Jackson Jambalaya

This 2011 column authored by Dr. Heddy Matthias appeared in another publication in a galaxy far, far away. It is reprinted with her permission.   Given the current financial turmoil at UMC, it is still relevant today. 


(The University of Mississippi Health Care is a powerful economic engine, both in the state, and especially in the Jackson metropolitan area. UMHC employs 8600, and has a $1.4 billion impact on the state.)

More than 15 years ago, under Dr. Dan Jones, University of Mississippi Health Care (variously known as UMC, UMMC, UMHC, “University”) began an elaborate and expensive expansion campaign designed to move UMHC away from inner-city, poorly-paying patients to more lucrative private insurance patients in order to better manage its budget. This expansion has included a sophisticated multi-million dollar advertising campaign aimed at “branding” UMHC as the medical institution with care superior to care at non-UMHC hospitals and clinics. The plan has included extensive land acquisition around UMHCʼs main campus, and the building/renting of expansive primary care clinics in Flowood and Madison designed to compete directly with non-UMHC physicians in the Jackson area for privately insured, “bread-and-butter” patients.


UMHCʼs mission is to become the dominant, rather than the best force in medical care by crushing its competition with special tax exemptions, $140 million funding from Mississippiʼs legislature…medical student, intern & residentsʼ non-market priced labor, tax-exempt foundations, other secret corporate entities, pensions and healthcare insurance for personnel paid by the state, and other laws, rules, and regulations peculiar to UMHC.

To further these aims, University Physicians was formed. The raison d'être for this corporation/LLC is murky. Although the details of this corporation, a professional limited liability company incorporated in 2005, are unknowable to the general tax-paying public, UP appears to serve as a method to separate the private practices of physicians at UMHC and the money earned through these practices from the other financial arrangements at other UMHC entities.

By forming this separate corporation, it appears that physicians at UMHC wear two completely separate hats--the researcher/clinician/professor/surgeon physician at the core of all great teaching university hospitals, and the “private practice” physician who may ply his trade like other non-teaching physicians in the community by seeing patients, billing, and receiving payment. Private-practice physicians in the community, for years now, have been doubtful as to how a full-time professor/clinician/researcher can also have a full-time private practice.

Why was University Physicians formed? It is not a stretch that tax-payers and physicians believe it was formed as a vehicle to shroud the mixing and/or separation of financial affairs between the State of Mississippi, University Hospital, UMHC and University Physicians.

The financial affairs of UMHC have been enmeshed in a bewildering web of secrecy, slight of hand, and mystery for decades. To further obscure matters, the financial structure of UMHC is enmeshed in another corporation, the Institute of Higher Learning (IHL), another private corporation serving the tax-payers of Mississippi without public accountability or scrutiny. The Legislature is asked to spend millions of dollars each year on secondary education, yet neither they nor the public may investigate the finances of IHL dollar by dollar.

Many citizens wonder--”Why arenʼt the ledgers of these publicly-supported institutions known to all who wish to know them? In fact, why isnʼt every dollar spent for everything pertaining to Mississippiʼs state-sponsored and taxpayer supported educational processes public information, including salaries and pensions of all employees of UMHC? If the public knows a university football coachʼs salary, why donʼt we know a University Physicianʼs salary, and why are these physicians and administrators allowed to mix accounts from University Physicians with state money and conceal this activity from the public?” Even the PEER Committee of the Legislature declined to investigate the finances of UMHC in the 1990s, leaving the sacred cow of UMHC and its finances immune to examination and criticism.

Non-university physicians in the Jackson area are very concerned about UMHCʼs expansion in the metro area. Competition is the soul of market-driven medical care, and if applied fairly, leads to improved care for patients, and a curb on ever-increasing prices. Many physicians are ready, willing, and quite capable of competing with other physicians on a level playing field. However, nothing about the expansion of UMHC beyond its traditional campus is fair competition. UMHC, especially University Physicians, have property tax exemptions, $140 million from the Legislature, tax-exempt foundations, and special state and federal tax-exempt programs and subsidies. Who pays the salaries, the healthcare costs, the retirements of personnel employed by University Physicians? Who pays the physiciansʼ practice insurance, medical insurance, malpractice insurance, rent, retirements, and other office expenses?

