Once again, for those new to this blog site, at present there are 36 posts on the blog and each has its own set of comments. To read the comments you have to hit the word "Comments" at the beginning or end of the post. Somewhat confusing is that when you bring up the comments for a specific post it eliminates the other posts from the screen. To bring the other posts back up simply go back to the top of the page and click on Blog. Feel free to comment should you wish. No email address is required to make a comment so anonymity is strong. Due to some previous abuse of this right to anonymously comment, I have had to include an approval option, but I try to approve within 24 hours. Finally, to understand the development of the blog it is best to read it from the bottom post (Dr. Paul Kearney Case) up. One point of note here, to read the earliest posts you have to click on the word "<<Previous" at the very bottom of the posts available.
Once again, thanks to Mi Amigo for supplying this Blog Post.
- So just to give everyone a last taste of these depositions, we will begin with where we left off last Blog Post. To refresh your memory, Dr. Zwischenberger and Dr. De Beer were being questioned about the infamous Practice Plan Committee that Mr. Thro told the Faculty Council that, “it was none of their business”. This of course was something that we saw Dr. De Beer in his deposition fully agree with Mr. Thro on. When a University General Council and a senior administrator tells a Faculty Council that discussions about a committee that was involved in defining physician and administrator salaries is “off limits”, what in the world do they expect people to interpret this to mean. With Dr. Kearney’s Whistleblower and retaliation lawsuit being predicated in part on his questioning money management practices of KMSF, it stands to reason that Dr. Kearney’s lawyer would focus some attention on both of these KMSF-based Practice Plan and Faculty Compensation Committees. Once again I start out with Dr. Zwishenberger’s minimized testimony and finish with Dr. De Beer’s eulogy.
Dr. Zwischenberger’s Deposition:
Q What is the Faculty Compensation Committee?
A I don't know the or -- where they fit in the org chart.
Q No, what is it?
A I don't know.
Q Is it a committee of the Kentucky Medical Services Foundation?
A I'm not sure.
Q Is it a faculty committee at the University of Kentucky College of Medicine?
A I'm not sure. I don't know.
Q Did you participate in this discussion with respect to the Practice Plan Committee?
A I was there.
Q I know that. That's not my question. Did you participate in the discussion?
A I don't recall.
Q So as I understand it, as the -- as chair of the Department of Surgery, you don't know what the Faculty Compensation Committee is; correct?
A I know what it is. I don't know who they -- who they report to.
Q I didn't ask you that. What is it then?
A It's a committee that's to make recommendations regarding the faculty compensation.
Q Is it a committee of the Kentucky Medical Services Foundation?
A I don't recall.
Q Do you know who's on the committee?
A I do not.
Q Do you know anybody who ever served on the committee during your time as chair of the Department of Surgery?
A We had a department advisory committee and we had -- and I -- and I'm not sure if you're referring to that or the big faculty compensation committee. I'm confused by the different --
Q Well, we're discussing the Executive Committee minutes of October 1st, 2013 of Kentucky Medical Services Foundation, are we not?
A Yes.
Q And it references the Faculty Compensation Committee; do those minutes not reflect that?
A Yes.
Q And I'm asking you about what committee that is; correct?
A Yes.
Q And you've told me it's a compensation committee, just as the title states; correct?
A Yes.
Q My question then is, do you know who served on that committee during your – anyone during your entire tenure as chair of the Department of Surgery?
A I don't recall.
Q If you were to identify the members of the Faculty Compensation Committee, where would you begin to learn their identity?
A I would start with KMSF.
Q Is it a committee of KMSF?
A I don't recall.
Q Does the Faculty Compensation Committee issue reports?
A I don't know.
Q Are you a member of the Compensation Committee as the chair of the Department of Surgery?
A No.
Q Is Dr. Moliterno a member of the Faculty Compensation Committee?
A I don't know.
Q Does the Faculty Compensation Committee keep minutes?
A I don't know.
Q If you'll look at the last sentence on those minutes, it's referring to the Practice Plan Committee, is it not?
A Yes.
Q And would read the last sentence into the record, please?
A "Minutes are not required."
Q I take it from the minutes of the KMSF, that they've directed that the Practice Plan Committee not keep minutes if, in fact, it does meet; correct?
A As I read these minutes, the minutes refer to the Practice Plan Committee.
Q And as you read -- would you read the sentence just immediately prior to that last sentence?
A "The KMSF Executive Committee would not have an active role."
Q But the KMSF six elected board members are to comprise the Practice Plan Committee as of October 1st, 2013; correct?
A Say that again.
Q If you'll direct your attention to the minutes, Dr. Marc Randall is saying that he will meet with the six elected members of the KMSF -- six elected KMSF Board members; correct?
