Critics blast handling of public health endowments
By Matt Hrodey
Three public interest groups are taking issue with the way Milwaukee’s Medical College of Wisconsin and Madison’s UW School of Medicine and Public Health are using $630 million they received by court order when the Blue Cross Blue Shield United of Wisconsin insurance company converted from non-profit to for-profit status a decade ago.
The state Commissioner of Insurance ordered the insurer to pay out the money, an estimate of how much the company benefitted financially from nonprofit status, to the two schools, which would use it to establish endowments to promote public health in Wisconsin. The commissioner ordered that 65 percent of the money go to medical education and research and the remaining 35 percent be spent on public health initiatives.
But a long, 350 page report released in May by the Legislative Audit Bureau has analyzed how the two schools are using the money and the report’s findings have been seized on by three groups to criticize the schools. ABC for Health, which is based in Madison and describes itself as “a public interest law firm connecting Wisconsin families to health care,” Disability Rights Wisconsin, a federally-mandated advocacy group, and Citizen Action of Wisconsin, a union-funded advocate for health care, jobs and consumer issues – argue that too much of the endowment money has been spent to further the institutions themselves, not public health.
They’re calling for the current commissioner, Sean Dilweg, to increase the percentage of the funds the medical schools are required to spend on public health. A report by the three organizations says that in most states where Blue Cross Blue Shield insurers went through similar conversions, the payouts ordered are used mostly for public health. “The unbalanced tilt toward medical education and research strongly suggests that Wisconsin conversion funds need stronger and unbiased oversight,” the report says.
Since MCW and UW began awarding grants from the endowments’ interest in 2004, they have given out $32.1 million and $44.1 million, respectively, according to the Audit Bureau study. The audit reviewed 80 of the grant projects and found five that “either met few of their objectives or are at risk of not meeting them.”
At both schools, a committee of administrators and senior faculty members decide where the funds allocated for research and education are spent and a second committee with health care advocates, community leaders, school officials and an insurance commissioner appointee oversee the public health funding. ABC for Health and the other groups would like authority for all the money to be given to a third party. They suggest the Wisconsin United for Health Foundation, a nonprofit created by the state in 2000 to oversee the schools’ use of the funds.
The groups object to the schools’ use of the money for faculty recruitment. MCW, for example, spent $7.4 million in endowment grants to establish master’s and doctorate programs in Public and Community Health. They also question the money being used to buy the schools’ equipment for research projects. “Faculty recruitment, development of degree programs and equipment purchases are basic medical school operating expenses and should be paid for with the schools’ operational budgets, not with public funds,” the report by the three groups argues.
The audit also raised questions about spending endowment grants on faculty and equipment. In a written response to the audit, MCW President and CEO T. Michael Bolger (who retired in June) says, “Investments in faculty recruitment and equipment are appropriate and necessary to improving health … Often new faculty members are required, new equipment purchased or degree programs indentified and developed in order to implement these new and unique projects.”
The audit also raised concerns over committee members having conflicts of interest with grant recipients. “The policies in place at the time of our review did not clearly require committee members to abstain from voting on projects proposed by organizations that employed them or with which they had other financial relationships,” it says. Both schools, in their responses to the audit, said they were writing new conflict of interest policies.