0001
 01  P-R-O-C-E-E-D-I-N-G-S
 02  --ooOoo--
 03                 SENATOR ORTIZ:  Good afternoon.  Today we are 
 04  going to begin when we have Members joining us.  We have an 
 05  informational hearing of the Senate Health Committee.  The 
 06  hearing will be on the topic of UC Irvine Medical Programs: 
 07  Diagnosis and Prescription for Accountability.
 08                 Let me ask the sergeants to invite the Members of 
 09  the Senate who are joining us.  We are in some difficult time 
 10  constraints, given that we will lose this room at a time certain 
 11  at 1:15, and in order to get through what I think is a very 
 12  important hearing, with lots of valuable information, I would 
 13  encourage Members to join us, particularly those that sought 
 14  participation of this Committee.
 15                 With that, let me just give the other Members of 
 16  the Legislature a few moments to join us, and thank the public 
 17  for joining us, as well as the representatives of UC. 
 18                 Thank you.  I've been joined by Senators Cox as 
 19  well as Maldonado.  I certainly am prepared to begin, given our 
 20  short time constraints.  As other Members join, they'll be 
 21  invited to say some opening comments.
 22                 Let me just begin by thanking everyone for being 
 23  here today.  Again, Senator Cox, Maldonado.
 24                 This hearing today was sparked by the recent 
 25  controversy over the University of California at Irvine's Liver 
 26  Transplant program.  The intent of this informational hearing is 
 27  to determine how broad the problems were, and how they may have 
 28  been avoided, as well as what corrective actions, if any, have 
0002
 01  been taken.  Understanding that the program closed down last 
 02  fall, we still want to know who was accountable for the problems 
 03  that at least contributed to the deaths of dozens of patients on 
 04  UCI's liver transplant waiting list.
 05                 My colleagues, Senators Romero and Maldonado, 
 06  asked that I convene this hearing.  When I heard the information 
 07  that they had about the University of California at Irvine's 
 08  medical programs, frankly, I was shocked.  The fact that almost 
 09  a hundred organs were turned away while people died on the liver 
 10  transplant list is very disturbing.  That this would occur at a 
 11  public institution that receives tax dollars is even more 
 12  alarming.
 13                 It would be disturbing enough if this were one 
 14  isolated event.  However, it appears that we unfortunately have 
 15  seen these problems before, and that a very horrific pattern has 
 16  emerged.  This pattern dates back to the fertility clinic 
 17  scandals of the mid-'90s.  We seem to continue seeing problems 
 18  with the University of California at Irvine and its Medical 
 19  Center:  problems with the kidney transplant program; the staff 
 20  selling body parts; allegations of the staff misleading 
 21  officials about the viability of the University of California at 
 22  Irvine's programs; and the allegations of fraudulent billing of 
 23  the Medicare and Medi-Cal programs.
 24                 While we understand that there are some areas 
 25  that we cannot get into because of pending litigation or 
 26  possible litigation, as well as possible criminal and/or civil 
 27  investigations being conducted by federal authorities, we are 
 28  anxious nonetheless to hear from the University of California 
0003
 01  administration.
 02                 It was in November that the liver transplant 
 03  program was closed.  I am sure that UC, and Chancellor Drake as 
 04  well as Dr. Cesario in particular, can tell us about what is 
 05  being done to ensure public accountability and protection of 
 06  patients and the public's dollars.
 07                 At this time I would like to extend an 
 08  opportunity to my colleagues to make some opening comments. 
 09  Senator Cox had joined us earlier, but Senator Maldonado was one 
 10  of the individuals to request a hearing.  So, whatever the 
 11  desire of the two Members to begin, please, both of you will be 
 12  given an opportunity to weigh in.
 13                 SENATOR MALDONADO:  Thank you, Madame Chair. 
 14  Thank you for allowing us to have this hearing.  I think it's 
 15  important, and I'm hopeful that Senator Romero will show up 
 16  soon.
 17                 SENATOR ORTIZ:  As do I.
 18                 SENATOR MALDONADO:  She has been at the 
 19  forefront, as you stated.  We requested this hearing.
 20                 I also want to thank the folks who flew up here 
 21  or drove up here to testify.  I really appreciate your time.
 22                 I guess the question is, why are we here?  Why 
 23  are we here today? 
 24                 We're here today because over the past decade, UC 
 25  Irvine has been plagued with scandal after scandal.  And at the 
 26  heart of each one has been the lack of accountability and the 
 27  lack of oversight.
 28                 We requested this hearing to shine a light on the 
0004
 01  University of Irvine, to lay it out on the table, and to see 
 02  this for what it is, not as a group of individual mishaps, but a 
 03  pattern.  A pattern of mishaps and errors that have been brought 
 04  about by a culture of secrecy and lack of accountability.  A 
 05  culture that has been more interested in self-preservation and 
 06  self-advancement than doing what's in the best interest of the 
 07  people it's supposed to serve, the people of California.