A Yes.
Q And then he'll advise them that they have the responsibility to form the Practice Plan Committee; correct?
A Yes.
Q So he's taking it on his shoulders to inform the six elected KMSF Board members to form the Practice Plan Committee, and he's doing this on October 1st, 2013; correct?
A Yes.
Q Then it goes on to say that KMSF Executive Committee would not have an active role; correct?
A That's what it says.
Q Do you find those statements to be contradictory?
A I don't see that.
Q Are there other people on the Practice Plan Committee other than the six elected KMSF Board members?
A I don't know.
Q Do you interact in any way with the Practice Plan Committee as of the present time?
A No.
Q Did you in the past?
A I don't recall.
Q If, in fact, you had interacted with the Practice Plan Committee in the past in your capacity as chair of the Department of Surgery, there would be no minutes of those meetings; am I correct?
A I have no minutes.
Q No, not whether you have any minutes, the Committee would have no minutes; correct?
A I don't know.
Q Well, your Executive Committee said that they didn't have to keep minutes, didn't it?
A That's what we've just read in the minutes.
Q So you would agree with me, would you not?
A I agree with you that's on the – on the Executive Committee meeting minutes.
Dr. De Beer's Deposition:
- Here is Dr. Fred De Beer’s take on the Practice Plan Committee. Talk about dancing! Fred basically took Zwisch’s approach but in a much more rhetorical manner. It actually gets comical. How many ways in twenty sentences or less can you say “I know nothing”, or perhaps more like, “I’m not touching that hot potato”.
Q What is your understanding of the Practice Plan Committee?
A Well, it goes back to the discussion that we had on KMSF and its foundation and its evolution. The Practice Plan Committee is defined as an addendum to the College of Medicine Practice Plan. There's two practice plans, the College of Medicine Practice Plan and Departmental Practice Plan. And in the addendum to the College of Medicine Practice Plan, this committee was established.
Q And there's a date June of 2009; is that correct?
A Well, I don't know, but it sounds about right.
Q Well, if you'll look at the minutes, does that trigger your memory in any regard with respect to the creation of the Practice Plan?
A I was not dean at that time. Jay Perman was dean, and I think it's -- I think it's right.
Q And the members -- the information concerning the Practice Plan Committee, is that maintained in the dean's offices?
A It would be.
Q And who would -- I take it you don't have hands-on on that information; correct?
A Well, the Practice Plan Committee in the time I was dean up to this time, you know, I was really unaware of their existence. They were the elected members of the KMSF Board, but it's one of these committees in the University that becomes defunct because its purpose changes. You know, where initially this Practice Plan Committee had significant value when physicians could earn their own income. That was lost when physician earnings couldn't even remotely compensate for their income. You know, currently physician income benefits and all other payments amounts to about 190 million a year. 51 million of that comes from UK Healthcare. So the physician ability to earn through fee for services billing is usually short of the income that needs to be paid to physicians to achieve market value -- market compatibility and the recruitment of high-quality physicians.
I think that as such, the Practice Plan Committee and the practice plans became less relevant in the sense that if 51 million of your salary support comes from a single source, you know, that is where the focus is, rather than on how you distribute what you have. And I think in the big scheme of things, it was -- it was this interfacing with UK Healthcare, which was exceedingly positive in causing the growth and development, but also became the financial reality.
And it's not only UK Healthcare. It's everywhere. I mean, the physicians billing for their own services and making a living off that is becoming rarer. There's a huge surge in employing physicians at hospitals, so this committee became, you know, I would say somewhat of a dinosaur.
I think the implication – the suspicion always was, oh, this committee would get us more money out of KMSF. The recognition was never there that whatever KMSF generated couldn't possibly pay physician salaries. Physician salaries, as I said, 51 million out of 190 million, I don't know what it was over the years, comes from UK Healthcare. So the emphasis is in practice in harmony with UK Healthcare as an integral and not practice for yourself. That's the principle.
So this committee, I was even unaware of its existence, and since it was rediscovered and was formulated, I've never -- it's an advisory committee to the dean, which I take it that they can advise me if they want to, or I can ask them for advice if I need to. I never asked them for advice, I don't believe. I asked Emery Wilson whether -- he asked me and wasn't aware of the existence either during the year that he was interim dean, and they never offered any advice to me. So I think it's a committee that really was created at the time when the whole financial paradigm was very different than what it is today.
Today KMSF and physicians' compensations cannot sustain itself even for a very short period of time.
Q So at the time that you were dean right up until the date of this meeting, you were unaware of the existence of the Practice Plan Committee; is that correct?
