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DMC CEO Sounds Off On WSU Relationship
Editor’s note:
The following is the text of an e-mail sent to Detroit Medical
Center employees October 9; it was obtained by DMN on that date. The
DMC was contacted, informed that the e-mail would be published in an
e-edition October 11 and asked for further comment. DMC CEO Mike
Duggan declined further comment.
Dear DMC
Employees
With the recent
newspaper articles, I'm getting questions daily from DMC employees
about the Wayne State contract. Let me try to tell you directly
what's going on and what's at stake.
The financial
situation at the DMC has stabilized. 2006 will be the third straight
year in the black, something DMC hasn't accomplished since the
1980s. Things are going to be tight for us until the Michigan
economy improves, but we've come a long way in a short period of
time.
The DMC Board
leadership and I have tried hard with three different Deans in the
last two years to get an agreement with WSU. WSU tries to cover with
innocent sounding terms like "diversifying" and "suburban strategy,"
but the cold truth is WSU has already abandoned its historic DMC
partnership. WSU is aggressively building a fleet of lifeboats,
establishing numerous suburban hospital contracts so their doctors
can one day jump ship and float off into a sea of better payer mix,
taking their insured patients with them. Most WSU doctors seem to
find this plan distasteful, but it is being pushed with full force
by the WSU administration.
At the end of the
day, DMC's decision comes down to this choice:
Do we side with
the WSU administration demanding huge payments from DMC while they
build new programs at other hospitals who want to take our patients?
Or, do we side
with all those doctors, nurses, aides, techs, transport workers,
administrators, and other staff who are 100 percent loyal to the DMC
and whose jobs could be lost if the WSU doctors took DMC market
share away to their new partners at Oakwood and Providence?
To me, it's not a
difficult choice. I have never in my life been treated with the
warmth and kindness that I have received from DMC employees the last
few years. I couldn't be more pleased that the DMC Board just
extended my contract three more years through 2009, because the work
here is far from done. My proudest accomplishment is the fact DMC
stopped the annual cycle of layoffs and instead has actually hired
3,000 new employees in the last three years. We can't afford a WSU
contract that jeopardizes those jobs.
When I came to
the DMC, I didn't come as an experienced hospital administrator, but
as a lifelong Detroiter who understood two principles about our
region that would determine whether DMC would survive:
1) If people
have a choice between the same service either downtown or near their
home, they will choose to stay near home; and
2) If the
service provided downtown is truly unique, people will pour in by
the thousands from 50 miles or more.
My first e-mail
to employees in 2004 shocked some when I told you I wanted to scrap
my predecessor's plan to close Detroit hospitals. I wrote of the
great success of the Fox Theatre, UD High School, the casinos, Joe
Louis Arena, and Greektown. I truly believed we could save our own
great institutions by building unique programs to bring patients
back to Detroit. The DMC employees supported this vision with
tremendous energy as we cleaned up the appearance of our campus,
improved hospital services, and recruited key doctors.
Those who were
here in late 2004 will remember how patients responded, pouring back
onto our central campus in such numbers that our parking structures
were overwhelmed and we had cars backed up into the streets and
parked on sidewalks. It was a remarkable turnaround and showed that
you don't need to build new hospitals in Novi to attract patients.
But you do have to offer a level of care patients can't get in Novi.
Many employees
don't understand the DMC/WSU contractual relationship, but in
principle, it's pretty simple. The original partnership between DMC
and WSU was formed in 1980 by visionaries who truly understood how
to get patients to come Downtown.
The partnership
involved four major commitments DMC made to WSU doctors:
1) WSU received
one of the largest financial payments of any medical school in
America
2) Exclusive
right to positions of medical leadership in all downtown hospitals
3) Exclusive
right to provide many hospital services at all DMC hospitals (ER,
Radiology, Anesthesiology, etc.)
4) A partnership
that allowed WSU to run 69 residency training programs at DMC.
It was a lot to
give up, but what DMC got in exchange was a commitment of loyalty
that WSU would build a great and unique academic medical center at
DMC. While the relationship had many contentious issues, those
fundamental principles survived essentially intact for 25 years,
until WSU embarked on its recent suburban strategy.
What does that
contract mean to WSU today? The 700 WSU physicians and their
practice groups and employees now earn in excess of $200 million a
year from DMC: $80 million paid directly by DMC and another $120
million in physician fees earned at DMC hospitals. It remains one
of the largest, if not the largest, financial packages received by
any medical school practice group from any hospital system in
America. And DMC has offered to increase that amount in each of the
next three years.
WSU keeps
claiming DMC is exaggerating the risk from WSU's competing programs,
so judge for yourself. WSU's suburban strategy is only in its
infancy, yet here are proposals WSU either already has proposed or
actually concluded:
1) A joint
surgery center with Oakwood just three miles from DMC's MIOSH
hospital; 2) New teaching and clinical partnerships with Crittenton
and Providence
3) The purchase
of a massive office building in Troy-the former Saturn
World
Headquarters-to be the center of the WSU Medical practice. The
Saturn Building is larger than all the space occupied by WSU doctors
at DMC today.
4) A
comprehensive affiliation with Oakwood to provide a range of
specialty services. Oakwood is already promoting itself in the
suburbs as the place to get Wayne State specialty services without
having to go downtown.
5) The Dean's
office promised Oakwood that pediatricians from Children's would run
Oakwood's pediatrics unit. Children's today is the dominant hospital
in the Dearborn market, getting more than 50 percent of the
pediatric hospital admissions. Children's would stand to lose
significant patient volume if Oakwood is able to tell Dearborn
parents they have the same doctors as Children's.
