The lawyer who negotiated a deal for the University of Arizona and Banner Health to enter into a partnership to build a hospital for a Phoenix medical school campus says allegations she had a conflict of interest are politically motivated.
Beth Schermer, who served as an interim vice dean for the University of Arizona College of Medicine from late 2005 until January, said lawmakers alleging possible improprieties are doing so for political gain.
“I feel sorry if people feel that’s what they need to do to score points,” she said. “It strikes me that this is not about the medical school. The question is, what is this really about≠”
Rep. John Kavanagh, R-8, says it’s about clearing up why the UofA partnered with Banner, and not Maricopa Integrated Health System (MIHS), given that Banner has been a client of Schermer’s law firm, Coppersmith, Gordon, Schermer & Brockelman.
“I don’t know Beth Schermer and the only political points I want to score is with the taxpayers of Arizona,” he said.
Conflict of interest alleged
Kavanagh and Rep. Sam Crump, R-6, told reporters April 10 they had concerns over the appearance of a conflict of interest because of Schermer’s prior relationship with Banner.
“You don’t have to be an attorney to say, ‘There’s a problem here,’” Crump said.
Schermer was paid a total of about $325,000 for her work as interim vice dean and still has a $10,000-a-month contract with the university.
Kavanagh said MIHS’s need for a new hospital made it a perfect match to be partners with the medical school in Phoenix.
“The whole idea was to replace it with a new hospital,” he said.
But Schermer says there was never any attempt for the school to partner solely with MIHS. Instead, she said, UofA had hoped to create a dual partnership with both Banner and the county.
“That doesn’t provide, on many fronts, the strongest possible base,” she said of working only with MIHS. “We never were contemplating or discussing a sole model.”
All three entities agreed to hire a consultant to evaluate the dual-partner model. When the report came back, Schermer said, it found there would be too many difficulties in using such an arrangement. Thus, the university opted to partner with Banner, Schermer said, in a public-private partnership common at medical schools around the country.
Never once during the process, Schermer says, did any of the parties question her allegiances of suggest she had a conflict of interest. She says she has represented virtually every organization in the hospital — and health care fields.
“What I am is a health care lawyer,” she said. “They knew that, I disclosed it. It’s no secret.”
But Maricopa County officials say the negotiation between the university and Banner happened surreptitiously – and unexpectedly.
“All along, we expected to play a vital role with the new medical school,” said Paulina Morris, chairman of the Maricopa County Special Health Care District Board, which oversees MIHS. “We were just completely shocked…
County disputes report
“We expected to be a partner to the medical school.”
Gibson McKay, director of governmental relations for MIHS, said the county is also disputing the report. While all three organizations — the UofA, Banner and MIHS — paid for it, he said it was supposed to focus on how to make a multiple-partner arrangement work.
“We ended up firing that consultant because he talked about a two-way agreement, not a three-way agreement,” he said. “We didn’t think his report was accurate or fair.”
Within a week of the consultant’s report, which was released last November, McKay says MIHS submitted an alternate proposal to the university and Banner, but the county didn’t hear anything until the agreement with Banner was announced about three weeks later.
Charlie Hendrix, a member of the county’s health care district board, said she only wants to see the public dollars invested in the project spent to best benefit Arizonans.
“It’s hard to tell right now [if that’s happening] because it hasn’t been the open process we’ve asked for from the beginning,” she said.
But Schermer says the complaints about her and the process are little more than sour grapes. She says that UofA insisted MIHS remain at the table and be involved in the school in a secondary role.
“We very much wanted to keep talking and, in fact, have repeatedly requested a detailed discussion of Maricopa’s role,” she said. “[MIHS CEO]Betsey Bayless has said she didn’t want to talk about it and she still doesn’t.”
Bayless couldn’t be reached for comment, but McKay says the university hasn’t done anything to indicate they want to work with MIHS.
“We haven’t heard from them since January,” he said.
According to media reports, House Speaker Jim Weiers has said he would like to see the agreement with Banner renegotiated to include MIHS.