 08                 Today UCI is at a crossroads, and there are two 
 09  clear choices.  The first choice is the easiest choice, to 
 10  follow the leadership of the Regents and do nothing of 
 11  substance.  This is what UCI and the UC system has done for over 
 12  a decade when it is has been confronted with problems.  If this 
 13  happens, you will be consistent and nothing will change.
 14                 In the not-so-distant future, there will be a new 
 15  headline that says, "UCI is entangled in some new scandal, and 
 16  this one is worse than the last one."  There will be a few 
 17  internal reports that say nothing is wrong, or there is an 
 18  isolated incident, and this is the reform that will be made, and 
 19  that and this reform will be made.
 20                 I've heard it long enough.  And at the end of the 
 21  day, it will amount to a whole lot of nothing, and it will again 
 22  be blamed on the system.
 23                 I've been working on some other UC issue now for 
 24  a little over seven months.  I've got to be frank with you, that 
 25  the more and more I hear about it, I'm starting to dislike and 
 26  dislike more of this system, because it seems to be blamed on 
 27  the system.
 28                 Or, UCI can choose a new path, a path that the UC 
0005
 01  system has never taken before, and make real changes and lasting 
 02  reforms.  Changes that will not put us back here asking the same 
 03  question again five or ten years from now.  This is the path 
 04  this Legislature implores you to take, and this is the path that 
 05  the people of California demand you to take.
 06                 The choice, I believe, lies with Chancellor 
 07  Drake.  And I just was reading the articles and so forth of his 
 08  inauguration.  What a beautiful thing, and I commend you, and I 
 09  wish you all the best, Chancellor.
 10                 As UCI's leader, it will be your decisions and 
 11  your leadership that sets the tone.  If you decide you will not 
 12  tolerate secrecy, and you decide to hold people accountable for 
 13  their actions, and you choose to put the people's interests 
 14  before the interest of UCI, I believe in my heart that things 
 15  will change.
 16                 But if you choose to go on doing things the way 
 17  we have always done things, quote, "the old way," the UC way, 
 18  then I can guarantee you that this will not be the last time 
 19  that you will be asked to come to Sacramento.
 20                 I believe in you, Chancellor Drake, and I believe 
 21  in opportunities.  And this is your opportunity to change UCI.  
 22  This will be your legacy as Chancellor.  The ball is in your 
 23  court, and I hope that you're up to the challenge.
 24                 Thank you once again, Senator Ortiz, for hosting 
 25  this hearing.
 26                 SENATOR ORTIZ:  You're more than welcome.
 27                 Senator Cox.
 28                 SENATOR COX:  Senator Ortiz, thank you very much.
0006
 01                 This is a very important hearing, and no doubt in 
 02  my mind that the people of the State of California need to have 
 03  confidence in the University of California system.  They're 
 04  certainly entitled to have confidence in the UCI, the University 
 05  of California at Irvine.
 06                 I'm looking forward to the testimony today and 
 07  suggest that we get started.  Thank you.
 08                 SENATOR ORTIZ:  Wonderful.
 09                 Before we get started, let me make just a few 
 10  cautionary words because I think the assurances need to be 
 11  provided about the parameters of the hearing today.
 12                 There are some important things that I think we 
 13  all need to bear in mind, and I'll mention them.
 14                 Because we do not want to interfere with other 
 15  criminal and/or civil investigations, we've established some 
 16  parameters for this informational hearing.  Legislative Counsel 
 17  is in attendance, and should the Committee desire to consult 
 18  with legal counsel, they are available to us.
 19                 Where do we have Leg. Counsel?  You're welcome to 
 20  come join us up here.  Please join us up here.  That way you can 
 21  be on a mike if necessary.
 22                 We are also having a transcript done by a court 
 23  reporter so that we can refer back to previous testimony and 
 24  witnesses if necessary.
 25                 Also there is an ongoing federal investigation.  
 26  The details are sparse, but what we do know is that the FBI is 
 27  working with the US Department of Health and Human Services, and 
 28  a federal subpoena was served on the University, not a state 
0007
 01  subpoena from this Committee hearing.  Let me make that clear.
 02                 At this early stage of the investigation, we 
 03  don't know if it will be for civil or criminal charges, or if 
 04  any charges will be filed at all.
 05                 We do know that a number of individuals will be 
 06  interviewed, including one of our witnesses, Dr. Cesario.  We've 
 07  agreed that Dr. Cesario will be unable to answer questions about 
 08  the liver transplant program, and both University counsel and I 
 09  will make sure that we follow that agreement.
 10                 Is the University counsel here?  You're welcome 
 11  to join us up here if you think it's necessary, or you can 
 12  certainly wait until your client comes forward.
 13                 That federal subpoena, along with ongoing 
 14  litigation, will limit the areas that witnesses for the 
 15  University of California are able to discuss.  The UC witnesses 
 16  are accompanied by their counsel, who will provide the proper 
 17  legal advice to their clients as well as to individual questions 
 18  raised by Members of this Committee.