A No, that -- yes, I was aware of it sometime by Cliff Iler, and they told me that this committee is something that people are interested in. I looked at the addendum and noted the committee. There are many committees at the University that become defunct with time. It's an organism that tends to do that --
Q So --
A -- so it didn't surprise me that there was such a committee.
Q -- to cut through the response, what you're saying is that prior to this April 15, 2014 meeting, you were unaware of the existence of the Practice Plan Committee, correct, until Cliff Iler informed you of its existence; is that a correct statement?
A I was not -- this committee was not prominent in my mind, i.e., I'm sure I've heard of it before somewhere. It was not something that I integrated into my management of the financial affairs of the college in the sense that it was, you know -- as shown with time could not contribute significantly in that -- that the practice plans in its relevance to physician compensation has changed as the hospital, UK Healthcare, provides a huge support for physician compensation. That had became the new interface. An interfacing with UK Healthcare to gain that support is integrally more important than distributing resources that are totally inadequate to pay physicians.
Q I didn't ask you about the viability of the Practice Plan Committee. I asked you about the existence of the Practice Plan Committee, did I not?
A It was not prominent in my mind.
Q All right. In fact, you weren't even aware of it; isn't that correct?
A I didn't think of it, and I might have been vaguely aware of it, but it didn't feature in any decisions I made or needed to feature, because it's an advisory committee. It's an advisory committee. It needs to proffer me advice. If it's felt that it needs to proffer me advice, it could proffer me advice. If I needed to seek advice, I would have probably gone to them. I would have asked where I can seek such advice. But such advice is no longer relevant in the sense that the financial paradigm has changed, so it is an unimportant committee, and it so remains in my view a completely unimportant committee.
Q You mentioned the financial paradigm on several occasions, but that's not my question.
My question is, and I'll make it even clearer, from the time you became dean until
April 15th, 2014, the Practice Plan Committee never ever sought your advice; is that correct?
A I never sought their advice and they never proffered advice to me.
Q And did the Practice Plan Committee from the time you became dean either in 2010 or
2011 to 2014 even exist or function
A It existed in that it was according to addendum the members of the KMSF Board. I do not believe it functioned.
Q Thank you. And --
A Because it had no function.
Q All right. Thank you. And --
A And since it was resurrected, it also didn't function, because it had no function, or has no function.
Q And you are aware that as of the date of this meeting, you were informed by Dr. Karpf to supply to the members of the faculty council the names of the individuals who comprised the Practice Plan Committee; isn't that correct?
A The Practice Plan Committee -- I've -- I can't recall the detail of that.
Q Well, if you will, take a moment and just look, and it's the third line up, and you'll see it begins, "Karpf agreed," and if you'll just read that sentence into the record.
A "Karpf agreed to send information regarding the identify of the faculty members of the Practice Plan."
Q Thank you. The Practice Plan Committee information was at that time maintained in the dean's office, was it not?
A It was the members of the KMSF Board that was elected by the faculty that constituted the members of the Practice Plan Committee.
Q My question is, was the information concerning those members' identity maintained in the dean's office?
A No, it was not to my knowledge, because it was a committee that was not functioning, not advising or being sought advice from, and as such, it existed as the members of the KMSF Board elected by the faculty. So there's no -- the dean's office doesn't maintain any list of such faculty that happens -- as far as I know -- that happens to be on the elected members of the KMSF Board. That is a KMSF responsibility.
Q So as dean, as of 2000 -- April of 2014, what you've made clear is that the Practice
Plan Committee was, in fact, defunct; correct?
A That advisory committee, only advisory to the dean, even before I became dean, I believe, was defunct due to the huge paradigm change in the financial remuneration that affects physicians' salaries.
- Although this is not directly in line with the above Zwisch deposition questioning, it does touch on the issues of potential KMSF misuse of hospital funds, and again arguably public university funds. This is from Dr. Fred De Beer’s deposition. These questions examine Fred’s perspectives on his use of the millions of dollars available in the Dean’s Enrichment fund. As you will see, Fred is much more conversational in these matters than Zwisch was. I think you can almost feel the arrogance and self-righteousness.
Q Now, if we may, the Dean's Enrichment Fund, what is it and what purposes does it serve?
A The Dean's Enrichment Fund is an 8 percent overage in KMSF that is used to fund a huge variety of ventures that --
Q Before we go into all of the ventures, to save some time, are there -- is there any documentation that explains what the Dean's Enrichment Fund is, and what those funds are to be used for?
A Yes.
Q And what is that documentation?
A It is at the discretion of the dean.
Q We're a little bit ahead of ourselves, but as I understand it, the money for the Dean's Enrichment Fund comes from Kentucky Medical Services Foundation; am I correct?
A Yes.