Are we
exaggerating in being concerned? Could DMC jobs or hospitals be at
risk if WSU kept making these kinds of deals with our competitors
for the next three years?
Now, here's the
really astonishing part. In its last written proposal two weeks ago,
WSU demanded a new three-year contract with all the same services
and preferential contracts at DMC hospitals they have today. Then,
WSU wanted an $8 million annual increase in contract payments from
DMC. And then WSU demanded the total freedom to keep making all
these partnerships with the other hospitals. They are demanding
that DMC finance its own demise and they pretend to the rest of the
world like they can't understand why the DMC Board and I won't just
sign it. Here's the good news: the DMC management team is about the
most talented group of people I've ever been around. They're working
18- hour days developing contingency plans and we're gaining
confidence that DMC is going to come out of this stronger than we
are today. We know this isn't nearly as difficult a crisis as we
faced in 2004.
Our plans are
being developed based on the same principles that got us out of
bankruptcy in 2004. If a group's proposal builds a unique medical
program at DMC, we will strongly back it. If a group's proposal is
designed to take DMC's money while they build programs at our
competitors, we will reject it and we'll work to replace them with a
group that will build uniquely at DMC.
Interestingly,
the process is having the unexpected benefit of naturally sorting
out the gripers and malcontents who are choosing to leave on their
own. There will be a lot of pain and anxiety during the transition
and DMC will probably look quite a bit different than it does today.
At the end of the day, I really believe we will be stronger because
we're going to have a medical staff that truly wants to be here. And
that really would be priceless.
It's 1 a.m.
Monday and this is probably too long already. I'll do a separate
piece on the residency issues shortly.
Mike
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Dean Mentzer Announces Oct. 17 Forum on DMC/WSU Issues
WSU/DMC Negotiations: Update Forum on Tues., Oct. 17 @ 5:00 p.m.
Dear Colleagues:
Since the first of this month, I have received many questions about
the status of the School of Medicine's negotiations with the Detroit
Medical Center. I am writing to provide you with a brief update on
our continued talks, and to invite you to join me for a session on
Tues., Oct. 17 at 5 p.m. in Scott Hall's Blue Auditorium to answer
your questions, face to face.
As you are aware, the Accreditation Council on Graduate Medical
Education (ACGME) will be conducting an on-site institutional review
of our GME programs on Nov. 14. The ACGME knows that the contract
supporting the joint graduate medical education programs expires on
Dec. 31, 2006, and has not yet been renewed. The immediate and
rightful concerns of the ACGME are the stability of our training
programs and the well being of the residents and fellows for whom we
share responsibility.
On Oct. 1, the School of Medicine and the DMC notified the ACGME
that good faith negotiations were underway and would continue until
an agreement was reached. Wayne State University and the School of
Medicine remain committed to continuing good faith negotiations to
ensure the continuity of programs sited at our downtown home, and
within the scope of our longstanding affiliation with the DMC.
As I have affirmed on many occasions, the School's commitment to the
city of Detroit and its partnership with the DMC are central to our
mission, and will remain so. Although the School of Medicine relies
upon longstanding and essential partnerships with numerous health
care institutions to train one of the nation's largest medical
school classes, our education, research, and clinical care programs
are inextricably linked to the city of Detroit and its unique
demographics.
WSU's more than 700 faculty physicians are responsible for
approximately 65 percent of DMC's revenues, and deliver about 80
percent of all care delivered to the DMC's uninsured and
underinsured patients. About 30 percent of all practicing physicians
in Michigan received all or part of their medical training at WSU/DMC.
Of the city of Detroit's 690 primary care physicians, 350, or 40
percent, are WSU/DMC resident physicians-in-training.
Detroit is the School of Medicine's home: WSU has committed to
capital investment of $200 million over the next five years in two
new facilities on its downtown campus - the Richard J. Mazurek, MD,
Medical Education Commons and a new state-of-the-science
multidisciplinary research building that will house the University's
evolving Center for Clinical and Translational Science. In fact,
these facilities will be catalysts for centering regional education;
and clinical translational research activities at our downtown site.
As you may know, the School's student body is the most diverse in
the nation; we graduate more African-American and Arab-American
physicians than any of our 125 peer United States medical schools,
and rank among the top five for training African-American physicians
who go on to become university faculty. Our interdisciplinary
research programs are targeted to the diverse metropolitan
population that we serve and are recognized as national models of
excellence. These programs include cancer, maternal and child
health, and health care disparities, and are the foundation of the
Barbara Ann Karmanos Cancer Institute and the WSU Center for
African-American Urban Health. The School and the DMC collaborate on
these and many other programs.
In summary, I assure you that Wayne State University and its School
of Medicine are steadfastly committed to each of the following:
* Continuing our valued relationship with the DMC;
* Expanding our presence in the city of Detroit;
* Upholding our mission of delivering the highest quality patient
care supported by education and research;
* Educating our students and training our residents and fellows
in the best possible teaching environments;
* Recruiting and retaining leading physicians to teach our
students and serve our community;
* Providing care to the region's uninsured and underinsured
As talks with the DMC continue to evolve, it is important that you
are updated with accurate information. To that end, I will be
hosting a forum on Tues., Oct. 17 at 5 p.m. in Scott Hall's Blue
Auditorium. Please join me then for a briefing, followed by a
question and answer session.
I look forward to seeing you on Oct. 17.
Sincerely,
Robert M. Mentzer, Jr., MD
Dean, School of Medicine
Senior Advisor to the President for Medical Affairs
Wayne State University
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