These overhead expenses account for approximately 55% of the gross income of a group practice in the Jackson area.

Many non-university physicians believe there should be an immediate end to the subsidization of full-time physicians at UMHC. They seek an end to the intermingling of state and private practice funds. They will ask their legislators for an accounting of the state-run organization, UMHC, and hope the accounting will be open and transparent for all to see. This request extends to the accounting of the IHL, which is still, inexplicably, closed to public scrutiny. The Legislature and taxpayers of Mississippi should request a continuous, thorough, and unbiased open accounting for every penny that is spent and earned by any state employee on any state-owned or state-supported property or institution.

Taxpayers and non-university physicians sound the mantra “show us the money.” An investigation should put an end to the establishment of private, separate corporations and limited liabilities whose primary function is to purposefully make it impossible for anyone except the Chancellor, board members of the IHL, Dr. Keeton, and accountants at UMHC to follow the money. All subsidies and funding from the Legislature to UMHC should cease if the entire corporation is unwilling to expose their finances to the public. UMHC should not receive all the benefits of a state-sponsored institution (tax exemptions, pensions, health insurance, etc.) but compete unfairly against private practice physicians who have none of these benefits in supporting their 55% overhead costs.

UMHC is the only medical school in the state of Mississippi. Its mission is to teach, train medical students and resident physicians, to perform research in the biomedical sciences, and to establish cutting-edge medical programs. UMHC, since the historical tenure of Dr. James Hardy, has lacked a vision of its role in the state as the leading tertiary medical center. It has led in pediatrics by default, as it has no competition for intensive childrenʼs medical services in state, and will now require that many complicated services, such as pediatric cardiac surgery, be transferred to Batson Hospital rather than childrenʼs hospitals that might be closer to families in need (Memphis, New Orleans, Birmingham).

However, UMHC has failed to establish itself in most specialties. Although there have been some “islands of excellence” in adult medicine, UMHC has, compared to other state-supported university medical centers, a poor record in the last two decades of establishing regional expertise in internal medicine subspecialties.

It has an orthopedic program with a few expert, high-volume surgeons, although UMHC does not perform any orthopedic procedures (except trauma) with any more skill than surgeons in private practice in Jackson. I am not aware of any adult specialties at UMHC that have better reputations than comparable specialties in non-university

practices, nor are there many surgical specialties except where noted.

Voters in Mississippi are aware of the burn unit controversy and that the unit was also rejected by UMHC for whatever reasons. Are there any obstetrical services offered at UMHC that are considered superior to those in the non-university peer community? Female OB-GYN physicians and male physiciansʻ wives in the community do not choose to obtain their routine obstetrical care at UMHC, signifying that those who would be in a position to know where to obtain the best personal care choose to consult private practice physicians in the Jackson area.

An area which UMHC has neglected is in providing innovative solutions to the problems plaguing Mississippi--obesity, hypertension, renal failure, and diabetes. The 10 year-old Jackson Heart Study, which includes over 5000 patients will provide important information for investigators of cardiovascular disease (CVD) through its data collection, non-laboratory testing, interviews, and laboratory tests. However, the JHS is an observational study only.

Another serious problem is the almost complete lack of communication between the outside referring physician and the UMHC consultant. A personal phone call from the consultant to the referring physician should be customary, and is customary in private practice. This is not the standard for UMHC consultants. Referring physicians are unlikely to receive a written report on the patient, and often receive no information whatsoever; the coordination of medical care between referring physician and consultant suffers egregiously. A continuous failure of UMHC occurs when the referring or treating physician calls UMHC and attempts to contact the treating university physician or attempts to obtain medical records. In my communications with private practice MD’s over the years, this is a time-consuming trek of folly.

