Another UNC ethics scandal

John Rhodes, a writer who lives in Efland, contributes this report:

While citizens of North Carolina and the rest of the nation go down an economic drain initially created by improper oversight in the real estate/finance market, there’s hope … at least for a few.

Former White House Chief of Staff Erskine Bowles is one such lucky chap. What did a giant within the struggling auto industry or a Wall Street finance house have to gain in having a businessman with Washington connections sit on their boards?

The same question should be asked as it relates to Dr. William Roper, CEO of UNC Hospitals.

What would Medco Health Solutions, the nation’s largest pharmacy benefits company of its kind, or DaVita Inc., one of the nation’s largest providers of kidney dialysis, have to gain from having one of the country’s most influential physician executives, who is fully armed with insight to regulatory issues as they relate to health care management, sit on their corporate boards?

Given that a stock’s value rises with profit, news of DaVita being sued for intentionally wasting medicines in order to reap hundreds of millions of dollars in unnecessary Medicare reimbursement while Roper served on its board is beyond disturbing (see “Lawsuit Says Drugs Were Wasted to Buoy Profit,” New York Times, 07/25/11). The suit alleges that DaVita packaged medicine in larger-than-necessary vials, knowing that Medicare would pay for unused portions.

Between 2004 and 2008, Roper, while serving on DaVita’s board, cashed in $2.7 million in DaVita stock, $1.3 million from 2005 alone. As these stock earnings were reported in a June 26, 2009, memorandum from John Lewis, CFO of UNC Health Care, to Richard Bostic, principal fiscal analyst of the North Carolina Assembly – copy of which was sent to Holden Thorp – this should be a major concern for UNC.

After the football thing, just how many scandals – this one national in scope – can one chancellor handle?

Beyond his income from the state – now in the range of at least $800,000 a year – is Roper using his board positions and insight to hospital management to increase the profit of others and himself at public expense?

If so, it would be an understatement to say there’s a bit of a conflict of interest here. As CEO of UNC Hospitals, Dr. Roper’s number one priority should be the physical and financial well-being of every patient, not that of profit from and for those in the corporate world.

And what if, beyond Medicare and the senior citizens who may have been administered these medications, DaVita products were provided to those receiving Medicaid benefits? The matter would be all that much more serious because of the increase in scale.

Although there seemed to have been no direct conflict of interest for Bowles and his board positions, when “the time was right,” he stepped down from a couple of board obligations and as president of UNC.

Should we consider ourselves lucky?

Bowles still has his connections in Washington, where, after having been one of the individuals who approved Roper for his position with Medco Health Solutions, he can continue influencing policy as it relates to the national budget … conflict of interest … health care reform …

How wide open to exploitation should any marketplace be to public officials, on any level, who, beyond the government positions they hold, use their knowledge to profit in the private sector at the expense of the very same public they claim to serve?

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  1. Fred Black

     /  August 4, 2011

    Nancy, there is a big difference between what should or might disturb us and what is an “ethics scandal.” Your words do not make the case for such.

  2. John Kramer

     /  August 4, 2011

    Another excellent article, thanks for providing it and keep up the good work!

  3. DOM

     /  August 4, 2011

    I disagree, Fred. What Dr.Roper did by accepting a position on DaVita’s board is assist them in gaming the system and that’s clearly unethical by any rational person’s standards.

  4. Fred Black

     /  August 4, 2011

    So those who gave the OK are not rational? Must be an inside conspiracy.

  5. Nancy Oates

     /  August 5, 2011

    In light of the football and honor court problems, UNC may be paying closer attention to the smell test of some of the things it ignored before. Perhaps that’s why Roper is leaving the Medco board now.

  6. tom field

     /  August 5, 2011

    I guess it is not officially a scandal until more people know about the issue or until it is proven in court, BUT if these allegations were true, than Roper’s ethical lapses go far, far beyond anything uncovered in the football scandal.

  7. Fred Black

     /  August 5, 2011

    Tom, if he had permission to do what he was doing then the forcus should be on the procedures and process that made that possible. According to this article, that is exactly what is being reviewed. Note also the speculation about continuing on the board:

  8. John Kramer

     /  August 5, 2011

    I agree with Tom. Why do some people blame lack of ethics on the absence of rules? I guess some people think we should have a rule for everything, it is the socialist way after all, who needs personal integrity and honor anyway??

  9. Fred Black

     /  August 5, 2011

    This is rich, coming from someone who lies about his identity and then lies about lying.

  10. John Kramer

     /  August 5, 2011

    Oh, Mr. Black. Can you post a list of all of the millions of dollars that I have profited by using a nome de plume? And if you would also kindly tell me where all those millions went, since I am feeling pretty broke right now?

    And I think calling me a liar is a bit over the top, but then I am not a Chapel Hill Liberal, either.

  11. Nancy Oates

     /  August 5, 2011

    Stop with the name-calling, you two.

    And a tip that works for me during those times of the day when I feel broke: log onto the county tax valuation page and see how much the tax assessor thinks your home is worth. You’ll feel wealthy instantly, as long as you don’t glance down to see how much property tax you’ll owe next month.

