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UNM: One university or two?

Copyright © 2013 Albuquerque Journal

The divide between north of Lomas and south of Lomas has gotten too wide and cumbersome, and has created two separate institutions at the University of New Mexico, several key leaders say.

In particular, the governance structure at UNM’s Health Sciences Center, the university’s $1.5 billion enterprise that includes the hospital, medical school, health clinics and more, is too bureaucratic and inefficient, and “impedes the operation of the university,” UNM President Bob Frank said.

UNM’s overall budget is about $2.5 billion.

It is the HSC board of directors, created after regents unanimously approved a new governance structure in 2010, that is the source of heartburn – not just for Frank but for regents Gene Gallegos and Jamie Koch, as well.

While Gallegos and Koch voted for the change nearly three years ago, they now say regents don’t have enough oversight and lack some decision-making authority.

The HSC board, which meets monthly, is composed of three regents and four members of the business community appointed by the regents’ president. The board votes on major expenditures and changes at HSC.

The structure separates HSC from the main campus and essentially creates two universities, Frank and others say.

“The efficiency of the university is not there. The control of the university by regents is not there. And it’s not there for the president in my day-to-day operation,” said Frank, who became president of UNM a year ago.

“If you were to say, ‘Do the regents and the president have clear accountability and knowledge of all the actions at the university?’ You’d have to say ‘No’ because a lot of things are happening over at the Health Sciences Center that the president and the regents have no knowledge of, and we need to have knowledge.”

HSC Chancellor Paul Roth, who also is dean of the school of medicine, said administrators and regents took months to develop the current structure, which was approved in December 2010.

Roth was acting UNM president at the time while then-president David Schmidly was on medical leave, but both men said recently they worked on the changes for months before regents gave approval.

“We really felt that we needed to make changes. We needed to be more accountable. And that we needed a little more focus and intensive understanding at the governance level of what we do and how we do things,” Roth said.

Roth said a consulting firm found HSC could better tackle the fast-changing health care environment, especially health care reform, by having its own governance structure.

Frank said while HSC administrators keep him informed about daily happenings, he does not feel he has enough authority there. For example, he could recommend someone for the chancellor position were it to come open, but the board would have to approve the hire. The president also evaluates the chancellor, but his evaluation would also have to go before the board.

Frank also gave the example of UNM’s two separate human resources systems. If, for example, Frank wanted to combine the Health Sciences HR with that of the main campus, he would need to go through the board of directors.

“So you get into these crazy tugs of war. And anybody knows that the best way to do it is to consolidate and integrate your organization. And all across the country right now, universities are doing this kind of consolidation and integration under one organized university.”

Possible changes include adding more regents to the HSC board or eliminating it all together, he said.

Frank said he hopes regents tackle the issue soon, although a majority of regents say they are happy with the current set-up.

Little accountability

Health Sciences, under which UNM hospital falls, has been criticized by others outside the university, including some state officials who have questioned the proposed $146 million hospital that is now stalled.

HSC administrators last year were accused of not being transparent and of failing to involve the community when they pushed forward with the 96-bed hospital, which they say will alleviate severe overcrowding and long wait times.

Many criticized the hospital’s large cash reserves, which were to have funded the new hospital. The state Board of Finance declined to vote on the hospital on several occasions, and UNM has since said it will wait to seek approval again.

Health sciences administrators also faced a backlash when they proposed a new drug clinic at Central and San Mateo without seeking public comment first. Area residents angrily demanded HSC change course during a series of public meetings the university planned after announcing the land purchase.

These are the kinds of issues that could be avoided if HSC were more connected to the main campus, some say.

And when HSC announced this year it was laying off 57 medical transcriptionists and outsourcing their jobs to a company in Massachusetts, administrators again came under fire. U.S. Rep. Michelle Lujan Grisham, D-N.M., said in a letter that layoffs were hard to justify when the hospital has such large cash reserves.

“UNM Hospital appears to operate under a different standard than that of the larger university,” she added. “UNM Health Sciences acts as though it is a wholly owned subsidiary of UNM with little accountability to the university and to the public. How many other contracts at UNM Hospital and at the University of New Mexico as a whole have been outsourced in a similar manner?”

Minor kinks

Under the previous system, everything that had to be approved at the regents level went through one or more of the three regents’ subcommittees before reaching the full board. That lengthened the amount of time it took to get pressing matters approved.

