New Book: Mildred Schwartz on the corruption of health care professional education

by Mildred A. Schwartz

Following newspaper reports that the University of Medicine and Dentistry of New Jersey (UMDNJ) had been double billing and up billing Medicare and Medicaid for its hospitals’ services, it was put under the supervision of a federal monitor. At the time, UMDNJ was the only NJ state-supported public university devoted to the healing professions. It was a large university with multiple campuses and hospital affiliations dispersed through the state and home to three separate medical schools.

The monitor’s investigations revealed the range of UMDNJ’s misconduct. In addition to fraudulent billing practices, other examples included unwarranted grade changes for students, failure to let bids for contracts, and political cronyism, all while UMDNJ was governed by a board of trustees that rubber-stamped university decisions while seeking personal benefits.

In his final report, the federal monitor concluded that UMDNJ’s problems were due to the actions of a few bad apples because the great majority of employees were conscientiously performing their jobs. Media commentators, in contrast, attributed UMDNJ’s misconduct to New Jersey’s culture of corruption. I found neither explanation satisfying. The first was too narrow; the second, too broad. As a sociologist, my response was to look for organizational explanations. The result of my investigation was my new book, Trouble in the University: How the Education of Health Care Professionals Became Corrupted (2014 Brill).

My decision to focus on organizational factors in explaining what had gone wrong at UMDNJ was also guided by personal experiences. I had spent the majority of my academic career at the University of Illinois at Chicago as well as briefer periods at other universities and I knew how universities worked. I had been present when the Chicago Circle campus and the Medical Center campus of the University of Illinois were merged and I co-chaired one of the coordinating committees. That experience gave me insight into the powerful role played by medical schools within a university. For example, I saw how the dominance of medicine contributed to physician-faculty expectations of deference. I had also learned something about the tensions arising from the medical center’s service roles as a result of using our medical center as both inpatient and outpatient.

In my research, three common organizational attributes stood out as pathways to corruption. One was a preference for a hierarchically-based authority structure. The second was dependence on the external environment for resources. And the third was the embeddedness that followed from the relations between UMDNJ and other bodies with which it interacted. These attributes are common in the sense that they are found in many large organizations. But they do not become linked with corruption unless they are, in some sense, distorted. For example, normal incentives to obtain resources become corrupted when they overwhelm legal or ethical constraints on the methods used.

Although many organizations have hierarchical structures, the dominance of hierarchy at UMDNJ, from the top administration down and within schools and departments, was troublesome because it gave virtually no space for more collegial forms of association. Aided by an absence of transparency, administrators cultivated an intimidating climate by punishing those who raised uncomfortable questions. Administrators could do this because of their access to discretionary resources.

The climate created even had some effects on my research. Data for the book came from reports of the federal monitor, university publications and submissions to oversight agencies, state investigative reports, and lawsuits by whistleblowers and other disgruntled employees. I also relied on an impressive record of events produced by a number of investigative reporters working for local newspapers.

In addition, in order to get information about day to day life within the university, for example, on hiring decisions, relations among schools and campuses, and relations between faculty and administrators, I conducted interviews with past and current employees of UMDNJ and others knowledgeable about its workings. The difficulty in getting subjects to interview and their resistance to talking to me was frustrating. But, as I came to understand more about the nature of UMDNJ, I saw how those refusals were linked to the internal organization of the university, where sharing information was discouraged and faculty complaints were met with punishment.

Another way in which corruption emerged was through the university’s dependence on the state for the largest part of its budget, for approval of new programs and new hires, and for appointment of a board of trustees that would oversee its governance. That dependence encouraged the university administration to forge ties with individual politicians and motivated those politicians, in turn, to seek university jobs and related benefits for themselves, their relatives, and constituents. The most egregious case of this kind of political cronyism was demonstrated when one school dean hired the chair of a legislative budget committee to carry out nominal duties but primarily to ensure that state funds were directed to his school.

Opportunities for corruption also emerged as a result of the university’s embeddedness in the state, regulatory agencies, service providers, and the local communities in which its campuses were located. Although embeddedness in social networks normally serves to foster trust and discourage misconduct, at UMDNJ many kinds of embedded relationship had the opposite effect. Negative effects followed when relations were controlled by those with the discretionary ability to allow unfair access to benefits. For example, when administrators could offer contracts that avoided state requirements on letting bids, the relations they built with service providers encouraged reciprocity.

UMDNJ was formally dissolved by the NJ legislature, with its schools in Newark and New Brunswick going to Rutgers University and the remainder to Rowan University. Its break up was not directly the result of its corruption but that corruption did make it vulnerable to other political agendas. But the lessons to be learned from UMDNJ’s experiences remain.

Many other large universities are organized in similar ways and all have had to contend with major changes in relations with the state and in the biomedical sciences and with increased demands for accountability. Those with their own teaching hospitals face serious financial crises and some have adopted the same fraudulent billing practices that undermined UMDNJ. Among the things to be learned is the need for transparency in every part of the university. Faculty must be given a voice in how the university sets its goals and in how it is administered. UMDNJ avoided this by abolishing its faculty senate. UMDNJ demonstrated how much a diverse and physically dispersed university needs ways to build a community of colleagues with shared objectives.