Q And likewise, the Dean's Enrichment Fund also paid for Dr. Karpf's membership or box at Keeneland?
A I presume that it did, and I think that -- that it's absolutely appropriate because it's easy to take these things like Iroquois Hunt Club and a box at Keeneland as if these are egregious luxuries. They are essential components that elevated UK Healthcare, through Mike Karpf personally, from an entity that was not really respected even in the State to the most -- one of the most respected and largest healthcare delivery systems. It's Mike's engagement with those that have the means and have the influence to shape healthcare and its future. And that engagement occurs in certain venues. It does not occur, as I said, at Burger King.
Q Well, you said Billy's Barbecue where lawyers would go?
A That -- that probably was a good choice for lawyers.
Q All right. Now, let's just take that one step further. Why didn't Dr. Karpf pay for his own box?
A I think there are all sorts of financial issues that if you -- exactly why KMSF was created in the beginning, to generate income for physicians, to advance physician practice, and outside the University, it can spend outside the State financial statutes, and that's what it makes essential to have in an effective business. For instance, if you -- if Good Samaritan Hospital, buying it was bought by KMSF. Why, because KMSF could act instantly and quickly. It is nimble. If you had to buy Good Samaritan Hospital though the State system, it would have taken us an incredibly long time, and we wouldn't be able to buy Good Samaritan. Buying Good Samaritan at that critical time was central to UK Healthcare's development. So it offers the outside-the-state restrictions the ability to engage in effective business transactions.
Q And likewise in those business transactions, if KMSF is conducting those business transactions, it doesn't have to go by state procurement laws; isn't that true?
A No.
Q Oh, it does?
A No, it doesn't have to go by them, no.
Q All right. Thank you. So we're in agreement that it can get around state procurement laws because –
A I disagree with your language, get around. It is not subjective. Get around has the implication of something devious, which I resent.
Q Well, let's -- let's take it off the devious platter. The business dealings of Kentucky
Medical Services Foundation don't have any Board of Trustees oversight; is that correct?
A That's correct.
Q And when I say Board of Trustees, for the record, I mean Board of Trustees of the University of Kentucky?
A Yes.
Q And likewise, someone at some point in time had to make the decision to use the Dean's Enrichment Fund for these expenditures that you've pointed out rather than the University of Kentucky money; correct?
A Whenever an expenditure would be -- not fit under the state procurement entities, whenever it was essential for advancing our business cause, from hunt clubs to planes to a box at Keeneland, that advances our cause as a physician practice, as an integrated practice and, yes, it was discussed with me and I approved it.
Q Well, so am I correct in stating that you're the one who made the ultimate decision to use your examples to spend the money on foxhounds at the Uni -- at Iroquois Hunt Club?
A You are totally inaccurate in the sense that -- in the sense you make a statement "Spend money on foxhounds." I've never spent a cent on a foxhound. The Iroquois Hunt Club was a club at which a social event was held, there's no foxhounds involved, and I did not spend money on foxhounds. So let's at least be accurate in the picture you're trying to paint.
Q Well, then let's be accurate with the picture you're trying to paint in terms of that expenditure to Iroquois Hunt Club, how did that did boost specifically UK Healthcare?
A If you look at who was present at that meeting, all of the chairs, all of the leaders, selected faculty, they're intermingling with eminent individuals in the -- in the City. I can give example. At that -- personal example. At that hunt club, I had a long conversation with Mr. Bill Sisson, and enormously facilitated interactions by having Central Baptist as a training facility for our institution. It created an ambiance of knowing each other. I knew Bill for a long time, but I haven't spoken to him in a long time. That allows me to meet Bill Sisson again. That's a personal example which usually advantaged me.
Q Let's take that personal example. He's the CEO of Central Baptist?
A In Lexington, yes.
Q And that's how far from the University of Kentucky, your office specifically? Say ten blocks at the most?
A I guess so.
Q And you can pick up the phone and call him, can you not, arrange an appointment and a luncheon with him at Billy's Barbecue?
A There is a reason why one has an ambiance to communicate to certain individuals.
It's a setting that is more appropriate, and that was the judgment why the Illinois -- the Iroquois Hunt Club, the building, that beautiful old building and stone on that little river is a good setting that creates an ambiance. It creates an ambiance of pride in chairs and others that contributed to the growth, and allows us to communicate with those that can facilitate in the future growth of UK Healthcare.
