When she steps down later this spring, University of Miami President Donna Shalala will leave the school with fund-raising records, rising academic standards and a rosier national reputation.
But she also will pass on to her new successor some daunting problems that critics largely link to UM’s rapid expansion in a fast-changing, fiercely competitive South Florida healthcare industry.
“These are problems that the university has had and the problems are still there,” said Norman Braman, the prominent auto magnate who left a UM board of trustees post over differences with Shalala’s expansion goals.
But Braman said he has high hopes for her successor, who he says should provide UM with dynamic “real world” leadership. He and other longtime observers believe the selection of Julio Frenk — Harvard University’s dean of public health and Mexico’s former minister of health — underlines the vital importance of a sound UM Health System to the school’s future.
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Shalala’s critics, including Braman, tick off a list of issues with her ambitious quest to boost UM’s regional medical profile.
They say the school overpaid for a local hospital that put UM in direct competition with next-door Jackson Memorial Hospital. It was a controversial move because for decades the private university’s medical school has provided services and trained doctors at the publicly owned Jackson. Shalala also hired more than 100 high-profile researchers at great cost and launched a biotech research park.
But the effort to build a world-class medical center in Miami led to financial troubles in recent years that forced layoffs of about 900 full-time and part-time workers at UM’s Miller School of Medicine.
Now Frenk will inherit that legacy amid dramatic changes in Florida’s healthcare landscape, from the advent of Obamacare to deep cuts in Medicaid benefits for the poor.
UM board of trustees chairman Stuart Miller defended Shalala, saying her accomplishments at the medical school named after his father were significant.
“Of course, the relationship between the University of Miami and Jackson has, just because of its nature, its challenges,” said Miller, chief executive of the Lennar Corp. “But Donna has paved the way for a strong and vibrant relationship between the two institutions. And Dr. Frenk is well situated with his experience to be a bridge.”
Marcos Lapciuc, a longtime member of the Miami-Dade County Public Health Trust, which oversees Jackson Memorial and other healthcare facilities, said there are still wounds to heal.
UM’s purchase of the old Cedars Medical Center for $275 million in 2007 raised serious doubts about the university’s commitment to Jackson as a partner, he said. While the tension has eased to a degree as Jackson has emerged from a financial crisis, he said the relationship remains strained.
“From the perspective of Jackson, I believe that the partnership between Jackson and UM has to be re-energized instead of UM going on their own and viewing Jackson as a footnote,” said Lapciuc, a past Jackson board chairman. “He inherits serious structural issues, but at the same time he inherits tremendous opportunity.”
“But for that to happen,” he said, “it will take a lot of will on both sides.”
Braman has been one of the most outspoken critics of UM’s healthcare business strategies. Back in 2011, he wrote a scathing letter to fellow UM trustees about the 560-bed Cedars purchase, saying it would hurt Jackson Memorial and become a drain on the medical school’s resources.
The following year, UM leaders announced widespread layoffs, including the removal of several executives. At the time, Shalala told the Herald that she reacted with reasonable speed to situations she couldn’t control. “There is nothing we’re doing that everybody else in healthcare is not doing,” she said.
Braman said he’s now optimistic with the university’s change in leadership.
“Coming from Harvard, he understands the role of the president in the community,” Braman said. “Look at what Boston has been able to achieve ... I’m not saying we’re going to match Boston, but if we’re ever going to develop a viable biotech campus, we’re going to need a dynamic leader.”
He said the university’s construction of a single bio-tech building, UM Life Science and Technology Park, was not enough.
“They have a long ways to go,” he said.
Like Braman, longtime industry observer Linda Quick said she was impressed was UM’s selection of Frenk, noting he was clearly hired for his expertise in medicine and public health because both fields generate much of the school’s revenue. According to a UM financial report in 2011, medical programs generated $1.7 billion in revenue.
Quick, president of the South Florida Hospital and Healthcare Association, said UM’s purchase of Cedars came at a time when competition was increasing while insurance companies were putting pressure on hospitals to limit patient stays.
“These are challenging and volatile times,” Quick said. “To an extent, it’s the same problem for all hospitals. But for UM, it’s a slightly steeper hill to climb.”
Herald staff writer Christina Veiga contributed to this story.