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Hurricane Ike devastated the University of Texas Medical Branch at Galveston. Another storm is brewing over why the regents don’t want to rebuild it.

By January 2009Comments

Steve Ogden, the sharp-witted, white-haired chairman of the state Senate Finance Committee, is not often stumped, but lately he has been mystified by the behavior of the board of regents of the University of Texas. Ogden can’t figure out why, in the wake of Hurricane Ike, the leaders of the UT System seem willing to allow one of Texas’s finest medical institutions, the University of Texas Medical Branch at Galveston, to suffer a slow and unnecessary death. The demise of UTMB, which consists of a medical school, five hospitals, numerous clinics, and an affiliated unit specializing in burns, threatens not just the livelihoods but the very lives of the people who depend on it for employment, care, and support. Yet even before the cleanup from Ike was complete, the regents balked at the costs of reopening the sprawling complex. “For whatever reason, [the university] is not asking the foundations, the Legislature, and the voters for help, and I can’t understand why,” Ogden says. “The financial issues are not insurmountable. I don’t understand the politics. I don’t understand what’s driving a decision that I would consider a political disaster.”

If you live far from the Gulf Coast, this controversy may have escaped your notice, what with the financial crisis, the global warming crisis, and the health care crisis, but in fact, this crisis has a relationship to all three. Founded in 1891, UTMB is the oldest medical school in Texas and arguably the quirkiest: For most of its life, it embodied the best of Texas medicine, which means that its doctors were fiercely independent and irrepressibly innovative. The Level I trauma center at John Sealy Hospital had the highest survival rate of any trauma center in the United States. UTMB ranked third in the country in receipt of valuable National Institutes of Health grants, and it quietly and steadily pioneered treatments for AIDS, burns, infectious disease, mental illness, infertility, and kidney disease, among others. Further, it was known as a place that encouraged and nurtured minority medical students—people who looked like the patients they treated. UTMB was known all over the state as the medical center of last resort for poor and uninsured patients who could not pay; other medical centers routinely turfed the very sick there, and it was a point of pride that UTMB treated everyone, usually without the expectation of being paid back. This was not a quixotic venture. The school’s mission was to take care of the poor, and besides, the State of Texas had its back.

Or at least it used to. As Ogden explains: “UT has a weakness in that their primary goal is prestige. Their attitude is, ‘If it’s prestigious and we can make a lot of money, we’re for it, and if it’s not, we’re against it.’ Public service is way down on their priority list.” As medical costs rose, reimbursements shrank, and paying patients wanted extras found more frequently in private hospitals (“There wasn’t a grand piano in the lobby to make patients feel comfortable,” an administrator told me). The once prominent institution began to falter, losing up to $15 million a month.

Soon enough, UTMB came under pressure from the regents to move its focus from providing indigent care to developing niche-marketed, profit-generating services, like transplants, that might improve the school’s bottom line. There were complaints about inefficiencies: UTMB allowed patients to remain at John Sealy Hospital for too long; its doctors performed too many costly tests. To ensure progress on the financial front, regents began looking for medical school leaders who were less tied to Galveston and the UTMB ethos and more beholden to Austin and the quest for money and prestige.

In the meantime, Galveston itself had become economically dependent on UTMB. On the eve of Hurricane Ike’s arrival, the city’s population was more than 57,000 people; UTMB employed around 12,500. With so much at stake, the enmity between the residents of Galveston (an eccentric lot in the best circumstances) and the regents in Austin (a little insensitive in the best circumstances) flourished predictably. Once UTMB president David L. Callender and UT System interim chancellor Kenneth I. Shine started initiating changes that heralded program cuts and layoffs, the long-standing rumor that UT wanted a medical center in Austin—and might kill UTMB to get it—spread across the Island with, well, hurricane force.

