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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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