UCI Hires PR Firm on Medical Cost Issue

Times Staff Writers

With a gloom-and-doom press conference last week, UC Irvine’s new vice chancellor of health services opened an aggressive campaign to spotlight the financial hemorrhaging that threatens to close UCI Medical Center.

Dr. Walter Henry, who is also dean of the UCI College of Medicine, believes that too many people think of the medical center as an ordinary public hospital instead of a top-notch teaching and research facility.

For the record:

12:00 a.m. May 13, 1989 For the Record
Los Angeles Times Saturday May 13, 1989 Orange County Edition Metro Part 2 Page 2 Column 5 Metro Desk 1 inches; 26 words Type of Material: Correction
In a May 7 chart on UC medical center budgets, The Times incorrectly reported the number of beds at UC San Diego Medical Center. The hospital, which is located in Hillcrest, has 447 beds.

So, faced with a projected operating loss of $13 million this year, Henry reached beyond the medical center’s seven-member, $250,000-a-year public relations and marketing staff.


He got permission to go around normal university hiring rules and awarded a $20,000, 3-month contract to a Newport Beach consulting firm headed by a woman with whom he had previously worked. Saying the medical center’s crisis needed publicity and its image needed improvement, the consultant immediately announced a series of press conferences.

Burden Called ‘Unfair’

At the first of these last week, Henry said the medical center in Orange is suffering because federal, state and county governments inadequately finance insurance programs intended to provide hospitalization for the poor. The shortcomings, he said, have forced the 493-bed facility to play the role of a county hospital and shoulder an unfair burden. UCI has 6% of the hospital beds in Orange County but treats 50% of the poor. Apart from the financial strain that comes with treating indigents who cannot pay, UCI officials contend that the consequently heavy load of routine medical cases is undermining plans to develop the medical center into a major teaching hospital.

“We need to develop a consistent program that reflects the strength of the (UCI) College of Medicine as well as my plans for developing UCI Medical Center into a major academic hospital where research exists side by side with teaching,” Henry said before the press conference. “We need help to develop that concept in terms of our internal perception and to communicate that vision to the community.”

Henry warned that the medical center could go bankrupt and close within 2 years if it continues to be flooded with indigent patients. And his straightforward comments were applauded throughout much of the medical community.

“It may be a direct and discomforting approach to a lot of people,” said David Langness, vice president of communications for the Hospital Council of Southern California. “But the fact is, it is the truth.

“A record number of hospitals closed (in the nation) last year and Orange County is not immune to those problems. What it (Henry’s public statement) does is communicate the severity of the problem and in so doing brings about action.”


David Paine, a Costa Mesa public relations executive who has several health-care industry clients, also praised what he called Henry’s honesty. “When you talk about a potentially unpopular decision, sometimes it is better to be pro-active and explain why you are doing what you are doing,” he said.

‘Confronting the Crisis’

L. Wade Rose, assistant dean of community affairs and development at the UCI medical school, said: “What Walt is doing is confronting the crisis we have in medical reimbursement head-on. And he knows when he does that it will create a tremendous amount of concern among local, county and state governments as well as the general public.”

Advocates for the poor said the developments are worrisome.

“My concern is poor people are going to be dumped and where are they going to go?” said Jean Forbath, a founder of Share Our Selves, a service organization that runs a free clinic in Costa Mesa. “We feel this would be a tragic development.

“I can understand UCI’s position--they are really in the hole,” Forbath continued. “But there doesn’t seem to be any suggested alternative.”

Henry, a research cardiologist who took the vice chancellor’s post in March, went after professional help in delicately charting his public relations strategy. Days after he became vice chancellor and dean of the medical school, he hired a friend, Susan Meister, who has 25 years’ experience in medical communications.

Meister’s Newport Beach public relations firm, Communicore, is working under a 3-month consulting contract with the university. One of her jobs is to screen all calls from the press to Henry and to Mary A. Piccione, the medical center’s executive director.


Would Make Public Aware

But Meister says she was primarily hired to draft a game plan that will emphasize the teaching and research functions of the medical center as an arm of the UCI College of Medicine and make the public aware of how they may be affected by the crisis in indigent care.

“If UCI Medical Center closes down, there will be no academic medical center in Orange County,” Meister said. “Academic medical centers are depended on to take care of the most complicated medical problems.”

“UCI is a victim, it’s not a perpetrator” of the indigent-care crisis, she said.