Roth said the independent firm that recommended the current structure suggested streamlining “the fragmented nature” of getting items to regents for approval. Creating a board with members who could focus on health care issues and make recommendations to the full board of regents was one way to tackle that, he said.

But whether things have worked out that way depends on whom you ask.

Roth says the new structure has, with the exception of minor kinks, worked well. The board’s in-depth review of major HSC matters has helped streamline at least a portion of its operations, he said.

But he added that some financial decisions still have to go before the regents’ finance committee. That results in some items going before two separate bodies before getting to the regents as a whole.

Lack of oversight

Regents Gallegos and Koch both voted in favor of reorganizing the HSC in December 2010, but now say they regret it. “I believe we made a mistake in changing the policies to, in a sense, further the disconnect between health sciences and the hospital operations from the university at large when we adopted (the new structure),” Gallegos said. “I take blame for that because I was on the board.”

And, he said, there may be constitutional questions. While the state constitution mandates that the board of regents has full oversight, regents don’t have a majority on the HSC board, Gallegos said.

“As a result we tend to have really two campuses. Simply put, in my opinion, we either are one university and one president and one board of regents, or we’re not. It’s really not that way, but it should be,” Gallegos said.

Koch agrees, saying the UNM president and regents have little oversight.

“I think Paul Roth does a great job. He’s outstanding … (but) we’ve gone too far,” Koch said. “What you really have is two presidents now … .”

However, regents Heidi Overton, Brad Hosmer, Conrad James and Suzanne Quillen, who chairs the HSC board, disagree and say they are comfortable with the current structure. In fact, Quillen thinks it could use a little more streamlining.

“(The approval process) still seems rather lengthy. Some of that is needed because it’s a public institution and it needs some checks and balances, but I think there’s opportunities to improve and streamline our decisions,” said Quillen, who works in the health care industry.

For example, a few months ago, UNM’s Carrie Tingley Hospital needed water lines replaced at a cost of about $330,000, Quillen said. Any construction or building modification costs of more than $300,000 have to be approved by regents. Regular expenditures require regents’ approval if they are more than $500,000.

She said she considered it an urgent matter, but it had to be approved by a subcommittee of the UNM hospitals board of trustees – which oversees hospital operations – the full hospital board of trustees, the HSC board of directors and then the full board of regents, she said. “One thing we could improve is to set some thresholds that will allow the Health Sciences Center to make some decisions such as that,” Quillen said.

Regents president Jack Fortner is somewhere in the middle of this debate.

“I think it worked before there was a health sciences board, and it works now,” Fortner said. He pointed out that the board and its subcommittees eliminate an excessive number of meetings regents would otherwise have to attend.

” … On the other hand. if you want regents to be involved in all of it, then it’s probably not as efficient,” Fortner said. “Ultimately, the regents still have final authority on what goes on over there.”

Asked if the university president has enough authority, Fortner said there was no simple yes or no answer.

“That’s part of the evaluation process,” he said.

But Fortner believes having a health sciences board is going to be especially useful as the Affordable Care Act kicks in. “It really is going to affect our billing, our efficiency, our reimbursement rates. We’re looking at major issues,” Fortner said.

Other options

Roth led the charge on changing the governance structure, but says he is open to discussing other options.

“My personal view is that we serve the community and the public and our job as leaders is to assure that whatever we do maximizes positive outcomes and that we should never be married to any particular way of doing that, or any structures,” Roth said. “So if there is a better way of being structured or better way of making decisions, we have to consider that. It’s our responsibility.”

Some health sciences centers, such as the University of Tennessee, operate under the umbrella of the main university, meaning they don’t have their own board of directors and are overseen by the board of trustees, which is a governing body similar to regents.

Texas A&M officials are working on integrating the health sciences center with the main campus, an “extensive and complex” process that began last year, according to a letter from A&M president R. Bowen Loftin.

Frank, a former psychology professor and administrator who has decades of experience in health sciences, says the UNM governance structure is unheard of these days.

“There’s several other solutions and each has a pro and a con to it. And that’s the problem. There’s no perfect solution here,” Frank said. Still, he said he hopes the regents will tackle the issue soon.

“The regents created the problem, the regents have to solve the problem,” Frank said.