DMC offers WSU partnership extension
Detroit — The Detroit Medical Center has proposed extending its partnership with Wayne State University through Aug. 31.
The DMC has given the university until Monday morning to accept the offer.
In a letter sent Friday by CEO Dr. Tony Tedeschi, the DMC said it isn’t ready to sign a new contract, but the current adult clinical services agreement — set to expire May 15 — could be temporarily extended as they negotiate their differences.
“We believe it is in the best interest of the patients, students, residents and our respective organizations to extend our current agreements through August 31 to allow for further discussion of alternatives for the future together or an orderly transition,” Tedeschi said in the letter to Medical School Dean Dr. Jack Sobel and Charles Shanley, president and CEO of the Wayne State University Physicians Group.
The proposal could end — at least for the present — a breakup that threatens to sever a 100-year partnership between the Wayne State University Medical School and its teaching hospitals.
The offer included several caveats.
■Either party could cancel the agreement on a 14-day notice.
■A joint advisory committee would be formed to discuss their shared future and transition arrangement.
■Non-solicitation provisions that bar talks with other potential partners would be eliminated.
In return, the DMC would guarantee fixed monthly payments equal to the amount physicians are paid under the current agreement.
“Because of the need to secure alternative coverage if we are not able to reach agreement on the extensions, the extension offer is open until 10:00 am EDT on Monday, May 7,” Tedeschi wrote.
“We will be available this weekend to discuss any counter-proposal you might have. If we have not received signed agreements by that time, we will initiate our process of engaging other providers.”
University spokesman Matt Lockwood said Friday: “Our primary concerns are our community, our patients, our students and our physicians. We will do what is necessary to best serve them. Our leadership has not had a chance to review Tenet’s proposal yet, but we will review it and determine if there is a way forward.”
WSU has been involved in partnership discussions with several health systems, including Henry Ford Health System and Beaumont Health, well before its work relationship with the DMC fell apart this week, its university president said Friday.
“Yes, we have been talking to a number of different health systems. Some of them more mature than others,” Wayne State President M. Roy Wilson told The Detroit News. He declined to provide a full list.
“They are all the major health systems you would expect we’ve been having some discussions with. ... They are not new (discussions).”
The break-up announced Wednesday between WSU and the DMC — and its for-profit owner, Tenet Healthcare Corp. — is expected to affect thousands of the hospital’s patients as well as the university’s medical school and hundreds of doctors who work at the DMC’s facilities if it holds.
Beaumont was not able to confirm the talks Friday, and Henry Ford did not return calls.
If there is no agreement or extension, the end of what’s been a contentious relationship could be felt within weeks as the Wayne State University Physicians Group and the DMC agreed this week to allow a contract for adult clinical services to expire on May 15.
Wilson had previously threatened to end that contract then if they couldn’t resolve their differences. The two had agreed to a contract extension six months before.
The physician group has a strong affiliation with the WSU School of Medicine, where many of its doctors teach, and which provides medical, administrative and clinical services in DMC hospitals, which have more than 2,000 licensed beds and 3,000 affiliated physicians.
Wilson made his comments after WSU’s Board of Governors held a regular board meeting Friday afternoon on campus, just two days after Tenet’s move to end negotiations and dissolve its partnership with the university.
Sources within Tenet and the DMC told The News on Thursday there is still a possibility for reconciliation.
“There is still some dialogue (at DMC),” Wilson confirmed Friday. “I don’t know the extent. I haven’t received an update from today.
“... There could be some developments. I would welcome some developments.”
WSU’s president said there is still a need for a transition plan between Tenet and the DMC, but he did not know how active talk would be in the next two weeks.
“I suggested and offered to make a transition plan, create transition teams (with Tenet Vice Chairman Keith) Pitts,” he said. “... That did not resonate with him. He thought we would go our separate ways and not have a planning process. It’s essential.
“My desire is to do something that doesn’t hurt patients and if possible doesn’t hurt each other.”
Mayor Mike Duggan, a former and longtime DMC CEO, was asked Friday for his perspective on what caused the strained relationship over the years between the university and medical center.
Duggan said changes made during his oversight created some discord but saved the DMC from going under.
Detroit’s mayor served as chief executive officer of the DMC during the tumultuous years from 2004 and 2012 when reduced revenue and increased charity, coupled with the loss of tens of millions in federal research funding threatened the standing of both institutions.
Strained relations culminated in this week’s split in the 100-year-old partnership that buttressed one of the nation’s top academic medical centers.
Hundreds of millions in the red, Duggan moved to privatized academic departments and brought in non-university-affiliated physicians. No longer granted exclusivity at the DMC, faculty physicians had to compete with private doctors, Duggan said.
“A number of outstanding Wayne State physician groups thrived and grew under this arrangement,” the mayor said in an email to the News Friday. “Other Wayne State groups were unhappy when their patients left them for other doctors and frequently criticized me for the competition I had injected into the hospital system.”
Duggan negotiated the DMC’s sale to for-profit Vanguard Health Systems in 2011. Dallas-based Tenet Healthcare, another for-profit hospital chain, purchased Vanguard and the DMC in 2013. As part of the deal, Tenet agreed to invest $800 million at DMC hospitals, which have been completed.
“Overall in the nine years I was there, I saw the productivity and performance of the Wayne State physicians improve dramatically,” Duggan added. At the time I left in 2012, WSU Dean Valerie Parisi and I had developed an excellent working relationship. In fact, we signed a new five-year contract between DMC and Wayne State just months prior to my departure.”
Duggan also responded to a document, obtained by The News, from a consultant hired by Wayne State University in 2015 to facilitate partnership discussions between Wayne State University and Henry Ford Health System.
According to the document, tensions between WSU and DMC intensified during Duggan’s tenure as he “became directly involved in privatizing academic departments, and to many, fostered a contentious and highly challenged workplace,” among other issues.
DMC and Tenet officials, who asked not to be named in order talk to frankly about the negotiations, said the university’s search for other academic partners eroded their trust in the medical school.
Wilson on Friday said he refused to cast blame on Duggan for his role.
“What I tell everybody who brings up anything from that era is there are probably issues on both sides,” he said. “I don’t fault anyone. I’m not putting the blame on Mike Duggan. I think some of the issues were us at the time, and I wasn’t here.”
During Friday board meeting, Wilson told the governors and the public gathered that while the university and DMC have “decided to go our separate ways. We are still, however, are working toward some issues, as I understand, and we will see how things shake out in the final analysis.”
“This is not what we want ... but the School of Medicine will have a bright future and will continue to serve our mission extraordinarily well,” Wilson said.
During the board’s Academic Affairs committee, held earlier Friday, the group postponed discussing tuition and fee rates for its School of Medicine’s Medical Doctor Program until later this month.
Governor Diane Dunaskiss said there still is some hope for a resolution over talks with the DMC.
“We are hopeful that we can still come to an agreement,” Dunaskiss said Friday after the board meeting. “Regardless, Wayne will maintain its commitment to this community, the city and the people we serve.”
Staff writer Charles E. Ramirez contributed.