- Well that is about it for these depositions. There is a bunch of other stuff in them but much of it is personal data, questioning of the materials being supplied by Dr. Zwischenberger in Dr. Kearney’s file, Dr. De Beer’s involvement in the sanctioning of Dr. Kearney, and Mr. Thro's and Mr. Iler’s role in this whole process. I think what I have supplied here gives a good feel for what transpired. Basically, although both had some prior rehearsal with the lawyer hired by the university to handle this, Dr. Zwischenberger chose to play the bad memory card while Dr. De Beer chose to play the pompous/self-righteous card. I can’t even guess how much all of this is costing the University. I wonder if it is coming out of the Dean’s Enrichment Fund?
Once again, thanks to Mi Amigo for supplying this Blog Post.
- So just to give everyone a last taste of these depositions, we will begin with where we left off last Blog Post. To refresh your memory, Dr. Zwischenberger and Dr. De Beer were being questioned about the infamous Practice Plan Committee that Mr. Thro told the Faculty Council that, “it was none of their business”. This of course was something that we saw Dr. De Beer in his deposition fully agree with Mr. Thro on. When a University General Council and a senior administrator tells a Faculty Council that discussions about a committee that was involved in defining physician and administrator salaries is “off limits”, what in the world do they expect people to interpret this to mean. With Dr. Kearney’s Whistleblower and retaliation lawsuit being predicated in part on his questioning money management practices of KMSF, it stands to reason that Dr. Kearney’s lawyer would focus some attention on both of these KMSF-based Practice Plan and Faculty Compensation Committees. Once again I start out with Dr. Zwishenberger’s minimized testimony and finish with Dr. De Beer’s eulogy.
Dr. Zwischenberger’s Deposition:
Q What is the Faculty Compensation Committee?
A I don't know the or -- where they fit in the org chart.
Q No, what is it?
A I don't know.
Q Is it a committee of the Kentucky Medical Services Foundation?
A I'm not sure.
Q Is it a faculty committee at the University of Kentucky College of Medicine?
A I'm not sure. I don't know.
Q Did you participate in this discussion with respect to the Practice Plan Committee?
A I was there.
Q I know that. That's not my question. Did you participate in the discussion?
A I don't recall.
Q So as I understand it, as the -- as chair of the Department of Surgery, you don't know what the Faculty Compensation Committee is; correct?
A I know what it is. I don't know who they -- who they report to.
Q I didn't ask you that. What is it then?
A It's a committee that's to make recommendations regarding the faculty compensation.
Q Is it a committee of the Kentucky Medical Services Foundation?
A I don't recall.
Q Do you know who's on the committee?
A I do not.
Q Do you know anybody who ever served on the committee during your time as chair of the Department of Surgery?
A We had a department advisory committee and we had -- and I -- and I'm not sure if you're referring to that or the big faculty compensation committee. I'm confused by the different --
Q Well, we're discussing the Executive Committee minutes of October 1st, 2013 of Kentucky Medical Services Foundation, are we not?
A Yes.
Q And it references the Faculty Compensation Committee; do those minutes not reflect that?
A Yes.
Q And I'm asking you about what committee that is; correct?
A Yes.
Q And you've told me it's a compensation committee, just as the title states; correct?
A Yes.
Q My question then is, do you know who served on that committee during your – anyone during your entire tenure as chair of the Department of Surgery?
A I don't recall.
Q If you were to identify the members of the Faculty Compensation Committee, where would you begin to learn their identity?
A I would start with KMSF.
Q Is it a committee of KMSF?
A I don't recall.
Q Does the Faculty Compensation Committee issue reports?
A I don't know.
Q Are you a member of the Compensation Committee as the chair of the Department of Surgery?
A No.
Q Is Dr. Moliterno a member of the Faculty Compensation Committee?
A I don't know.
Q Does the Faculty Compensation Committee keep minutes?
A I don't know.
Q If you'll look at the last sentence on those minutes, it's referring to the Practice Plan Committee, is it not?
A Yes.
Q And would read the last sentence into the record, please?
A "Minutes are not required."
Q I take it from the minutes of the KMSF, that they've directed that the Practice Plan Committee not keep minutes if, in fact, it does meet; correct?
A As I read these minutes, the minutes refer to the Practice Plan Committee.
Q And as you read -- would you read the sentence just immediately prior to that last sentence?
A "The KMSF Executive Committee would not have an active role."
Q But the KMSF six elected board members are to comprise the Practice Plan Committee as of October 1st, 2013; correct?
A Say that again.
Q If you'll direct your attention to the minutes, Dr. Marc Randall is saying that he will meet with the six elected members of the KMSF -- six elected KMSF Board members; correct?
A Yes.
Q And then he'll advise them that they have the responsibility to form the Practice Plan Committee; correct?
A Yes.
Q So he's taking it on his shoulders to inform the six elected KMSF Board members to form the Practice Plan Committee, and he's doing this on October 1st, 2013; correct?
A Yes.