UMHCʼs solution to increasing its market share in lucrative subspecialties such as cardiology is to buy long-standing established Jackson area private practices and their attendant patients. These salaries are often far higher than most other physiciansʼ at UMHC, and it appears that UMHC will pay any price for these practices. In addition, to fill its huge Grantsʼ Ferry (45,000 SF) medical office UMHC recently began another initiative to buy established suburban primary care medical clinics, making these physicians either employees or members of University Physicians, with appointments to the medical faculty, one could argue that acquisition of these physicians has nothing to do with recruiting faculty/researchers/teachers, and everything to do with buying lucrative private-pay medical practices and locating them in the Grantsʼ Ferry medical office. The same will prove true for the proposed medical office building to be built in Madison, The City.

This onslaught is best epitomized in the ludicrous and incendiary opening of a spa, (UMMC Face and Skin Center), a cosmetic, cash-oriented, high-end facial clinic built in the tony Townships development in Madison. How can full-time university professors, who should be teaching residents to perform cutting-edge and complicated surgeries, have time to attend to a facial spa clinic, and how these monies taken into the medical center and how are they used, spent, paid out, and diverted to University Physicians.

If UMHC (including University Physicians) doesnʼt wish to reveal their ledgers, then they shouldnʼt receive one cent in property tax exemptions, they should pay market-value rent to the state, they should have no special state-sponsored foundation exemptions, and they University Physicians should pay all their own expenses, including pensions/ retirements (physician and staff), insurances, and healthcare. If they continue to co-mmingle funds without transparency, they should be required to run their practices, in all aspects, as we do in private practice without state assistance.

UMHC has fallen behind other comparable medical schools and teaching hospitals because it has lacked vision and has failed to establish respected areas of expertise beyond trauma care and pediatric care (by default). It appears that honest attempts to build these “islands of excellence” has begun in some areas. However, UMHC has made a conscious decision to balance its fiscal house not by excellence in teaching, training, tertiary patient care, and research, but rather by co-opting the lucrative, low- intensity medical care in the Jackson area that could and should be performed by those physicians who are graduates of its training programs.

If UMHC is allowed to maraud the bread-and-butter medical practices in metropolitan Jackson with its unfair competitive advantage, this only intensifies the distrust and skepticism directed towards UMHC by private-practice clinicians.

There will be those that argue that UMHC is at a tremendous disadvantage because of its poor payer mix. They will say that UMHC takes care of too many indigent patients, and that other physicians and hospitals in the area donʼt carry their “fair share” of the burden. Many non-university physicians believe they would love to be sympathetic and agree about their hardships, but that without a full financial accounting of UMHC, they remain extremely skeptical.

The statutes* establishing the University of Mississippi Medical Center clearly state that the hospital should fill at least 50% of its beds of “charity” patients and Medicaid patients, and that 50% of the patients seen in their clinics should be indigent or Medicaid. It would be enlightening to see if 50% of the patients seen at the Grantsʼ Ferry clinic and University Physicians Womenʼs Specialty Clinic are indigent/Medicaid.

As far as indigent care, many non-university physicians might respond, “Bring it on, but level the playing field.” UMHC leaders may present a sophisticated presentation from UMHCʼs public relations firm detailing UMHCʼs gigantic economic engine as essential to employment in the area, and the state as well. (The Ramey Agency is charged with “branding” UMHC and “University Physicians” as “superior” physicians.) The leaders of UMGC will speak of the millions and billions of dollars paid to and generated by UMHCʼs economic engine, but he will neglect to tell you how much taxpayers pay for UMHCʼs property, rent, lost taxes, pensions, healthcare benefits, and malpractice insurance.

