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Monday, December 29, 2014
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Published: Monday, 8/12/2002

The cost of help these days

At the rate we - the taxpayers - are compensating him, the new financial adviser just hired by the Medical College of Ohio had better be good. Whatever advice he'll be giving MCO officials on what to do about the school's money problems isn't coming cheap.

Ranging from $1,500 to $2,000 a day through January, the contract awarded Russell Armistead could soon be the butt of TV talk-show jokes. Indeed, his first admonition to the MCO board would have to be: “Don't sign any more deals like mine.”

Assuming the Winston-Salem, N.C., consultant stays at MCO just the expected six months, his $227,000 package - a five-day work week, holidays not included - will be eating substantially into MCO's projected budget surplus of $737,265 for the current fiscal year.

That's an annual compensation rate approaching $500,000, certainly among the highest of any state-paid official.

While we are aware that quality advice from experts can be costly, Mr. Armistead's contract seems to reinforce the view that consultants don't work for just a lot of money, they must be given additional perquisites on top of a generous fee.

Cases in point: footing the so-far unspecified bill to put the consultant up in a two-bedroom apartment while he's in town, plus the cost of a monthly round-trip airline ticket so his wife can visit. These expenses are the over-the-top perks that tend to drive the average person crazy.

Moreover, the deal comes at a time when MCO's financial problems already have resulted in higher tuition for students; job cuts, elimination of staff positions, and a hiring freeze, plus closings or cutbacks in several hospital units.

At the same time, MCO is carrying an additional $238,555 a year administrative obligation for the salary of its president, Dr. Frank McCullough, who is on medical leave for treatment of prostate cancer.

In short, the consultant's hiring obscures the fact that MCO officials apparently already know what they need to do to stay in the black, and they've already taken some of the steps. Mr. Armistead will certainly be worth his fee if he can come up with a sure-fire way to induce the General Assembly to provide more state support, or persuade Congress to stop cutting hospital reimbursements, but such actions are unlikely in the next six months.

To her credit, MCO's interim president, Dr. Amira Gohara, is acknowledging frankly that the school needs help in revamping its finances and doesn't have people on staff with the sufficient expertise. But that candid admission is tempered by the fact that the officials who now hold the two jobs Mr. Armistead will fill are simply being shunted to newly created administrative positions at substantial salaries.

To be sure, MCO management is wise to try to put the school's fiscal house in order before embarking on a search to fill its vacant presidency. With additional cuts in state aid likely, and Congress showing little willingness to provide more money for health care, higher education and hospital administration are two of the toughest jobs around. Put them together, and you have a double burden for those who run a medical school and teaching hospital.

Maybe the better deal for MCO would have been to find a consultant whose fee depended not in faith on high-priced advice but on success at actually finding new money.



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