  12. Fred Black

     /  August 5, 2011

    Gee Nancy, just what is it you do? Kramer lies about things and then offers advice on ethics.Call it name calling if you want but I see your double standard again. I’ll stop bothering you.

  13. Jean Rodez

     /  August 5, 2011

    Sorry I’m coming into this so late. Though some of you may not agree with Fred, he’s entitled to his opinion.

    But I think I understand why he stands where he does, figuratively, and why it may not be as strong as the other positions expressed here.

    You there, Fred?

  14. John Kramer

     /  August 7, 2011

    Wow, Fred, so sad to see you go. Take good care of yourself.

    And you know, you really should be careful about calling people you have never met liars.

  15. Fred Black

     /  August 7, 2011

    Yes Mr. Kramer, you mentioned “personal integrity and honor ,” yet anyone can find where you lied on two occasions about this name thing. Of couse, who you are, who you want to be or who you aren’t matter not; lying about it is what matters and that’s what you did. What’s your definition of a liar?

  16. John Kramer

     /  August 7, 2011

    So angry, Mr. Black. I feel sorry for you.

  17. Jean Rodez

     /  August 8, 2011

    What happened to addressing the issue concerning relating to DaVita, Roper and Medicare?

    How about coming back to that issue. This is what the page was about.

    As I said, I believe Fred is entitled to his opinion, though I may not share it. But when we start assailing one another with sarcasm … the issue to be addressed disappears.

    Fred, what really makes you hold the position you take on the issue (the original posting, not personal attacks)?

  18. Jean Rodez

     /  August 8, 2011

    I wonder if DaVita is the only group Dr. Roper is affiliated with that might have ethical issues with as it relates to over billing Medicare?

    Chapel Hill News
    August 7, 2011

    Hospital arithmetic revisited

    On June 15, 2011, the Chapel Hill News published a guest column by me that reported what I considered an exorbitant charges by UNC Hospitals for an outpatient lung biopsy.

    The hospital portion of this charge, which did not include separately billed anesthesia charges of $2,045 or physicians charges of $5,063, was $19,215.59. The invoice showed a Medicare reimbursement/adjustment to the hospital of $18,345.81. No reimbursement was shown by the supplementary insurer.

    On June 16, the day after my column appeared, I had a telephone call from an officer of the hospital, who stated that there had been an error in the bill reported, and that a corrected bill would be sent to me. That corrected bill has now been received. It differs from the original invoice only in the substitution of charges of $2,040.59 for “Pharmacy/Supply” instead of charges of $7,194.59. Thus, the “corrected” invoice shows a total charge of $14,061.59, a Medicare reimbursement/adjustment this time of $13,191.81, and a supplementary insurance reimbursement to the hospital of $695.82.

    It is safe to say from these data that the hospital billing has substantial problems, albeit with errors in their favor, and I wonder how other bills I have from the hospital may be infected with error. It is uncertain as to what the hospital has received from Medicare – with a “reimbursement/adjustment” of $18,345.81 showing on the original statement, and with $13,191.81.on the “corrected” statement.

    Junius A. Davis

    Chapel Hill

  19. Terri Buckner

     /  August 8, 2011

    Billing for anything associated with UNC Healthcare is a nightmare. Not only are bills separated between physician care (UNC P&A) and hospital care, but neither group sends out an itemized bill that can be verified with treatment received. When you consider that m0st of the people receiving this bills are really sick and many are not well educated, it is a complete and utter travesty. The administrators of the system should all be ashamed of this state of affairs. And let’s not leave out the insurance company (State Employees/BCBS from my experience) that simply pay without ever asking the patient if they received the care they are being billed for.

    But I’m not sure what that has to do with Roper’s tenure on a pharmaceutical companies Board of Directors.

  20. Jean Rodez

     /  August 8, 2011

    I believe the very last sentence of the Davis letter raises the question of whether UNC Hospitals may be over charging and passing the costs on to patients and Medicare, just as DaVita is accused of doing in the lawsuit (via billing for larger volumes of medication than actually required).

    Think about it. Could the same, or similar, praces could be used at both organizations, which, to varying degrees, Roper leads and influences??

  21. Scott Maitland

     /  August 12, 2011

    What evidence do you have that Mr. Roper’s number one priority is not the hospital and its patients?
    When will someone say, “mmmmm…..we need to reform the Medicare system” and implement market based reforms that will keep costs down? (ie. don’t pay for oversized medicines)
    How is using knowledge learned from a lifetime of study to advance products on the private sector that will bring benefit to customers a bad thing?
    Why wouldn’t we want the best and the brightest to serve in leadership levels of both government and private sector?
    Since when does knowledge of the byzantine rules of government regulation amounts to insider trading?
    Since when does making a profit – assuming external costs are properly applied – result in a bad societal result?

  22. Jean Rodez

     /  August 12, 2011

    Per your comment, Scott, a lot of good it did to “reform Medicare” by allowing UNC’s Roper (government official) to sit on the board of DaVita and overcharge patients in packaging medicine in larger-than-necessary vials, knowing (“implement market based reforms”) that Medicare would pay for unused portions.

    But I suppose Dr. Roper wormed his way onto these boards by using the same sort of smooth talking rhetoric.