Skip to Navigation
University of Pittsburgh
Print This Page Print this pages

March 5, 1998

Administrators discuss unified practice plan

Before an attentive, close-packed — and audibly skeptical — audience of some 500 medical faculty members Feb. 19, officials from Pitt and the proposed University of Pittsburgh Physicians (UPP) centralized practice plan said academic values will be among their top priorities in negotiating a new financial relationship between the University, UPP and the UPMC Health System.

To the beeping and ringing accompaniment of audience members' pagers and cell-phones, leadoff speaker Chancellor Mark Nordenberg said he and other Pitt administrators are committed to creating "the kind of arrangement that will best suit the needs of academic medicine here at the University of Pittsburgh." That arrangement, Norden-berg said, will guarantee that faculty members of all ranks will have a voice in managing UPP.

Paraphrasing a draft document defining the new UPP-Pitt-UPMC relationship, the chancellor said: "[UPP] compensation policies will be structured in a way that preserves the traditional allocation of time to academic missions like teaching and research." It's been eight months since Nordenberg announced plans to form UPP and restructure the University's dealings with UPMC.

"I don't apologize for taking time" in working out details of the new arrangements, Nor-denberg told medical faculty. "I think this is a very complicated matter." Radiology chairperson Richard Baron, who is president of UPP, said he and the chairs of Pitt's 17 other clinical practice plans agreed the plans must merge to improve efficiency and ensure their survival.

"I don't think you can find a large, major, successful academic medical center that doesn't have a centralized practice plan," Baron added.

Contrary to what some people believe, each of the current practice plans is an independent corporation with its own board of directors, Baron said. Some of the 18 plans are for-profit organizations; others are non-profit groups, he noted.

The practice plans always have been independent of the University, so it's incorrect to say anyone is planning to transfer UPP from the medical school to UPMC Health System, Baron said.

Baron and Thomas Detre, Pitt senior vice chancellor for Health Sciences, argued that UPMC Health System is the only feasible home for UPP — partly because of the already close ties between the medical school and UPMC, and partly because UPMC is the only likely source for the estimated $75 million or more in start-up capital that UPP will require, in addition to other needed funding.

Currently, UPMC provides $50 million annually to the plans and subsidizes as much as 40 percent of the budgets of some medical school departments, Baron noted.

"I can't speak for the University," Baron continued, "but I don't think the University will have the resources to capitalize an 1,100-physician group, and to take financial responsibility for it in the future. We have to look at the reality of who's going to help us overcome those [fiscal] problems." Some faculty members have suggested that UPP declare its independence from both Pitt and UPMC Health System, and capitalize itself through a bond issue. "That could provide a sense of greater freedom," Detre said, "but it also would entail phenomenally greater risk" for UPP member physicians, who would be totally liable for practice plan losses.

Baron added: "In an era when third-party payments are going down, that option [going independent] could put the academic mission at greater risk." But despite UPMC's financial support, some medical professors question the motives of the system, which is a separate corporate entity from Pitt.

Ophthalmology professor Michael Gorin pointed out that teaching and doing academic research will require faculty to take time away from their clinical practices — thus, presumably, increasing costs to UPP and its parent corporation, UPMC.

"In a university like Pitt, the academic mission defines the success of the institution," Gorin said. "But under the fiduciary structure of a corporation like UPMC, the bottom line comes down to money. That's not necessarily a bad thing, but faculty will need additional protections" under UPMC.

"I couldn't agree more," replied Baron, adding: "The [health system] hospitals benefit greatly from our practice. It's my job to remind them [UPMC officials] of that constantly. Our success is necessary for them, just as their success will help us." Baron reported that, under a plan proposed by Pitt practice plan chairpersons, UPP would be run by a 32-member board of directors that would include himself, as UPP president, along with: the 18 chairpersons of the medical school's clinical departments; four other "clinically active" Pitt physicians; the University chancellor, senior vice chancellor for Health Sciences, and associate vice chancellor for education in the Health Sciences; the UPMC Health System's president and executive vice president; the presidents of Children's and Magee Womens Hospitals; and two non-physician representatives of the local community.

"That makes for 25 physicians out of 32 board members," Baron said. "The chairs felt that UPP had to be a physician-run organization, functioning with structural 'firewalls' as well as an explicit commitment that no funds would be diverted from UPP to any other part of the UPMC Health System." Also during the Feb. 19 meeting, several faculty members complained of a decline in shared governance and what one professor called "an atmosphere of intimidation" within the medical school.

They said professors weren't adequately consulted about a new plan to cut the salaries of nearly 1,000 non-tenure stream medical faculty by 10 percent over each of the next three years. Faculty were told they could make up the reductions, and earn additional income, by seeing more patients at practice plan clinics.

Another sore point was interim Dean George Micha-lopoulos's recent dismissal of Sheldon Adler as senior associate dean, following a dispute over a letter from five professors requesting the Feb. 19 meeting. See stories in the Feb. 5 and 19 University Times.

Michalopoulos would not discuss Adler's firing during the meeting, saying it was an inappropriate forum for such a discussion.

— Bruce Steele n They also say professors were not adequately consulted about a new plan to cut the salaries of nearly 1,000 non-tenure stream medical faculty by 10 percent over the next three years. Faculty were told they could make up the reductions, and earn additional income, by seeing more patients at practice plan clinics.

Another sore point, among some medical faculty, was the recent firing of Sheldon Adler as senior associate dean. The school's dean, George Michalopoulos, Another sore point was firing of adler, popular guy example of decline in shared governance

— Bruce Steele

Leave a Reply