How much financial activity is generated by non-university medical practices in salaries, benefits, and taxes in the Metro area? UMHC leaders may try to remind the press and the public that UMHC bears a special financial burden associated with the costs of teaching and training. Taxpayers will respond that the Legislature paid $140 million dollars for that obligation last year! UMHC leaders will state that the institution bears special burdens as a teaching hospital and referral center. Taxpayers will respond that UMHC has squandered its monopolistic opportunity as Mississippiʼs sole medical school and teaching center over the last three languid decades of desultory leadership. UMHC leaders may fail to mention that UMHC is exempt from all certificated of need (CON) requirements, bestowing it overwhelming competitive advantages against all other hospitals and medical investments.

Jackson area physicians have repeatedly heard UMHC leaders’ responses, they fall on deaf ears. However, their voices and demands continue to be heard loudly throughout Mississippi, especially by our Legislature. This support is based to some extent on UMHCʼs lobbying ability and unfettered access to legislators, but another aspect of this unquestioning support is based largely on UMHCʼs past history of greatness under Dr. James Hardy and others, an era that is long past, and the legacy of UMHC as the sole medical school in the state. This previous eminence has metamorphosed into a living myth, and it is the remembrance of this vanished fame that feeds the sacred cow status of UMHC. These leaders will not discuss that the contemporary mission of UMHC is sheer survival by any means necessary. They wonʼt discuss that UMHC has failed to lead the state in tertiary, cutting-edge specialty care for the last two decades.

The UMHC leaders will not explain why University Physicians buys private malpractice insurance for its physicians, despite a ruling in Mozingo vs Scharf and University Anesthesia Services that their physicians have immunity as state employees. Nor will UMHC leaders explain why the Legislature passed specific legislation allowing governmental entities to participate in private liability insurances? If physicians employed by University Physicians are considered state employees, why arenʼt their books open for examination? If UP physicians are state employees, why arenʼt they “defended” by the Attorney Generalʼs office, as they were in the past? (In fact, which assistant attorney general is responsible for giving legal advice to UMHC?) If UP physicians are considered state employees shielded by sovereign immunity from large medical malpractice awards, why do they have special, private-practice type privileges in the management of their billing and accounts receivable?

In addition, who pays for University Physiciansʼ and UMHCʼs private business attorneys to fashion their corporations and LLCs?

It appears that UMHC wishes to have it both ways when questions of money and liability are at stake. On the legal side, physicians are state employees shielded by immunity. On the financial side, they are paid a salary by the state, but are allowed to participate in an LLC dedicated to running private physician practices identical to non-university physicians, charging and collecting fees under cover of darkness to taxpayers.

In the past, UMHC was run on a plantation-type system. The Dean was the overseer of all activity, and his rule was law. This plantation-type system consisted of the Dean and certain powerful department chairmen (orthopedics, anesthesia). It was secretive, complex, and authoritarian. There was an arcane financial system that returned departmental money directly to the department chairmen, and a certain percentage of overage (the Deanʼs tax) was returned to the Dean, who would then have control over its disbursement. This was the system under Dr. Norman Nelson until it changed under Dr. Dan Jones. Under the new system, it appeared as if all the money came into University Physicians, is ultimately controlled by the Dean, and is divvied back to physicians in a Byzantine scheme know only to principles of UP, UMHC, the Administrative leaders, and perhaps members of the IHL.

UMHC has squandered its opportunities to become a great medical center, never capitalizing on its early leadership in organ transplantation.

Dr. James Hardy performed the first xenograph (chimpanzee to man) heart transplant in the world in 1964. This was preceded by the first lung transplantation by Dr. Hardy in 1963. The University of Mississippi stands in sharp contrast to Pittsburgh. It is the tale

of two hospitals--one, the University of Pittsburgh Health Center became a world center of excellence, the other, the University of Mississippi Health center staggered helplessly and clumsily without a rudder. Pittsburgh serves as a model for the importance of visionaries rather than functionaries in the leadership of a medical school/hospital. And even now, the leaders of UMHC believe that the path to first-class university medical center status flows through suburban primary care clinics, rather than tertiary, cutting- edge innovation at its main campus.

