Note: this article was published on the web site of Modern Healthcare
Ohio policymakers continue to scrutinize an academic affiliation between University of Toledo Medical Center and ProMedica, claiming that ProMedica has ulterior motives that will decimate the academic medical center.
ProMedica and the University of Toledo College of Medicine and Life Sciences signed a 50-year academic affiliation agreement in 2015, which allowed UT students and residents to train at ProMedica as well as provide financial support to “ensure the long-term strength and expansion of educational and financial opportunities for the University’s College of Medicine and Life Sciences,” the university wrote in its 2019 earnings report. Critics of the deal have countered that the affiliation will gut the medical center as ProMedica siphons off its physicians and the most profitable services.
“What is becoming clear is this deal stinks,” Ohio Sen. Teresa Fedor (D-Toledo) said during a press conference Wednesday. “It favors ProMedica over UTMC. It has systematically taken assets and profits from UTMC—a public teaching and research hospital—and transferred them to ProMedica, a private hospital.”
Lawmakers called the press conference to urge the state auditor to conduct a deeper audit of how the University of Toledo Medical Center’s finances have been affected by its academic affiliation with ProMedica, claiming the agreement may be hurting the facility.
Former Toledo Mayor Carty Finkbeiner said he supports a forensic audit of UTMC’s finances and the affiliation agreement.
“It’s important to get a very thorough review of the fiscal relationship between the University of Toledo, its medical college and ProMedica,” he told Modern Healthcare. “I am not sure that the community at large has a clear picture of that fiscal partnership.”
ProMedica said in a statement that the academic affiliation was thoroughly vetted by both parties and reviewed by the state attorney general’s antitrust division in 2015.
“The terms of the academic affiliation have been available to the public online since its inception,” the Toledo, Ohio-based not-for-profit health system said. “Both parties continue to adhere to the terms as outlined to enrich the quality of medical education and expand clinical training capacity in Toledo.”
The affiliation agreement required all but orthopedics, family medicine and psychiatry faculty and residents to move their practices to ProMedica’s flagship hospital, UTMC psychiatry professor Dr. Daniel Rapport said in a recent complaint with the Federal Trade Commission.
That was set to change on July 1, when UTMC was planning to transfer its orthopedic services to ProMedica. But Ohio Attorney General David Yost halted the transfer for 90 days.
The University of Toledo Medical Center reported a $8.3 million operating loss on operating revenue of $295.5 million in 2019, down from a $685,000 operating profit on operating revenue of $304 million in 2018, according to HMP Metrics.
“Essentially, after robbing UTMC of its doctors, residents and patients, and driving it to insolvency, it (ProMedica) has now swept in to offer to manage the hospital it has decimated financially,” the complaint reads. “This is anti-competitive. It would place them in charge of the University Hospital to manage however they see fit.”
Fedor and her congressional peers also accused Faber of being too quick to dismiss a whistleblower’s complaint that alleged two UT Board of Trustees intentionally harmed the public hospital and helped ProMedica. The complaint alleges possible felonies, conflicts of interest and breaches of fiduciary duty involving former UT Trustee Steve Cavanaugh and current UT Trustee Mary Ellen Pisanelli, who championed the agreement.
Cavanaugh is now the chief financial officer of ProMedica, which acquired HCR ManorCare in 2018. He was an executive with HCR ManorCare in 2013 when HCR ManorCare began its business association with ProMedica, which entered into public contract negotiations with the University of Toledo in 2014. He did not list any conflicts of interest when he applied for a seat on the University of Toledo Board of Trustees, public records show.
Cavanaugh said there was no reason to recuse himself from the 2015 vote on the academic affiliation agreement, which was part of a public competitive bidding process run by an outside consultant. Even if he had recused himself, the outcome would have been unchanged, he said, noting that the affiliation was reviewed by the attorney general and were made public.
“The ProMedica acquisition of HCR ManorCare happened in 2018 and had no relation to the academic affiliation agreement,” Cavanaugh said in a statement. “Before the acquisition closing, I sought guidance from the Ohio Ethics Commission regarding my ongoing involvement on the UToledo Board that included a detailed review of the acquisition and my role with ProMedica. I followed the guidance The Ohio Ethics Commission provided.”
Ohio Auditor Keith Faber didn’t complete a full performance audit of the UTMC-ProMedica affiliation agreement after the university declined the request, but several lawmakers said in a letter Tuesday that was not good practice. A comprehensive financial review may have helped explain “why the agreement, marketed as a means of improving the finances at the University of Toledo College of Medicine, is having the opposite effect,” Fedor and state Reps. Paula Hicks-Hudson (D-Toledo), Lisa Sobecki (D-Toledo) and Mike Sheehy (D-Oregon) wrote in a letter to Faber Tuesday.
While Faber said in the June 22 review that he couldn’t make meaningful recommendations in that initial, cursory audit, the lawmakers criticized Faber for essentially asking UTMC for permission to do a thorough review, claiming that is not necessary.
The Ohio State Auditor’s office said it had not received the policymakers’ letter.
“We can recall no legitimate instance in which a law enforcement agency such as yours allowed an entity under review to set the parameters of that review,” the letter reads. “That arrangement, however, appears to be how your office repeatedly handled allegations of felonies, financial irregularities and conflicts of interest involving the academic affiliation agreement between ProMedica and the University of Toledo for the UT College of Medicine and Life Sciences.”
Also at the news conference, lawmakers unveiled a recent letter to the UT Dean of the College of Medicine from UTMC Professor Dr. James Willey. Willey cited Faber’s audit findings that suggest UTMC made a profit from 2016 to 2018 but interdepartmental transfers caused the medical college to operate in the red.
Willey focused on the estimated $30 million that Medicare paid annually to help fund graduate medical education, asking if the payments were “used by UToledo to support resident training or were they used for some other purpose?”
If used for another purpose, it would undermine the medical school’s ability “to meet their educational obligations to resident training,” he wrote.
Bob Baxter, the president of Toledo-based Mercy Health North, wrote to the Ohio Department of Higher Education that the UTMC-ProMedica affiliation is jeopardizing UTMC.
“Mercy Health has witnessed, through the veil of medical education, the systematic relocation of UTMC’s residents—and the faculty charged with training such residents—away from UTMC and on to the campus of a market competitor,” he wrote. “From our perspective, such relocation has taken UTMC from a vibrant and thriving academic medical institution training hundreds of residents a year to a failing hospital in just over five years.”
Mercy Health said it explored responding to the university’s request for proposal, but it didn’t see how Mercy could help stabilize UTMC. Even if it did reply to the RFP, the affiliation agreement “grants ProMedica broad rights that effectively undercut any offer submitted to the University of Toledo for UTMC.”