Then the real hurricane hit. Overnight, one million square feet of hospital space filled with saltwater, muck, and sewage. Boats had washed up on the lawn, and dead cattle rested by the helipad. Mildew and mold were growing so fast that people had to wear masks when they entered the hospital. During the storm’s approach, patients and medical students had been relocated to other hospitals and schools around the state. Yet how soon they would be able to return suddenly became subject to debate. The medical school’s physical plant had been allowed to deteriorate over the years; no one could pay, or wanted to pay, for the necessary repairs, much less the kinds of upgrades that had made UTMB’s new biodefense center, Galveston National Laboratory, immune to Ike’s winds and water. The regents also claimed that they had been able to insure the school’s $900 million physical plant for only $100 million. UTMB, already branded as a financial drain by Austin, was now losing $40 million a month. While the natives continued to press for rebuilding, the regents began pulling in the reins, pushing for the kinds of changes that had met with such resistance before the storm.

Then, in a closed meeting of questionable legality held in El Paso on November 12, the regents drew a line in the sand: To staunch the bleeding, the university would lay off up to 3,800 UTMB employees, everyone from clerks to world-class surgeons. (As this article went to press, a lawsuit was being filed on behalf of the Texas Faculty Association alleging that the regents had violated the Texas Open Meetings Act.) A reserve fund would be used to pay staff salaries, but that money would run out by April or May if the remaining 10,000 employees remained on the payroll. Promises of dubious value followed: Yes, John Sealy Hospital would reopen, the UTMB administrators announced—but in a scaled-down state, with 200 beds instead of the 550 available before the storm. The trauma center would also reopen—but only for emergency medical services. Care for the indigent and the uninsured would be restored—eventually. The regents publicly declared support for UTMB, but to many in Galveston, and to Senator Ogden, this plan looked suspicious at best. “UT is using the hurricane as an excuse to do what they’ve wanted to do for a long time, which is to reduce their presence in Galveston and go somewhere else,” he says.

A source in Austin with knowledge of the situation categorically denied this. Their concerns, the source said, were financial and political, but not for the same reasons cited by Ogden: No one was sure the university could get insurance for a restored UTMB, and some legislators worried about investing millions of dollars of state money in a faraway hospital, even though UTMB had been treating their uninsured constituents for decades. What if, the politicians wanted to know, another hurricane destroyed what was rebuilt? In general, those opposed to helping UTMB say there isn’t enough money to restore it to its pre-Ike state, much less make it bigger and better, as Ogden would like.

“UT is throwing up a lot of objections [to rebuilding], not because those objections are valid but because that’s not what they want to do,” Ogden says. By his calculations, adding even 75 percent of the amount UTMB expects to get from FEMA to the millions pledged by both the Moody and Sealy & Smith foundations, along with the $100 million insurance payout, should be sufficient funding for UTMB to operate at its former capacity. What has frustrated Ogden, however, is that he has so far been unable to get an exact number from the UTMB leadership for what is needed. Furthermore, citing concerns that it might hinder UTMB’s ability to secure funding from FEMA, President Callender has been unwilling to accept money from local private foundations.

Recently, state legislator Craig Eiland called for the creation of a hospital district on the Island as a possible compromise. If approved by the voters of Galveston County—a big if—UTMB would have a permanent source of revenue from property taxes to help defray its reconstruction and future operating costs. This arrangement has succeeded in the nearby Harris County Hospital District.

Failing that, unless Ogden prevails, UTMB will face inevitable death. Ogden is keenly aware that as an Aggie challenging the most powerful teasips, he’s vulnerable to criticism that he has it in for A&M’s longtime rival. Even so, he’s persisted. He understands that the proposed reduction in the number of hospital beds means a reduction in the number of patients needed to support a viable medical school; in order to become the best doctors, students need patients with a variety of illnesses and injuries. Victims of local emergencies, from car accidents to refinery explosions, would no longer have a Level I trauma center at their disposal; they’d have to depend on an ambulance or a helicopter to get them to Houston. Certainly Galveston’s residents would suffer financially and medically with a reduced UTMB, but so too would all the overcrowded public hospitals in Texas that would then have to take in more uninsured patients, or simply turn them away without treatment. “The longer the hospital stays out of commission the more people forget,” one longtime Island resident told me.

Maybe that’s just what the regents are hoping for.

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