Myth #4: Duggan 'Saved' the DMC
Duggan also attacked the DMC's nonprofit model as “killing” health care in Detroit because it had been the hospital of last resort for the city’s impoverished—essentially blaming the DMC for serving those who could not pay:
https://www.wsws.org/en/articles/2020/03/28/detr-m28.html
By bringing the private equity investment company Blackstone Group to the table, Duggan almost single-handedly transformed Detroit's only major public health care complex into a facility that would not serve the uninsured. Pardon me, but I don't believe that profit was ever the primary purpose for building hospitals. They are there to help people—all people. If there are so many poor people that it is dragging our hospitals into bankruptcy, then that is a social problem that needs to be addressed at the government level...Mr. Mayor.
Anyway, during Duggan's tenure, the hospital went through an avalanche of job loss and layoffs, leaving over a thousand Detroiters unemployed. As CEO, Duggan even used intimidation to stop nurses from organizing while at DMC:
https://docs.google.com/file/d/0B7RMDVM77ZNcemtTWFNreE0zTm8/edit
According to the Michigan Nurses' Association (MNA), and an interview on WDTW, Sept. 27, 2012, nurses approached the MNA, which responded to their request for help to stand up against terrible conditions and unsafe patient care at the DMC in 2007. An organizing effort took place between DMC nurses and the MNA. But the DMC administration, led by Duggan, "waged a sustained campaign of intimidation, threats and misinformation against DMC nurses," which led to Unfair Labor Practice charges and the National Labor Relations Board getting involved. Under Duggan, "Hostile administration actions against nurses included surveillance, retaliation, interrogations and banning pro-union literature while sending excessive amounts of anti-union propaganda to nurses’ homes." Again, according to the MNA, the DMC administration led by Duggan "suppressed the organizing effort and dragged its feet through interminable labor board proceedings and insisted on packing the voting group with supervisors and managers. DMC nurses chose not to hold an election under these hostile circumstances." Same old Duggan tactics!
Then there was the scandal over the instruments not being sterilized properly.
The issues centered on the five hospitals in the DMC’s Midtown campus: Children’s Hospital of Michigan, Detroit Receiving, Harper University, Hutzel Women’s and DMC Heart hospitals. Based on more than 200 pages of emails and internal reports and dozens of interviews, the articles showed improperly sterilized tools complicated operations from appendectomies and brain surgeries to cleft palate repair and spinal fusions, kept patients under anesthesia for up to an hour as instruments were replaced and canceled dozens of operations at the last minute, some after anesthesia was administered.
"In 2010, Duggan combined three sterilization departments into one at Detroit Receiving that cleans more than 20,000 instruments per week at all five hospitals in the DMC center campus. The consolidation did not expand the size of the staff or sterilization facilities, leaving about 70 sterile technicians to clean instruments for the entire system."
Sounds to me like Duggan is more of an "Emergency Manager" than a "Turnaround Expert," concerned mostly with making numbers look good on paper, rather than in tangibly improved outcomes for humans.
More on the sterilization problem:
Duggan wants to deny responsibility because all of these articles were written after his tenure as CEO was over, but also wants us to forget that it was he who implemented the "streamlined" policy. "Streamlining" sounds like a PC word for "downsizing."
In September of 2010, Moody's downgraded the DMC's bond rating from stable to negative:
https://www.moodys.com/research/MOODYS-AFFIRMS-DETROIT-MEDICAL-CENTERS-MI-Ba3-RATING-OUTLOOK-REVISED
Their outlook revision was based on "our concerns with the difficult operating environment that is contributing to an inability to improve liquidity with anticipated sizable cash contributions needed in the near term to fund the large underfunded defined benefit pension liability and to support needed capital investment.
Later in 2010, Duggan was named in a lawsuit from the US Dept. of Justice against the DMC for a $30 million kickback scheme:
https://www.justice.gov/opa/pr/detroit-medical-center-pays-us-30-million-settle-false-claims-act-allegations
"Detroit Medical Center, a non-profit company that owns and operates hospitals and outpatient facilities in Detroit, has agreed to pay the United States $30 million to settle allegations that it violated the False Claims Act, the Anti-Kickback Statute and the Stark Statute, by engaging in improper financial relationships with referring physicians, the Justice Department announced today. The Stark Statute and the Anti-Kickback Statute restrict the financial relationships that hospitals may have with doctors who refer patients to them. Most of the relationships at issue in this matter involved office lease agreements and independent contractor relationships that were either inconsistent with fair market value or not memorialized in writing." The "improper financial relationships with a number of physicians" were discovered during preparations for the sale to Vanguard.
A Crain's article from January 2011 shows that the entire deal with Vanguard Health almost collapsed when officials began to find "hundreds of potential incidents of Medicare and Medicaid fraud and possible violations of physician anti-kickback laws"...
https://www.crainsdetroit.com/article/20110109/SUB01/301099979/fines-could-have-sunk-dmc-deal-improper-perks-for-doctors-included
Peter Caplan, an assistant U.S. attorney assigned to the DMC case, said that the deal was put in jeopardy, and there was "a real possibility that DMC could close" as a result of the violations. "Many of the violations appear to be related to efforts by Duggan to bring more physician referrals to the DMC," the article explained.
"DMC CEO Mike Duggan declined to comment for this story. But at a press conference Dec. 30 to announce that DMC would pay a $30 million settlement to resolve the improper financial relationships with physicians, Duggan described them as 'technical violations' that were 'minor' in nature. But Caplan said that shortly after DMC reported the potential violations, federal officials determined by the volume of documents that DMC's 'potential exposure would be so significant that they might not be able to pay the potential liabilities.' Caplan said federal officials then halted the investigation and began discussing the amount of the fine with DMC. Although the DMC did not admit wrongdoing, 'the $30 million was not a slap on the wrist in any circumstances,' Caplan said."
Wayne County Sheriff Benny Napoleon also called out the Duggan-DMC fairy tale as a myth:
https://detroit.cbslocal.com/2013/11/04/napoleon-claims-duggan-took-bribes-faked-dmc-turnaround/
“There is no turnaround and there was no turnaround,” Napoleon said on-air. “$50 million from the governor’s office for the DMC, his predecessor left, I believe in August, he took over in January. They got $50 million over a 10-month stretch, so he said the money was gone when he got there, but that was not true because the money was spread over a 10-month period, I believe about $27 million came between August and December when he knew he was going to be put there because his friend Gov. Granholm had orchestrated it.” “He was the recipient of about half of that $50 million, a significant tax break from Bob Ficano in the county where it was designated as a renaissance zone, then he got fined $30 million for bribery, fraud and kickbacks by the Justice Department, then he turns around sells it, puts millions in his pocket and then hundreds of people got laid off and are continuing to be laid off. How is that a turnaround?”