The team at Pittsburghʼs Presbyterian University Hospital did not move clinics out to suburban Pittsburgh (to compete unfairly with other recent graduates) to perform gallbladder operations or open suburban allergy clinics. Pittsburgh did not build a 45,000 square foot, $6.8 million primary care clinic and buy physician practices in Rankin County. (Although this building is owned by an out-of-state company, University Physicians are rumored to have a loan on the building.) Pittsburgh did not open a $1.8 million OB-GYN clinic within 1/4 mile of a brand new private practice OB-GYN clinic in Flowood.

No. Pittsburgh became what UMHC seems incapable of being--a real university medical school/medical center at the forefront of research, training, education, and innovation rather than a financially grasping institution bent on destroying private practice hospitals and physicians in the Jackson area, and becoming the one, and only one choice available to patients and physicians in Jackson.

This opinion will be extremely unpopular with UMHC officials and physicians, the Mississippi Legislature, and other medical and political bodies. There will be loud, powerful, and vociferous responses. Do not doubt that UMHC will vigorously defend its moral and legal “right” to continue this complete lack of financial transparency. This fight to protect the financial complexity and bewildering money streams at UMHC will turn nasty, and powerful forces will join the UMHCʼS campaign to defeat taxpayers and non-university physicians who demand to know the entire financial truth.


* § 37-115-27. Location of school and hospital.

The medical school and teaching hospital shall be built and equipped together, in connection with each other, or as nearly together or connected as may promote the most efficient operation of both of them in proper coordination one with the other. The medical school and teaching hospital shall be located and built upon part of the lands owned by the State of Mississippi in or near the City of Jackson, Hinds County, Mississippi, and commonly known as the old asylum lands, to be selected by the State Building Commission. The medical school and teaching hospital may have other locations as determined to be reasonable and necessary by the University of Mississippi Medical Center. All University of Mississippi Medical Center locations shall provide in the aggregate not less than fifty percent (50%) of their services to indigent persons including qualified beneficiaries of the State Medicaid Program.

§ 37-115-31. Operation of hospital.

The teaching hospital and related facilities shall be utilized to serve the people of Mississippi generally. The teaching hospital and related facilities shall have the power necessary to enter into group purchasing arrangements as deemed reasonable and necessary, and such powers as are necessary to establish and operate health maintenance organizations, preferred provider organizations, prepaid health benefit plans and other managed care entities regulated by Section 83-41-301 et seq., and the power to establish rates and charges for health care services, either on a fee for service, discounted, capitated or other risk based payment basis, and provided that any such entity shall primarily provide care and services to indigent persons or qualified beneficiaries of the State Medicaid Program; and further provided, however, any entity, or any affiliate of any such entity, that now or in the future provides management services to the University of Mississippi Medical Center or any of its facilities, shall not be affiliated in any manner with any managed care product established by the University of Mississippi Medical Center under the authority of this section. There shall be a reasonable volume of free work; however, said volume shall never be less than one-half of its bed capacity for indigent patients who are eligible and qualified under the state charity fund for charity hospitalization of indigent persons, or qualified beneficiaries of the State Medicaid Program. The income derived from the operations of said hospital, including all facilities thereof, shall be utilized toward the payment of the operating expenses of said hospital, including all facilities thereof.

------Sources: Codes, 1942, § 6708-10; Laws, 1950, ch. 378, § 10; Laws, 1996, ch. 496, § 2, eff from and after passage (approved April 11, 1996).

http://michie.lexisnexis.com/mississippi_print/lpExt.dll/mscode/9892/b2f1? f=templates&fn=document-frame.htm&2.0#JD_37-115-73

Kingfish note: The legislature passed a law a few years ago after the Singing River mess that made physicians salaries at public hospitals privileged information.