WSU, DMC say partnership over

Detroit — Wayne State University and the Detroit Medical Center ended their nearly 100-year partnership, the institutions said Wednesday, with each party blaming the other for the split.

The move is the latest in what’s been a contentious relationship, and if the breakup holds, it could trigger tumultuous changes for Metro Detroit’s health care industry, patients and the university’s 300 doctors and medical school as they look for new partnerships.

Dallas-based DMC owner Tenet Healthcare Corp. and Wayne State have been in negotiations on a contract extension that would have kept doctors with the Wayne State University Physician Group (WSUPG) treating patients at DMC hospitals. But on Wednesday, Wayne State President M. Roy Wilson said he was surprised by Tenet’s move to end negotiations and “dissolve” the partnership, beginning with the physicians.

The physician group has a strong affiliation with the WSU School of Medicine, where many of its doctors teach, and which provides medical, administrative and clinical services in DMC hospitals.

“This came as a surprise to Wayne State and WSUPG, as we were working toward a mutually beneficial, long-term contract that would allow Tenet to continue meeting its financial goals while allowing WSU to develop additional partnerships with health care entities that share the vision of creating a cutting-edge academic health sciences center,” Wilson wrote.

But Detroit Medical Center CEO Anthony Tedeschi said in a statement that talks ended because “our relationship with (Wayne State) leadership has become “acrimonious,” referencing an April letter from university leadership that put a mid-May deadline on contract talks.

“The letter received on April 19, 2018, from WSU (School of Medicine) leadership threatening to end clinical services coverage and administrative leadership for clinical programs at the DMC forced us on a path to protect access to care for our patients and seek alternative partnerships,” Tedeschi said in a statement. “DMC will do what is necessary to continue to provide excellent care for Detroit’s children and adults, and will begin immediately looking for a new, long-term academic partner for DMC.

Tenet referred questions raised by The Detroit News on Wednesday to the DMC.

Dr. Janis Orlowski, chief health care officer with the Association of American Medical Colleges, said the breakup is unusual and could lead to disruption in patients’ care.

“Although there has been disruption between schools of medicine and teaching hospitals in the past, this is unusual and seems abrupt,” Orlowski said. The nonprofit Association of American Medical Colleges is based in Washington, D.C., and facilitates students applications to medical school and residency programs.

“In order to have a smooth transition with the faculty, this is normally discussed and done over an extended period of time,” she said. “I think in these situations, we are worried about the faculty and their jobs, but we really have to worry about the patients, how they will be treated and their concerns.”

Wilson said in his letter to Wayne State staff that they are going to work to make sure patient care and student education is uninterrupted. Tenet’s contract with medical students and residents was not up for negotiation and includes five-year “rolling” provisions to ensure all residencies are taught to completion, officials said.

“Medical students and residents can be assured that their education will not be affected,” Wilson’s letter said.

“We are disappointed with this outcome, but we have offered to work with Tenet to ensure a smooth transition. Unwinding a partnership that has endured for decades is a complex undertaking and may take several years of hard work.”

The relationship has been strained for years.

In May 2007, Wayne State officials tried to stop Michigan State University from establishing a satellite medical campus at the Detroit Medical Center, claiming the move would give DMC leverage to forestall future contract negotiations and threaten Wayne State’s medical school. The MSU College of Osteopathic Medicine went ahead with its plan and now teaches at DMC, Macomb University Center and in East Lansing.

In February 2010, the DMC and Wayne State signed a five-year contract that overhauled the partnership between the two organizations, giving DMC sole responsibility for hiring teachers for residency programs and agreeing to hire Wayne State doctors to teach medical residents. They also agreed to a three-year deal to hire the physician group to work at DMC’s eight hospitals.

The deal ended a lengthy financial dispute in which DMC halted payments of $1 million a month to Wayne State in 2008. The institutions resolved the dispute a year later when DMC agreed to pay $12.3 million for doctors’ services.

But within a month after the 2010 deal was signed, DMC announced it would be purchased by a for-profit health system that would assume its debts, invest in the hospitals and commit to keeping them open for a decade. The transfer of DMC to Tenet Health did little to ease the continued tensions between Wayne State University and the DMC.

Henry Ford Health System officials declined to comment Wednesday on whether they hope to expand their relationship with Wayne State following the DMC split.

“There has been interest expressed by other academic institutions,” said Tedeschi Wednesday, adding the DMC is attractive to medical schools because of the number of complex cases its doctors deal with. “That’s something that we will definitely be looking at is additional academic partners.”

Dr. Charles Shanley, president and CEO of the WSU Physician Group, said talks focused on two areas: administrative services for department chiefs and chairs, and clinical services.

“We weren’t trying to get anything other than fair compensation ... that’s another reason I don’t understand about pulling the rug at the 11th hour,” Shanley said. “From my standpoint as CEO of the University Physicians Group, it was a complete surprise because we have been negotiating with them in good faith for months. We had given two extensions, and we were at the finish line.”

Shanley said Tenet takes a transactional approach, adding “we need to identify a partner that shares our values and academic mission.”

“Any academic medical center has a statutory exemption to reinvest downstream revenues into its academic mission,” he said. “They do it to support the research mission, and that elevates everybody. Tenet doesn’t want to do that.

“It was anathema to me that they would pull out of it. We provide a lot of critical services and safety net services for the community.”

Going forward, WSUPG doctors will continue to provide care, Shanley said, even if Tenet does not want them for their personal reasons.

“We are not going to walk away from any of this,” Shanley said. “(Doctors) will go to work May 15 and again May 16. The question becomes what does Tenet want? They did not provide a transition plan,” Shanley said.

Tedeschi said the talks have been inaccurately portrayed as having been between Tenet and Wayne State.

“There’s been an effort to tie this to Tenet, but there’s been a relationship between DMC and Wayne State for many decades,” Tedeschi said.

cmacdonald@detroitnews.com

Staff writers Jennifer Chambers and Sarah Rahal contributed.