Meister said the amount of money her two-partner firm will be paid for the consulting work will depend on how many hours of work are involved. But she said she expects that the contract, which began in March and ends June 30, will be worth about $20,000, a sum that she said was reasonable and far less than she would charge a private corporation.

Henry hired Meister’s firm without going through the university’s customary bidding process. Services expected to cost at least $15,000 must be bid, according to the policy, unless a candidate has expertise that cannot be duplicated.

Leon Schwartz, UCI’s vice chancellor for administrative and business services, said Henry persuaded him that Meister offered a unique combination of medical communications experience and knowledge of the university. “I thought it would be very appropriate to use her (services),” Schwartz said.

Meister acknowledged that her professional friendship with Henry helped her firm hurdle the bidding process because Henry had gained confidence in her communication skills and understanding of the medical industry. Also, she said, as with most medical public relations consultants, she has considerable experience in “crisis management.”


Variety of Positions

Before Meister established her own public relations business in 1985, she held a variety of health-care industry positions, including vice president for medical affairs for Allergan Pharmaceuticals in Irvine, director of communications for the Edwards Division of American Hospital Supply in Irvine and vice president of Burson-Marsteller Inc.’s former health-care division in Orange County.

Meister said she has known Henry since 1980, the year she joined Edwards, where Henry was a consultant on cardiovascular-imaging technology. Also, for the last 5 years she has served on the board of directors of Medical Research and Education Society, a volunteer support group that raises funds for younger researchers at the UCI College of Medicine. This year she was elected president of the organization.

Meister said UCI is only one of her firm’s 15 clients. She said she is working for Henry only on a temporary basis while he reorganizes the public relations operations of the medical school and hospital.

As part of that reorganization, Henry announced last week that he is seeking university authorization to create a new permanent position of assistant vice chancellor of health sciences in charge of public relations and fund raising for both the school and medical center. That person would report directly to him. He said Meister could be a candidate for the new position, although a hiring search would be conducted.

Seven employees, including two clerical workers, already are on the payroll of the medical center’s public affairs and marketing department. Salaries of the department, which handles news inquiries, special events and in-house publications, total $250,000 a year. A public information office on the UCI campus also has two employees who produce press releases on the College of Medicine’s research, fund-raising and other activities.

Neither UC San Diego nor UC Davis, which have hospitals comparable to UCI’s, employ a top administration-level spokesman who reports directly to the overseer of those medical schools and teaching hospitals. But neither school faces the medical center’s financial crisis.


The medical center’s financial position has severely eroded since fiscal 1986, when it posted a $772,000 operating gain as a result of cost cutting, officials said. Last year, the medical center posted a $8.6-million operating loss, and the operating loss this year is expected to reach $13 million.

Since taking office in March, Henry has been playing hardball with government officials, beginning with a threat to withdraw from the Medi-Cal program if reimbursement rates are not improved. The university is negotiating a new Medi-Cal contract. Medi-Cal is the state’s medical insurance for the indigent.

In an interview, Henry said medical center belt-tightening efforts, which in the past included cutting staff, have been more than offset as the hospital’s share of indigent patients has continued to expand and Medi-Cal reimbursements have fallen further behind costs.

“Now we are in a situation where we realize the major problem is the very large burden of indigent care we are having to assume, and that burden has gotten much worse,” he said.

The medical center reports receiving about 30 cents in reimbursement for every dollar spent to treat patients on Medi-Cal.

“We are simply trying to communicate the issues as strongly as possible,” Henry said. “We are trying to help the public understand the issues as we see them and the implications of various actions.”


Times staff writer Lanie Jones contributed to this article.


The following is a comparison of public affairs and marketing budgets for medical centers at UC Irvine, UC Davis and UC San Diego. Among the five UC hospitals, these three are most alike because all formerly were county hospitals, are major centers for the care of poor patients and are affiliated with a general campus.*

UCI UC Davis UC San Diego 1987-88 operating $157 $230 $165 budget (millions) Beds 493 467 347 Profit (Loss) in millions ($13.1) $4.7 $3.4 Public Affairs & $250,000** $233,000 $345,000 Marketing salaries

* UCI Medical Center is in Orange.

UC Davis Medical Center is in Sacramento.

UC San Diego Medical Center is in La Jolla.

UCLA is twice as large, has two hospitals and four health colleges and a lower percentage of indigents.

UC San Francisco is strictly a medical school with its own hospital.

** Does not include about $20,000 for Newport Beach public relations consultant.