Q Then it goes on to say that KMSF Executive Committee would not have an active role; correct?
A That's what it says.
Q Do you find those statements to be contradictory?
A I don't see that.
Q Are there other people on the Practice Plan Committee other than the six elected KMSF Board members?
A I don't know.
Q Do you interact in any way with the Practice Plan Committee as of the present time?
A No.
Q Did you in the past?
A I don't recall.
Q If, in fact, you had interacted with the Practice Plan Committee in the past in your capacity as chair of the Department of Surgery, there would be no minutes of those meetings; am I correct?
A I have no minutes.
Q No, not whether you have any minutes, the Committee would have no minutes; correct?
A I don't know.
Q Well, your Executive Committee said that they didn't have to keep minutes, didn't it?
A That's what we've just read in the minutes.
Q So you would agree with me, would you not?
A I agree with you that's on the – on the Executive Committee meeting minutes.
Dr. De Beer's Deposition:
- Here is Dr. Fred De Beer’s take on the Practice Plan Committee. Talk about dancing! Fred basically took Zwisch’s approach but in a much more rhetorical manner. It actually gets comical. How many ways in twenty sentences or less can you say “I know nothing”, or perhaps more like, “I’m not touching that hot potato”.
Q What is your understanding of the Practice Plan Committee?
A Well, it goes back to the discussion that we had on KMSF and its foundation and its evolution. The Practice Plan Committee is defined as an addendum to the College of Medicine Practice Plan. There's two practice plans, the College of Medicine Practice Plan and Departmental Practice Plan. And in the addendum to the College of Medicine Practice Plan, this committee was established.
Q And there's a date June of 2009; is that correct?
A Well, I don't know, but it sounds about right.
Q Well, if you'll look at the minutes, does that trigger your memory in any regard with respect to the creation of the Practice Plan?
A I was not dean at that time. Jay Perman was dean, and I think it's -- I think it's right.
Q And the members -- the information concerning the Practice Plan Committee, is that maintained in the dean's offices?
A It would be.
Q And who would -- I take it you don't have hands-on on that information; correct?
A Well, the Practice Plan Committee in the time I was dean up to this time, you know, I was really unaware of their existence. They were the elected members of the KMSF Board, but it's one of these committees in the University that becomes defunct because its purpose changes. You know, where initially this Practice Plan Committee had significant value when physicians could earn their own income. That was lost when physician earnings couldn't even remotely compensate for their income. You know, currently physician income benefits and all other payments amounts to about 190 million a year. 51 million of that comes from UK Healthcare. So the physician ability to earn through fee for services billing is usually short of the income that needs to be paid to physicians to achieve market value -- market compatibility and the recruitment of high-quality physicians.
I think that as such, the Practice Plan Committee and the practice plans became less relevant in the sense that if 51 million of your salary support comes from a single source, you know, that is where the focus is, rather than on how you distribute what you have. And I think in the big scheme of things, it was -- it was this interfacing with UK Healthcare, which was exceedingly positive in causing the growth and development, but also became the financial reality.
And it's not only UK Healthcare. It's everywhere. I mean, the physicians billing for their own services and making a living off that is becoming rarer. There's a huge surge in employing physicians at hospitals, so this committee became, you know, I would say somewhat of a dinosaur.
I think the implication – the suspicion always was, oh, this committee would get us more money out of KMSF. The recognition was never there that whatever KMSF generated couldn't possibly pay physician salaries. Physician salaries, as I said, 51 million out of 190 million, I don't know what it was over the years, comes from UK Healthcare. So the emphasis is in practice in harmony with UK Healthcare as an integral and not practice for yourself. That's the principle.
So this committee, I was even unaware of its existence, and since it was rediscovered and was formulated, I've never -- it's an advisory committee to the dean, which I take it that they can advise me if they want to, or I can ask them for advice if I need to. I never asked them for advice, I don't believe. I asked Emery Wilson whether -- he asked me and wasn't aware of the existence either during the year that he was interim dean, and they never offered any advice to me. So I think it's a committee that really was created at the time when the whole financial paradigm was very different than what it is today.
Today KMSF and physicians' compensations cannot sustain itself even for a very short period of time.
Q So at the time that you were dean right up until the date of this meeting, you were unaware of the existence of the Practice Plan Committee; is that correct?
A No, that -- yes, I was aware of it sometime by Cliff Iler, and they told me that this committee is something that people are interested in. I looked at the addendum and noted the committee. There are many committees at the University that become defunct with time. It's an organism that tends to do that --
Q So --
A -- so it didn't surprise me that there was such a committee.
Q -- to cut through the response, what you're saying is that prior to this April 15, 2014 meeting, you were unaware of the existence of the Practice Plan Committee, correct, until Cliff Iler informed you of its existence; is that a correct statement?
