By Amy Silverman
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By Michael Lacey
By Weston Phippen
Besides the national ACGME, Maricopa County is the only other agency that has responsibility over MedPro's residency programs. But the county hasn't had the best record when it comes to keeping an eye on its contractor.
When the county began efforts at privatization of the hospital in 1994, S.K. Ching and Associates conducted an audit which found that the doctors of MedPro weren't working the full amount of hours they were being paid for. Malone and MedPro contested the results of that audit at the time.
A 1995 memo from the Office of Management and Budget complains that MedPro's contract was approved by the Board of Supervisors without ever being reviewed by county budget officials.
The result: The county paid MedPro millions more on previous contracts than its services were worth, according to Betsey Bayless.
Bayless was a frequent critic of MedPro when she was on the Board of Supervisors. "I was the con person. Everybody else was a pro person," she says.
In 1996, Bayless asked county staffers to look into MedPro's charges. What they found was that MedPro's contract was overvalued by several million dollars. But they recommended the 1996 MedPro contract anyway--and the Board of Supervisors approved it. Bayless voted against it.
"I am disappointed that our staff, attorneys and consultants recommended this contract to the board and represented that [MedPro] was at risk, when, in fact, it was not," Bayless told the county administrator.
Earlier this year, Quorum--the consulting firm that has been running the hospital--whittled down the MedPro contract from $35 million to its current $32 million. Bayless voted for that contract.
MedPro, in sometimes-heated correspondence with the county during contract negotiations, has defended the value of its services. But in the spirit of what Dr. Malone called "compromise," it has allowed the value of the contract to drop from $38 million in 1995 to its current level.
Still, even the current contract was passed under "emergency measures" because time was running out for approval and there was little scrutiny by the board or staff and no public comment.
Bayless says that it was important to keep the same physicians in place. "The best thing for Maricopa County is to have some stability at a reasonable level, which I felt that contract obtained for the first time in years," Bayless says.
Maricopa County now pays about $7.1 million for MedPro's teaching responsibilities. The program operates at a loss which must be made up by the taxpayers.
The Maricopa Medical Center leads the state in receiving state Medicaid funds for graduate medical education--about $6.1 million, or 33.8 percent of the total state funds, according to a report by the Arizona Council for Graduate Medical Education. MMC is second in the state in receiving medical education funds from public sources, the report says.
Overall, Maricopa County's graduate medical education shows a net loss of $3.8 million per year, according to a report by Quorum to the Board of Supervisors.
Quorum has recommended closer oversight of MedPro's management of the residency programs. In a recent report to the board, the consultant said, "The means to monitor, assess and ensure accountability by the contractor should be strengthened."
To do that, Quorum recommended that MedPro's payments for teaching be renegotiated based on national benchmarks and that responsibility for academic affairs be moved from MedPro to the county hospital administration.
It's unclear if any of those changes has taken place. Frank Alvarez, a Quorum employee and CEO of the hospital, declined to be interviewed for this story on the advice of his attorney.
"The Maricopa Integrated Health System . . . is committed to the highest standards in physician training," he said in a written statement.
And Maricopa County remains committed to MedPro. The county supervisors, in their continued search for a private partner to take the county hospital off their hands, are exploring a variety of options, most of which anticipate MedPro's continued service.
Quorum has already drafted a request for proposals for two new management options. One envisions a partnership between the county and a private contractor, the other an arrangement where physicians run the hospital. MedPro could become a part owner of the hospital, its manager or simply continue as a contractor. The draft RFPs specify a five-year contract.
Whatever MedPro's future may hold, the Board of Supervisors seems unwilling to question the way the contractor has done business in the past.
This was reflected in the reception Cynkutis-Simon's attorney, Jim Vaughan, got when he went to the Board of Supervisors directly, just a few weeks before Magda was fired, to plead with the board to take action before the matter came to litigation.
"The greatest problem with privatization of public services lies in the failure of the county to retain sufficient control to prevent windfall profits to the contractor and gross injustices to the county workers," he said, reading from a prepared statement. "In the present case, Dr. Cynkutis-Simon followed the rules at each stage in her attempt to fix something which damaged the county medical education program. . . . If successful in firing her . . . then MedPro will end her chances of being a surgeon. Is this to be the price the county allows to be imposed upon those who follow the rules?"
The Board of Supervisors stared back blankly after Vaughan finished, then adjourned.