly given a narcotic patch by a medical resident, without approval of doctors or pharmacists. The patch led to an overdose that required emergency intervention and may have contributed to his death a week later.

* A patient in the neuropsychiatric unit fell twice in three days and despite yelling 'Help me, doctor, help me,' suffered a head injury and had to be taken to intensive care.

* An on-call resident did not respond to repeated emergency pages from nurses in the neurological intensive care unit, where a patient with an irregular heartbeat languished for more than an hour.

* Pharmacists failed to monitor and store drugs correctly, allowing nurses to carry narcotics in their pockets and inject patients without proper oversight.

The report comes a year after investigators from the Centers for Medicare and Medicaid Services documented repeated examples of poor oversight at the hospital and threatened to cut Medicare funding.

In July, Medicare officials issued a finding of immediate jeopardy after investigators discovered that five UCI patients had received overdoses because nurses using pain medication pumps were not properly trained. UCI officials immediately began training nurses to use the pumps, the finding was lifted within 24 hours and the hospital submitted a plan of correction.

However, the 2010 continuation of the sad tale of UCI adds an interesting contrast.

UCI nurses said Thursday that many of the latest problems stem from understaffing and other cost-cutting, even as the facility turned a $54.2-million profit last year and the chief executive earned an $83,250 bonus.

'This is a problem of money. To provide extra training, extra staffing, is money,' said Beth Kean, California Nursing Assn. director for UC nurses, including 1,000 at UCI.

Terry A. Belmont, who took over as the hospital's chief executive last year, disputed that the facility was understaffed.

The new wrinkle in the UCI saga seems to be that now the leadership of UCI has been raking in bonuses while the mismanagement of the organization apparently continues.

Indeed, also last week several California newspapers reported on a series of bonuses granted to the top executives of the University of California system.  For example, per the Los Angeles Times,

The University of California regents Thursday approved the controversial payment of $3.1 million in performance bonuses to 38 senior executives at UC's five medical centers.

The regents emphasized that the payments were linked to improved patient health and stronger hospital finances and said they were important tools to attract and retain talent. They said the bonuses were part of a 16-year-old plan funded by hospital revenue, not state funds or student fees. An additional $33.7 million is distributed among 22,000 lower-ranking medical employees.

However, union activists denounced the executive bonuses as unconscionable as other parts of the university were coping with pay cuts and layoffs.

'This is appalling to do this when they are telling the lowest-paid workers to stay in poverty,' said Lakesha Harrison, president of the American Federation of State, County and Municipal Employees Local 3299, which represents about 20,000 UC workers, including hospital technicians and campus custodians.

Some of the union's members get bonuses of about $300 a year, Harrison said. In contrast, the payments to the 38 senior managers range from about $30,100 to nearly $219,000.

The incentives were awarded after the UC medical center system met such targets as reducing catheter-related infections and saving money through group purchases of supplies, officials said.

Among the payments approved Thursday by the regents in San Francisco were $218,728 to UCLA Medical Center Chief Executive David Feinberg, on top of his $739,695 base salary; $181,227 to UC San Francisco medical center Chief Executive Mark Laret, on top of $739,700 in pay; and $87,000, in addition to his $580,000 salary, for John Stobo, the UC system's senior vice president for health sciences.

Corroborating the assertion that the bonus plan is not new is a document that lists executive compensation at the University of California in 2008. (2009 data does not yet seem to be available on the web.) This document noted the following bonuses paid to University of California - Irvine medical leaders in 2008:
- Susan J Rayburn, Executive Director of Clinical Enterprise - Base Salary= $212,700, Bonus=$28,401
- Lisa M Reiser, Chief Patient Care Services Officer - $243,000, $26,507
- Eugene Spiritus, Chief Medical Officer - $310,000, $38,373
- Patricia D Thatcher, Executive Director - HR and Customer Service, Medical Center - $197,547, $17,542
- Cynthia A Winner, Chief Ambulatory Care Officer - $238,200, $24,371
- Maureen L Zehntner, Associate Vice Chancellor/ Chief Executive Officer, Medical Center - $555,000, $74,432

Note that Dr Spiritus, the Chief Medical Officer, did not mention that he was a 2008 bonus recipient when he defended bonuses given to UCI leaders in the LA Times article,

'Everybody's fallible. We just have to make sure we have the right processes in place' to catch errors, said Dr. Eugene Spiritus, UCI Medical Center's chief medical officer.

Spiritus also defended the compensation for hospital managers, saying they need to stay competitive in order to attract and keep talented managers, especially given the cost of living in California.

F Scott Fitzgerald wrote, "the very rich are different from you and me."  These days, it is executives and managers who are very different from you and me. 

Physicians are beginning to dread the notion of "pay for performance," which may mean tiny increases in fees paid to physicians who uncritically follow wooden-headed guidelines based on over-simplified notions of disease, poor measurement schemes, and manipulated and suppressed clinical data. 

However, for health care organization executives, "pay for performance" seems to mean lavish bonuses only tenuously related to any rational notion of performance.  In the example above, it seems that multiple UCI executives earned bonuses for their management of clinical affairs at the medical center in 2008, and at least the medical center CEO earned a bonus in 2009 for "improved patient health" while outside review of the medical center's performance in 2009 revealed "scores of problems" sufficient to threaten withdrawal of Medicare funding.  One wonders about the basis for all the millions in bonuses that have been paid to University of California executives over the years?

In fact, the executive "pay for performance" programs that started in the for-profit corporate world, and now are prevalent in not-for-profit health care organizations, seem to reflect the culture of executive entitlement now so prevalent in the US (and maybe most developed countries.)  First, executives claim credit for any improvements in their organizations, while the workers in the trenches who actually accomplished the improvements get chump change.  Second, when things go wrong, the workers face salary cuts and lay-offs, while the executives' total compensation never seems to go down. 

As we mentioned before, 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.