A I was not -- this committee was not prominent in my mind, i.e., I'm sure I've heard of it before somewhere. It was not something that I integrated into my management of the financial affairs of the college in the sense that it was, you know -- as shown with time could not contribute significantly in that -- that the practice plans in its relevance to physician compensation has changed as the hospital, UK Healthcare, provides a huge support for physician compensation. That had became the new interface. An interfacing with UK Healthcare to gain that support is integrally more important than distributing resources that are totally inadequate to pay physicians.
Q I didn't ask you about the viability of the Practice Plan Committee. I asked you about the existence of the Practice Plan Committee, did I not?
A It was not prominent in my mind.
Q All right. In fact, you weren't even aware of it; isn't that correct?
A I didn't think of it, and I might have been vaguely aware of it, but it didn't feature in any decisions I made or needed to feature, because it's an advisory committee. It's an advisory committee. It needs to proffer me advice. If it's felt that it needs to proffer me advice, it could proffer me advice. If I needed to seek advice, I would have probably gone to them. I would have asked where I can seek such advice. But such advice is no longer relevant in the sense that the financial paradigm has changed, so it is an unimportant committee, and it so remains in my view a completely unimportant committee.
Q You mentioned the financial paradigm on several occasions, but that's not my question.
My question is, and I'll make it even clearer, from the time you became dean until
April 15th, 2014, the Practice Plan Committee never ever sought your advice; is that correct?
A I never sought their advice and they never proffered advice to me.
Q And did the Practice Plan Committee from the time you became dean either in 2010 or
2011 to 2014 even exist or function
A It existed in that it was according to addendum the members of the KMSF Board. I do not believe it functioned.
Q Thank you. And --
A Because it had no function.
Q All right. Thank you. And --
A And since it was resurrected, it also didn't function, because it had no function, or has no function.
Q And you are aware that as of the date of this meeting, you were informed by Dr. Karpf to supply to the members of the faculty council the names of the individuals who comprised the Practice Plan Committee; isn't that correct?
A The Practice Plan Committee -- I've -- I can't recall the detail of that.
Q Well, if you will, take a moment and just look, and it's the third line up, and you'll see it begins, "Karpf agreed," and if you'll just read that sentence into the record.
A "Karpf agreed to send information regarding the identify of the faculty members of the Practice Plan."
Q Thank you. The Practice Plan Committee information was at that time maintained in the dean's office, was it not?
A It was the members of the KMSF Board that was elected by the faculty that constituted the members of the Practice Plan Committee.
Q My question is, was the information concerning those members' identity maintained in the dean's office?
A No, it was not to my knowledge, because it was a committee that was not functioning, not advising or being sought advice from, and as such, it existed as the members of the KMSF Board elected by the faculty. So there's no -- the dean's office doesn't maintain any list of such faculty that happens -- as far as I know -- that happens to be on the elected members of the KMSF Board. That is a KMSF responsibility.
Q So as dean, as of 2000 -- April of 2014, what you've made clear is that the Practice
Plan Committee was, in fact, defunct; correct?
A That advisory committee, only advisory to the dean, even before I became dean, I believe, was defunct due to the huge paradigm change in the financial remuneration that affects physicians' salaries.
- Although this is not directly in line with the above Zwisch deposition questioning, it does touch on the issues of potential KMSF misuse of hospital funds, and again arguably public university funds. This is from Dr. Fred De Beer’s deposition. These questions examine Fred’s perspectives on his use of the millions of dollars available in the Dean’s Enrichment fund. As you will see, Fred is much more conversational in these matters than Zwisch was. I think you can almost feel the arrogance and self-righteousness.
Q Now, if we may, the Dean's Enrichment Fund, what is it and what purposes does it serve?
A The Dean's Enrichment Fund is an 8 percent overage in KMSF that is used to fund a huge variety of ventures that --
Q Before we go into all of the ventures, to save some time, are there -- is there any documentation that explains what the Dean's Enrichment Fund is, and what those funds are to be used for?
A Yes.
Q And what is that documentation?
A It is at the discretion of the dean.
Q We're a little bit ahead of ourselves, but as I understand it, the money for the Dean's Enrichment Fund comes from Kentucky Medical Services Foundation; am I correct?
A Yes.
Q And likewise, the Dean's Enrichment Fund also paid for Dr. Karpf's membership or box at Keeneland?
A I presume that it did, and I think that -- that it's absolutely appropriate because it's easy to take these things like Iroquois Hunt Club and a box at Keeneland as if these are egregious luxuries. They are essential components that elevated UK Healthcare, through Mike Karpf personally, from an entity that was not really respected even in the State to the most -- one of the most respected and largest healthcare delivery systems. It's Mike's engagement with those that have the means and have the influence to shape healthcare and its future. And that engagement occurs in certain venues. It does not occur, as I said, at Burger King.
