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U of I seeks remedy for unease

Those wanting a university president with experience in health care had one until they drove him away, one regent says.

Erin Jordan

Des Moines Register

November 26, 2006

[Note: This material is copyright by the Des Moines Register, and is reproduced here as a matter of "fair use" for non-commercial, educational purposes only. Any other use may require the prior approval of the Des Moines Register.]

Iowa City, Ia. - Does the controversy surrounding the University of Iowa's aborted search for a new president have its roots in a contract dispute two years ago between University Hospitals and the state's largest health insurance company?

That's the question being asked in Iowa City last week. And in the view of many U of I faculty members, along with at least one member of the Iowa Board of Regents, the answer is yes.

The Iowa City campus has been roiled by controversy since the decision nine days ago by the regents. The board voted 6-2 to throw out the names of four finalists for the U of I presidency and to disband the 18-member search committee that picked the final four.

U of I faculty members already were testy about the search process because the committee was headed by Regent Teresa Wahlert of West Des Moines, rather than a faculty member.

Regent Robert Downer, an Iowa City lawyer, suggests in an essay in today's Des Moines Sunday Register that the regents' actions following the contract dispute with Wellmark Blue Cross and Blue Shield drove former U of I President David Skorton from the university.

"The irony in all of this is that Skorton possessed the qualifications that the board majority now says it needs in a U of I president," Downer writes.

"The justification for terminating the search, and the search committee, at this point escapes me," he also writes.

Skorton, a cardiologist and longtime U of I administrator, left Iowa City last summer to become president of Cornell University in Ithaca, N.Y.

Members of the Board of Regents have given little explanation for their 6-2 decision on Nov. 17 to restart the U of I search.

Afterward, Regents President Michael Gartner, a Des Moines businessman, said a majority of board members and all four regents on the search committee wanted "candidates who had more experience as leaders who oversaw complex health sciences operations as well as the myriad of other academic and nonacademic operations of a large university."

Neither the regents nor the search committee has publicly identified the four finalists. The Register learned that three of them are provosts at large universities with health science operations or medical schools. The fourth finalist is president of a midsized university.

Conflict may stem from 2004 dispute

Downer believes the conflict that ultimately drove Skorton from the university started in December 2004, when Skorton said University Hospitals would terminate its contract with Wellmark Inc. by Dec. 31, 2005, if the two sides could not negotiate a new contract that included higher reimbursement rates for services provided to Wellmark clients by University Hospitals.

The dispute snowballed and led to the resignations of three regents.

John Forsyth, Wellmark's chief executive and the regents president at the time, resigned from the board after Attorney General Tom Miller ruled that he had a conflict of interest in representing both the insurance company and University Hospitals.

Wellmark and the university ended their standoff in June 2005 with a standard rate increase but an agreement that the U of I would have more input on future rates.

Downer: Salary snub tied to Wellmark

Some U of I faculty and staff said Skorton won the battle, but, in the end, lost the war.

"They were unhappy with the fallout," said Punit Vyas, a U of I graduate student in health administration and a member of the presidential search committee, referring to state leaders.

"They couldn't have kept Skorton because he wouldn't have been a puppet in their hands."

In August 2005, two months after the Wellmark dispute ended, the regents voted unanimously to give Skorton a 3 percent base salary increase to $302,047 - compared with 5 percent raises that were given to the presidents of Iowa State University and the University of Northern Iowa.

Downer now says he regrets voting for the smaller increase and says he did so to "maintain unity" on the board. Downer says the raise was a direct result of Skorton's involvement in the Wellmark dispute.

"This was almost entirely associated with the Wellmark contract matter," Downer said. "Not to have said that is unfair to someone who spent 26 years at an institution in our governance."

Gartner did not return calls last week seeking his reaction to Downer's comments.

In the past, Skorton has said little about what role, if any, the size of his pay raise played in his decision to leave the U of I. He could not be reached last week for comment for this article.

Past presidents didn't have health expertise

Downer, in his essay, questions Gartner's assertion that the University of Iowa needs a leader with health care expertise.

"Have U of I presidents historically possessed health-care expertise?" Downer writes. "No."

Before Skorton, the U of I's presidents were a biochemist, a Greek classics scholar and a law school dean.

"If, in fact, the health-care expertise now touted as being critical to serving as U of I president is a long-recognized prerequisite of the position, why was Skorton denied a raise comparable to the other presidents?" Downer asks. "I would submit that it was due to Skorton's heresy in giving a notice of termination of the University of Iowa Hospitals ... contract with Wellmark."

Downer has said the regents' decision to throw out the four finalists recommended by the search committee and to start the U of I search all over was "inexplicable."

He writes in his essay: "Those board members not on the search committee had been repeatedly told by the board members on the committee that the board would have an excellent field of candidates from which to make our final selection.

"We were further urged to act quickly because numerous peer institutions were only slightly behind us in a presidential search process, and that the best candidates would be taken by these other universities if we did not act expeditiously."

Best candidates suddenly lacking

The regents interviewed seven semifinalists on Nov. 10-11 and discussed the candidates on Nov. 14-15.

"However, a mere 30 hours after that meeting was again recessed, these 'outstanding candidates' were suddenly found to be lacking," Downer writes.

"I also have great difficulty in accepting the board majority's explanation for 'blowing up' the search for this reason because, even though I am chair of the board's hospital committee, I was never contacted regarding this," he continues.

"I felt that the seven persons interviewed by the combined search committee and Board of Regents were truly outstanding," he writes.

Downer questions the need for the new president to have hands-on health-sciences management experience. He notes that the regents were considering creating a vice president's job under the U of I president to oversee University Hospitals and the College of Medicine.

"It is clear that the hospital is running very smoothly under the outstanding leadership of hospital CEO Donna Katen-Bahensky," Downer says.

A semifinalist who missed the cut

Adding fuel to the controversy was the disclosure last week by some members of the search committee that Gartner pushed for Deborah Freund, a former Syracuse University administrator with ties to a Blue Cross Blue Shield health insurance company, to be added to the list of finalists.

Freund, a vice chancellor and provost at Syracuse at one time, is a health economist. She sits on the board of directors of Lifetime Health, a $5 billion company that owns Blue Cross and Blue Shield insurance plans in upstate New York.

Freund was not included on the list of four finalists the search committee picked. Committee members said the reasons she was left off included concerns about her connections with the insurance industry, a belief that other candidates were stronger, and concerns about her management style.

The university has paid a consultant, Heidrick & Struggles of Atlanta, at least $110,000 to conduct the search.

The week's controversy that bubbled and boiled in Iowa City prompted Nicholas Johnson, a well-known U of I law professor, to comment on his blog: "As Stan Laurel would have said to Michael Gartner, 'That's a fine mess you got us into, Ollie!'"