UofL gives embattled administrator paid not to work, $1.15M to go

UofL gives embattled administrator $1.15M to go
Dr. David Dunn (Source: WAVE 3 News)
Dr. David Dunn (Source: WAVE 3 News)

LOUISVILLE, KY (WAVE) - The same day a state audit blasted the University of Louisville Foundation for a lack of oversight and excessive pay or bonuses for staffers, the University confirmed to WAVE 3 News that it is paying an embattled administrator more than $1 million to leave.

UofL's Executive Vice President for Health Affairs Dr. David Dunn "leaves the University as a full professor in good standing," according to a news release. "To compensate for relinquishing his tenured position, Dr. Dunn will receive $1.15 million."

The sum represents about two years' worth of the faculty portion of Dunn's pay package - roughly two thirds of his more than $800,000 yearly compensation.

Dr. Dunn had been drawing that pay for not working for more than a year. The University had placed him, and Chief Information Officer Dr. Priscilla Hancock, on paid administrative leave after the FBI began a probe as to whether they misused University money.

Dr. Hancock, who earned more than $320,000 annually, retired in October.

Dunn's contract as an administrator expired in June, but his tenure rights entitle him to one year's paid sabbatical or leave, University officials acknowledged.

Those same officials also confirmed that Dunn, a Board-certified microbiologist and immunologist, hadn't taught a single class, nor published a single article of research, nor treated a single patient since former President Dr. James Ramsey hired him in 2011.

"It's curious," Dr. Peter Hasselbacher said Wednesday.

Hasselbacher, who retired from UofL's medical school as Professor of Geriatrics more than 10 years ago, authors a blog for the Kentucky Health Policy Institute, "'A One-man-operation' that allows me to speak my mind," he said.

UofL confirmed Dunn's deal after Hasselbacher requested comment Tuesday. His blog refers to Dunn as "one of the principal architects" of the deal between University Hospital and KentuckyOne Health four years ago, in which KentuckyOne took operational control of the hospital and the James Graham Brown Cancer Center.

Tuesday, UofL announced it was restructuring partnership, and that KentuckyOne would cede management and operation control before the next fiscal year begins July 1.

"When the parties unwind, they go their separate ways, and they don't talk again," said Dr. Greg Postel, the administrator filling Dunn's role since Dunn's leave began. "That's not what's happening here."

KentuckyOne had pledged a 20-year commitment worth close to $1 billion.

"The restructuring (releases) KentuckyOne Health from all claims that were outlines in a letter of October 16," Postel said, referencing University claims that KentuckyOne was $62 million behind in its payments. "KentuckyOne Health will honor all of its financial obligations to both hospital and to the University of Louisville."

They include $44.9 million in capital improvements to hospital facilities due by July 2017, and academic agreements that allow medical students to complete residency training at KentuckyOne hospitals - including Jewish and Frazier Rehab.

"The real focus should be on improving health and improved expansion of services," Dunn said when announcing the initial deal in November 2012.

"It was not a successful partnership from the start," Hasselbacher said.

In February 2014, KentuckyOne laid off 500 caregivers and staffers system-wide.

"We cannot afford to provide every service at every location," CEO Ruth Brinkley explained to staffers via a YouTube video.

KentuckyOne centralized University Hospitals IT Department, Human Resources, pharmacy and supply chain. It outsourced some of the pathology lab work.

Postel's October letter to KentuckyOne referenced staffing issues that threatened patient safety and UofL's credibility and reputation as a teaching hospital and center for medical research.

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"Some have speculated that the Board (of Trustees) has taken no action with respect to Dr. Dunn because it agreed not to take other than routine actions in a settlement of a lawsuit by a group of community ministers over the racial make-up of the Board," Hasselbacher wrote in his blog. "Perhaps no action was appropriate."

Dunn's departure deal did not require Trustees' approval, UofL media relations director John Karman said Wednesday. "Legal counsel for the University and Dunn struck a deal."

Dunn's attorney, R. Kent Westberry, has not returned phone calls from WAVE 3 News seeking comment.
The University has not responded to an Open Records Request seeking a copy of Dunn's severance agreement.
Dunn faces no criminal charges in the FBI.

"To my knowledge, the status of that investigation has not been made public," Hasselbacher wrote.

Karman referred all questions surrounding the probe to the FBI. Bureau policy is not to comment on, nor confirm pending investigations.

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