Q Well, you said Billy's Barbecue where lawyers would go?
A That -- that probably was a good choice for lawyers.
Q All right. Now, let's just take that one step further. Why didn't Dr. Karpf pay for his own box?
A I think there are all sorts of financial issues that if you -- exactly why KMSF was created in the beginning, to generate income for physicians, to advance physician practice, and outside the University, it can spend outside the State financial statutes, and that's what it makes essential to have in an effective business. For instance, if you -- if Good Samaritan Hospital, buying it was bought by KMSF. Why, because KMSF could act instantly and quickly. It is nimble. If you had to buy Good Samaritan Hospital though the State system, it would have taken us an incredibly long time, and we wouldn't be able to buy Good Samaritan. Buying Good Samaritan at that critical time was central to UK Healthcare's development. So it offers the outside-the-state restrictions the ability to engage in effective business transactions.
Q And likewise in those business transactions, if KMSF is conducting those business transactions, it doesn't have to go by state procurement laws; isn't that true?
A No.
Q Oh, it does?
A No, it doesn't have to go by them, no.
Q All right. Thank you. So we're in agreement that it can get around state procurement laws because –
A I disagree with your language, get around. It is not subjective. Get around has the implication of something devious, which I resent.
Q Well, let's -- let's take it off the devious platter. The business dealings of Kentucky
Medical Services Foundation don't have any Board of Trustees oversight; is that correct?
A That's correct.
Q And when I say Board of Trustees, for the record, I mean Board of Trustees of the University of Kentucky?
A Yes.
Q And likewise, someone at some point in time had to make the decision to use the Dean's Enrichment Fund for these expenditures that you've pointed out rather than the University of Kentucky money; correct?
A Whenever an expenditure would be -- not fit under the state procurement entities, whenever it was essential for advancing our business cause, from hunt clubs to planes to a box at Keeneland, that advances our cause as a physician practice, as an integrated practice and, yes, it was discussed with me and I approved it.
Q Well, so am I correct in stating that you're the one who made the ultimate decision to use your examples to spend the money on foxhounds at the Uni -- at Iroquois Hunt Club?
A You are totally inaccurate in the sense that -- in the sense you make a statement "Spend money on foxhounds." I've never spent a cent on a foxhound. The Iroquois Hunt Club was a club at which a social event was held, there's no foxhounds involved, and I did not spend money on foxhounds. So let's at least be accurate in the picture you're trying to paint.
Q Well, then let's be accurate with the picture you're trying to paint in terms of that expenditure to Iroquois Hunt Club, how did that did boost specifically UK Healthcare?
A If you look at who was present at that meeting, all of the chairs, all of the leaders, selected faculty, they're intermingling with eminent individuals in the -- in the City. I can give example. At that -- personal example. At that hunt club, I had a long conversation with Mr. Bill Sisson, and enormously facilitated interactions by having Central Baptist as a training facility for our institution. It created an ambiance of knowing each other. I knew Bill for a long time, but I haven't spoken to him in a long time. That allows me to meet Bill Sisson again. That's a personal example which usually advantaged me.
Q Let's take that personal example. He's the CEO of Central Baptist?
A In Lexington, yes.
Q And that's how far from the University of Kentucky, your office specifically? Say ten blocks at the most?
A I guess so.
Q And you can pick up the phone and call him, can you not, arrange an appointment and a luncheon with him at Billy's Barbecue?
A There is a reason why one has an ambiance to communicate to certain individuals.
It's a setting that is more appropriate, and that was the judgment why the Illinois -- the Iroquois Hunt Club, the building, that beautiful old building and stone on that little river is a good setting that creates an ambiance. It creates an ambiance of pride in chairs and others that contributed to the growth, and allows us to communicate with those that can facilitate in the future growth of UK Healthcare.
- Well that is about it for these depositions. There is a bunch of other stuff in them but much of it is personal data, questioning of the materials being supplied by Dr. Zwischenberger in Dr. Kearney’s file, Dr. De Beer’s involvement in the sanctioning of Dr. Kearney, and Mr. Thro's and Mr. Iler’s role in this whole process. I think what I have supplied here gives a good feel for what transpired. Basically, although both had some prior rehearsal with the lawyer hired by the university to handle this, Dr. Zwischenberger chose to play the bad memory card while Dr. De Beer chose to play the pompous/self-righteous card. I can’t even guess how much all of this is costing the University. I wonder if it is coming out of the Dean’s Enrichment Fund?