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A senior professor at the School of Medicine responds skeptically to Johnson's position. "The proof of the pudding is in the eating. What has happened to Tenet? Have they lost money? They took over the hospital. Correct? They have not lost money yet. They've made nothing but profits. What was wrong before? If [SLU administration] thought they were going to lose money, they probably had bad business practices they needed to work on, rather than sell the hospital. Here somebody else has come in, taken over and made a profit of it.
"As far as I know, the hospital up to [the point of its sale] had never lost money. It had always had a profit before the sale to Tenet. What has now happened is that profit -- which is to help the university and the medical school -- has gone over to Tenet. Both the university and the medical school are hurting as a result of that. That's a very bad decision."
Johnson argues that such comparisons are apples and oranges: "Is Tenet able to show a margin in that hospital because it is a national system that gets a lot of savings off of bulk purchasing of everything from professional services to toilet paper? Is it making money because it has a four- or five-hospital system in St. Louis? Is it making money because it runs it differently than an academic practice would? I don't think it's at all fair to say it would have been profitable or produced a margin if we had continued to run it."
The wisdom of the sale of the hospital is open to debate.
Yet four years after that sale, even SLU's own self-study -- prepared for the recent visit of a national accreditation committee -- acknowledges that times are tough, even though the sale of the hospital was to secure the quality of the health-sciences program.
Under the heading "Challenges," the self-study reads, "Faculty physicians find that they must increase their clinical practice to maintain their previous level of compensation, at the expense of time otherwise devoted to teaching."
"Biondi cut deals with Tenet, selling UMG services well below market rate," says another professor who has observed Biondi's business deals over the years. "They're performing various physician services for the hospital, but they're getting reimbursed well below what market should be. As a consequence, they're having financial problems with the UMG."
SLU media relations, by e-mail, replies: "The hospital contracts with the university only for physician services that the hospital requests and needs. Those contracts are developed through arm's-length negotiations between the parties. The chair of each department is informed of annual payments by the hospital for those services in their departments and is responsible for the distribution of these resources."
Physicians have not been given access to those contracts and consequently have no real knowledge of how they're being served by those "arms-length negotiations." If they want a pay increase, they'll just have to work harder. The UMG doctors took a 5 percent pay cut six years ago and have not received an increase in their base salaries since. An e-mail from the media arm of the university says, "We actively encourage faculty to apply for more grants and contracts to help offset salary and unfunded research costs."
Meanwhile, students are failing.
"Last year, for the first time in the history of the school -- we never had trouble with board examinations; we had maybe one or two flunk a year -- last year we had 20 percent of the class fail," says one senior faculty member. "I'm holding my breath to find out what happens this year. They're taking [boards] now."
On top of the other changes that have taken place with the sale of the hospital, the School of Medicine has revised both its curriculum and its admissions policy. For the sake of diversity, the school has admitted students with lower entrance-exam scores than previously had been accepted. The new curriculum has not worked well for the new students, say several senior faculty members.
"Everybody's finger-pointing," says one professor. "I attribute it to the new curriculum. One of the problems was, almost no one fails anymore. No one fails our examinations or our courses. But when 20 percent flunk the boards, there's obviously something wrong with the curriculum. If 20 percent don't fail our curriculum but 20 percent fail the boards, there's something wrong."
According to SLU's self-study, an accreditation team "examined the data and concluded that the goal of enhancing diversity was lofty enough not to blame the curriculum."
Dan Zabel was executive director of the UMG. He met with physician faculty on a Wednesday evening in May.
The physicians of the UMG have a special role at the med school. The UMG is responsible not only for teaching medicine but for practicing medicine. That practice is expected to make money, money that further compensate the physicians, the departments of the med school and programs university-wide.
Zabel, according to those who met with him that night, believed the UMG was being unfairly burdened in other ways. The UMG was paying high overhead fees to SLU's North Campus for a variety of services. The costs for these services had increased remarkably, says one UMG physician, and yet the UMG did not know how those costs had been calculated.
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