University of Toledo officials say ProMedica has fallen behind on its required payments to its medical college as part of a seven-year affiliation agreement, but ProMedica counters that UT owes it money, not the other way around.
UT spokesman Meghan Cunningham said Monday that ProMedica missed its August and September payments to UT — but wouldn’t say how much those payments are — as part of a 50-year affiliation agreement in 2015 that calls for millions in annual payments from ProMedica. Beginning in 2020, that amount was set at $50 million.
“We will continue to seek resolution as outlined in the Academic Affiliation Agreement,” she added in an email to The Blade.
But ProMedica spokesman Tausha Moore countered that it is actually the university that owes ProMedica money. Each month, she said ProMedica pays between $3 million and $4 million, adding that the nonprofit hospital is withholding the August and September payments — worth between $6 million and $8 million — as “a true-up for amounts UT owed up to this point.”
“Historically, ProMedica has made monthly payments to UT College of Medicine & Life Sciences (COM&LS) as part of the Academic Affiliation, and then they reimburse us for expenses associated with supporting the agreement on our campus,” she wrote to The Blade. “Unfortunately, past reimbursement payments from UT COM&LS have been insufficient, resulting in money still being owed to ProMedica.
“To recoup the money owed to us for prior and current months, we chose to withhold our investment installment payments in August and September,” she added. “ProMedica explained the reason for the withholding to the UT COM&LS finance team. Upon learning of the letter, we have requested that UT COM&LS issue a revised communication to accurately reflect the process that has been under way.”
She added that ProMedica officials invited UT to “reengage in a discussion to help ensure reimbursements going forward are consistent with a mutually agreed upon budget.”
In a Sept. 14 letter to faculty and staff, UT medical college dean Dr. Chris Cooper wrote that ProMedica’s “financial woes and inability to fund its portion of the affiliation agreement with the college” are the reason UT officials are now looking to reduce the College of Medicine and Life Sciences’ operating budget by $15 million by Oct. 1 — representing 14.5 percent of the total fiscal budget.
“As you are likely aware, our Academic Affiliation partner, ProMedica, continues to have significant financial challenges that are having a direct impact on their ability to fulfill the financial commitments under the agreement,” he wrote. “This has created an immediate cash flow challenge for the college that we must address this fiscal year.”
“While this challenge is not of our making, we must address the financial shortfall while prioritizing our learners and patients above all else,” he continued later in the letter. “ We also recognize that it is our faculty and staff that enable the college to fulfill our mission. At this point, we don’t anticipate reductions in compensation or personnel layoffs.”
Back in 2015, both the university and not-for-profit hospital touted its 50-year agreement. In return for millions of dollars each year, including $40 million in an upfront payment, UT officials agreed to make ProMedica its exclusive clinical education partner with the college of medicine.
The university also agreed to send large numbers of UT medical students and residents to train at ProMedica Toledo Hospital and the Toledo Children’s Hospital and “elevate Toledo Hospital and Toledo Children's Hospital to become a premier academic medical center with an emphasis on teaching, research, and the use of technology and evidence-based medicine.”
But in the years following, critics of the affiliation agreement argued it resulted in a large number of faculty and hospital residents being moved to ProMedica’s flagship Toledo Hospital from the University of Toledo Medical Center — the former Medical College of Ohio Hospital— thus leaving the public teaching hospital a shell of its former self.
UT officials in April, 2020, announced they were accepting bid proposals to purchase, lease, or manage UTMC in response to its financial straits. In June, 2020, then-UT board Chairman Mary Ellen Pisanelli noted UTMC faced a more than $25 million budget deficit, with finance officials reporting decreases for the past five years in patient admissions, as well as reductions in federal and state payments.
UT officials at the time added the coronavirus pandemic made those financial problems worse by forcing a halt to many medical procedures.
Roughly 40 “interested parties” from across the country responded, with ProMedica only for-sure bidder interested in UTMC’s operations. But less than a month later, then interim UT president Dr. Gregory Postel — who months later accepted to stay on as UT’s leader — reversed course on the sale, adding that UTMC was worth saving.
Fast forward to fall of 2021, and UT officials reported that UTMC came out roughly $4 million ahead of budget expectations after predicting it would run a roughly $14 million shortfall by the end of June of that year.
This was in part because of partnership with the Toledo Clinic, along with marketing and operating improvements, and didn’t include the $28.2 million in federal coronavirus stimulus funds.
As for ProMedica and the college of medicine, the university began receiving fewer dollars than expected in 2019 and 2020 because not enough medical residents were transferred to the private, nonprofit hospital as was called for in the affiliation agreement, according to financial documents. In 2019, the university received $3 million less than expected while in 2020 it received roughly $6.4 million less for the same reason.
Under the Ohio Public Records Act, The Blade requested from UT records pertaining to its discussions with ProMedica involving the payments after they declined to provide financial information, make anyone from the university available for comment, or answer additional inquiries.
First Published September 19, 2022, 4:30 p.m.
