Physi­cian group files for bank­ruptcy

WSU af­fil­i­ate lost half of mem­ber­ship over past decade

The Detroit News - - News - BY KAREN BOUFFARD The Detroit News

The Univer­sity Physi­cian Group — which rep­re­sents hun­dreds of doc­tors with fac­ulty po­si­tions at Wayne State Univer­sity who prac­tice at the Detroit Med­i­cal Cen­ter and other Metro Detroit health care in­sti­tu­tions — has filed for Chap­ter 11 bank­ruptcy re­or­ga­ni­za­tion in Detroit fed­eral court.

The non­profit, multi-spe­cialty physi­cians prac­tice group is com­prised of many mem­bers as­so­ci­ated with Wayne State Univer­sity’s School of Medicine and pro­vides pri­mary and spe­cialty care across Metro Detroit. The group has 873 em­ploy­ees, in­clud­ing 300 physi­cians as well as other clin­i­cians and sup­port staff, who work at in­sti­tu­tions in­clud­ing the Kar­manos Can­cer Cen­ter.

“We’ve been do­ing ev­ery­thing we can to avoid re­or­ga­ni­za­tion un­der Chap­ter 11,” Charles J. Shan­ley, who be­came CEO of the group in March, told The Detroit News Thurs­day. “It was a dif­fi­cult de­ci­sion but it was the right one.

“Our pa­tients are still go­ing to be able to see their doc­tors, and our doc­tors are go­ing to be able to see their pa­tients,” Shan­ley added.

“This is a re­struc­tur­ing — this is not a liq­ui­da­tion, it’s not a clo­sure . ... Our oper­a­tions will con­tinue (and) our em­ployee com­pen­sa­tion and ben­e­fits will con­tinue.”

The physi­cians’ group, known as UPG, pro­vides health care ser­vices for pa­tients at ma­jor teach­ing hospi­tals such as the DMC’s Harper Univer­sity Hos­pi­tal and Chil­dren’s Hos­pi­tal of Michi­gan, as well as hospi­tals in the Beau­mont Health, Henry Ford, St. Joseph Mercy

and As­cen­sion St. John-Prov­i­dence health sys­tems.

In an af­fi­davit filed with the court, Shan­ley said the group’s clin­i­cal oper­a­tions are no longer sus­tain­able “in the ab­sence of long-term ex­ter­nal sub­sidy” due to a 50 per­cent de­cline in the num­ber of its physi­cian mem­bers over the past decade.

The group asked the court to re­lease UPG from leases it holds on six prop­er­ties where UPG clin­ics are lo­cated. The clin­ics were ei­ther va­cant, pro­vide ser­vices that du­pli­cate those at clinic lo­ca­tions, or are priced above their mar­ket value, the group claims.

UPG also asked the court to al­low it to con­tinue pay­ing em­ploy­ees’ salaries and ben­e­fits, claim­ing $1,681,000 in work­force obli­ga­tions, in­clud­ing $131,400 that will be­come due be­fore the bank­ruptcy is re­solved. Jeff Lutz, a spokesman for UPG, said the physi­cian group has enough rev­enue to con­tinue pay­ing em­ploy­ees.

Asked why so many physi­cians left UPG over the past decade, Shan­ley al­luded to a pe­riod of in­sta­bil­ity that cul­mi­nated in the near-split with DMC last spring. Ne­go­ti­a­tions for a new con­tract stalled, and both sides said they were ready to end their 100year part­ner­ship.

The stand­off ended in Septem­ber when the par­ties en­tered into a new five-year con­tract.

“What I would say is that over the course of the last decade or so there have been a lot of fi­nan­cial chal­lenges for UPG, there’s been a lot of in­sta­bil­ity,” Shan­ley said.

“One of the won­der­ful things about what we just com­pleted with the Detroit Med­i­cal Cen­ter was es­tab­lish­ing a plat­form for di­a­logue and col­lab­o­ra­tion to cre­ate some sta­bil­ity.

“I think we’ve got a new start, and this is about be­com­ing a stronger, fi­nan­cially more sta­ble part­ner for the Detroit Med­i­cal Cen­ter.”

The DMC sup­ported the UPG’s move.

“The DMC is com­mit­ted to our col­lab­o­ra­tion with the Wayne State Univer­sity Physi­cian Group, and we value the ac­cess, ex­per­tise and spe­cial­ized care that these physi­cians pro­vide to our pa­tients,” said Dr. An­thony Tedeschi, chief ex­ec­u­tive of­fi­cer for the Detroit Med­i­cal Cen­ter.

“We share a long­stand­ing his­tory and mis­sion of serv­ing the health care needs of the Detroit com­mu­nity, and we plan to con­tinue in do­ing so.”

Wayne State Univer­sity Physi­cians Group doc­tors have af­fil­i­a­tions at hospi­tals and health sys­tems across Metro Detroit in­clud­ing Oak­wood Health­care Inc. and St. Joseph Mercy Oak­land.

“UPG has re­la­tion­ships with mul­ti­ple health sys­tems and this will not af­fect those,” Shan­ley said Thurs­day. “We in­tend to con­tinue those.”

In­de­pen­dent of UPG, Henry Ford Health Sys­tem and Wayne State Univer­sity in Septem­ber signed a non-bind­ing let­ter of in­tent to ex­pand their longterm part­ner­ship. They hope to fi­nal­ize the agree­ment in early 2019.

The en­vi­sioned part­ner­ship would des­ig­nate Henry Ford Hos­pi­tal as the pri­mary in­sti­tu­tional af­fil­i­ate for the Wayne State Univer­sity’s School of Medicine, Col­lege of Nurs­ing, and Col­lege of Phar­macy and Health Sciences.

“(The UPG fil­ing) has no im­pact on Wayne State’s re­la­tion­ship with Henry Ford,” WSU spokesman Matt Lock­wood said in an email.

In Wed­nes­day’s fil­ing, UPG claimed it has as­sets of $10 mil­lion to $50 mil­lion and li­a­bil­i­ties in the $10 mil­lion to $50 mil­lion range.

The physi­cian group be­gan with a sim­ple mis­sion to serve the Detroit Med­i­cal Cen­ter and the Detroit com­mu­nity, Shan­ley said. Re­or­ga­ni­za­tion would re­turn to that ba­sic mis­sion, he said.

“UPG be­gan as an aca­demic re­fer­ral prac­tice on the DMC cam­pus — we’re re­ally just go­ing back to our roots,” Shan­ley said. “We have a very ex­pan­sive port­fo­lio of leases in the pe­riph­ery which we can no longer sup­port, and so we’re go­ing to re­or­ga­nize to a clin­i­cal foot­print that is sup­port­ive of our mis­sions — that’s the need of the re­struc­tur­ing.

“At the end of the day, 80 per­cent of our clin­i­cal work and rev­enue oc­curs on the DMC cam­pus, so what we’re go­ing to re­struc­ture is a rel­a­tively small pro­por­tion of our to­tal clin­i­cal rev­enues and ac­tiv­ity,” he added.

“And we’re go­ing to do it in a way that main­tains our top val­ues, which are pa­tient care and ac­cess to the physi­cians, and our ed­u­ca­tion com­mit­ments to the res­i­dents and the med­i­cal stu­dents that we teach.”

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.