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Regents ties stir concern at U of I

Critics fear insurer could be affecting presidential search

Erin Jordan

Des Moines Register

November 29, 2006

Session Fuels Optimism About Presidential Hunt

[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. — Some University of Iowa faculty say they're concerned about potential conflicts of interests resulting from ties between Iowa Board of Regents members and the state's largest health insurance company.

Four current or former regents have served on the board of directors of Wellmark Blue Cross/Blue Shield, which pays millions in benefits yearly to University Hospitals, the 762-bed hospital that is part of the U of I. Regents professionally linked to the insurance industry seem to have heightened interest in the hospital, faculty members said.

"I don't think it's wise to have such great representation of the insurance industry on the board," said Katherine Tachau, a U of I history professor. "That tends to make situations of the academic hospital loom larger than they would otherwise."

The regents voted Nov. 17 to reject four finalists for the U of I presidency, saying the candidates did not have enough health science experience. The move shocked the U of I community and spurred widespread speculation that Iowa's powerful insurance industry is exerting influence over the presidential search as a way to better control University Hospitals.

The current or former regents linked with Wellmark are:

- Teresa Wahlert, the regents' president pro tempore and a former Wellmark board member.

- John Forsyth, Wellmark's chairman and chief executive officer and a former regents president. He resigned from the regents in January 2005 after Iowa Attorney General Tom Miller ruled there was a conflict of interests in representing both University Hospitals and Wellmark.

At the time Forsyth left, Wellmark was the largest private contractor to the U of I hospital system. It paid $140 million in benefits to the hospital during fiscal 2004, second only to Medicare. Wellmark also administers health insurance packages for Iowa's three universities, contracts that ranged from $650,000 to $4.5 million at the time Forsyth was on the board.

- David Neil, a Wellmark board member and former regent. He also resigned from the regents in January 2005.

- Marvin Pomerantz, a Wellmark board member and former regent.

In addition, Lisa Arbisser, the wife of regent Amir Arbisser, is a former Wellmark board member.

Tachau, the history professor, said the health insurance industry has been "overrepresented" on the Board of Regents. "The interests of health insurance companies and academic hospitals do not always coincide," she noted.

Nick Johnson, a U of I law school lecturer, criticized the presidential search on his blog, "FromDCtoIowa." He questioned the regents' support of Deborah Freund, a former Syracuse University vice chancellor who was one of seven people interviewed for the U of I presidency. Freund serves on the board of a major Blue Cross/Blue Shield company in New York and said she was trained to run insurance companies.

"At a minimum, those regents who prefer her over all others are not troubled by this background ... (W)orst case, they see it as precisely what they do want," Johnson wrote.

Members of the 18-person search committee said regents President Michael Gartner lobbied for Freund to be included on a list of finalists, but she did not make the cut.

Gartner and Wahlert did not return phone calls requesting comment on ties between regents and Wellmark. Wellmark spokeswoman Angela Feig did not return two phone messages Tuesday afternoon.

One regent believes the U of I's failed presidential search has its roots in a contract dispute two years ago between the hospital and Wellmark. Regent Robert Downer, an Iowa City lawyer, suggested in an essay in the Des Moines Sunday Register that the regents' actions after the conflict over reimbursement rates drove former U of I President David Skorton from the university.

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

In an interview Tuesday, Johnson, the law lecturer, said that whatever the substance of the current dispute may be, "there is clearly a troubling appearance involving a relationship between an industry and a company and a governor and a board of regents."

Of the regents with ties to Wellmark, all except Pomerantz were appointed by Gov. Tom Vilsack, who this week became a mediator between the faculty and regents in the controversy over how the next U of I president will be hired and what qualifications he or she needs.

Session fuels optimism about presidential hunt
Erin Jordan

Des Moines Register

November 29, 2006

The University of Iowa could have a new president in a month, said people who attended a closed-door meeting Monday with Iowa Gov. Tom Vilsack.

The mood at a Faculty Senate meeting Tuesday was calm, considering the group had been poised to take an unprecedented vote of no confidence in the Iowa Board of Regents. Faculty Senate President Sheldon Kurtz called off the vote Tuesday morning, saying the three-hour talk with Vilsack, regents and others in the UofI community was “fruitful.”

“Working through these issues will take some time, and we need to provide the governor with that time,” Kurtz told the group of about 200 faculty members gathered in the Senate chamber of the Old Capitol.

Kurtz provided no further details about what was discussed at the meeting, even when Donald Macfarlane, a professor in the Carver College of Medicine, said: “I haven’t heard your assurance that you’ve seen a plan.”

State Sen. Bob Dvorsky, D-Coralville, attended the Monday meeting and said he thought a new leader would be named soon.

“It’s not a highly detailed plan, but it’s a way to move forward,” Dvorsky said. “Within a month, we should see some of the things carried out.”

Staff Council President Mary Greer, who attended the Monday meeting, apologized for the secrecy in an e-mail to colleagues Tuesday. Faculty, staff and students railed against secrecy of the Iowa Board of Regents in a multi-month presidential search.

The regents voted 6-2 on Nov. 17 to reject four finalists in the presidential search.