 19                 This hearing came about quickly, and it required 
 20  flexibility on the part of all the parties to make it happen.  I 
 21  especially want to thank the University of California for their 
 22  assistance in accommodating our request and making themselves 
 23  available to us today.
 24                 With that, I think it's our opportunity to move 
 25  into the first panel discussion.  With that, I'd like to ask our 
 26  first witness to come forward, Dr. Lipscomb with the Department 
 27  of Health Services, who will testify about their interactions 
 28  with the UCI liver transplant program.
0008
 01                 So, we are now moving into the Medi-Cal and the 
 02  University of California Irvine liver transcript program.
 03                 I'll ask you, Dr. Lipscomb, to introduce 
 04  yourself, and probably pronounce your name more appropriately  
 05  or correctly than I was able to do.
 06                 And I believe you have ten minutes for testimony 
 07  as well as questions is what we've allotted.  Just testimony, 
 08  and then there will be questions from the Committee Members 
 09  after your testimony.
 10                 Welcome.
 11                 DR. LIPSCOMB:  All right, thank you.
 12                 Good morning, Madame Chairman, distinguished 
 13  Members of the Committee.
 14                 I'm Dr. Fulton Lipscomb.  I'm the Chief of 
 15  Medical Policy Section for the Department of Health Services. 
 16  I'm the medical program consultant for the Fee for Service 
 17  Medi-Cal program.
 18                 I have some are opening remarks, and then at the 
 19  end I'll take any questions that you may have about the Medi-Cal 
 20  program.
 21                 The State Legislature mandated Medi-Cal's 
 22  coverage of liver transplantation as a program benefit in 1983.  
 23  In response to this mandate, the California Department of Health 
 24  Services convened a panel of medical and surgical experts, the 
 25  Medi-Cal Advisory Committee on Anatomical Transplants, or MACAT, 
 26  to provide written standards for Medi-Cal coverage and to assure 
 27  that there was federal Medicaid payment for organ transplants.
 28                 At that time, however, no hospitals in California 
0009
 01  were proficient or experienced enough in performing liver 
 02  transplants, so the very first transplants on Medi-Cal 
 03  beneficiaries were performed out of state at the University of 
 04  Pittsburg Medical Center, which is still a world leader in this 
 05  field.  Since then, Medi-Cal has convened advisory committees
 06  for all other solid organ and bone marrow transplants to develop 
 07  and maintain criteria for facility selection and patient 
 08  selection.  In fact, some third party health care payers also 
 09  use Medi-Cal's organ transplant criteria to direct their 
 10  coverage decisions.
 11                 With the advice and consensus of medical and 
 12  surgical experts, Medi-Cal develops and periodically updates 
 13  criteria with which to designate liver transplant facilities 
 14  within California as Medi-Cal Centers of Excellence for organ 
 15  transplantation.  That is, they are eligible to request 
 16  authorization and receive payment from Medi-Cal for providing 
 17  these services.
 18                 California facilities must demonstrate that they 
 19  have the professional staff and hospital infrastructure that 
 20  assures the greatest success for organ transplantations, which 
 21  are very expensive procedures.  In order to be designated as a 
 22  Medi-Cal Center of Excellence, a transplant center must 
 23  demonstrate the performance of a specific number of transplants 
 24  annually, and a high percentage of these patients must survive 
 25  at least one year following the transplant.  In the case of 
 26  liver transplants, centers currently must perform at least 18 
 27  adult transplants per year, or 12 pediatric transplants if 
 28  they're a children's facility, and at least 80 percent of the 
0010
 01  patients must survive at least one year.
 02                 For continuing approval as a Medi-Cal center, 
 03  facilities are responsible for providing the Department with 
 04  annual performance and survival data, as well as information 
 05  regarding major staff changes in the transplant programs.  Since 
 06  much of this data is also reported to national data bases, such 
 07  as the Organ Procurement and Transplantation Network, department 
 08  staff routinely access and review this information during the 
 09  course of business.
 10                 Currently there are seven Medi-Cal approved adult 
 11  liver transplant facilities:  California Pacific Medical Center, 
 12  Cedars-Sinai, Loma Linda, Scripps-Green, UC San Diego, UC Davis, 
 13  and University Hospital-USC.  Three that perform liver 
 14  transplants on both adults and children -- Stanford, UCLA, and 
 15  UCSF -- and one pediatric center, Children's Hospital Los 
 16  Angeles.
 17                 Under Medi-Cal, organ transplant services require 
 18  prior authorization.  That is, the provider must submit a 
 19  treatment authorization request for approval prior to the 
 20  service being performed.  TARs for adult transplants are 
 21  submitted to the San Francisco Medi-Cal Field Office, which was 
 22  chosen initially as the single office to process these TARs 
 23  because it also provides authorization for out-of-state 
 24  services.  There are currently three medical consultants in that 
 25  field office who review transplant TARs.
 26                 In December 2003, the University of California 
 27  Irvine Medical Center submitted a request for approval of a 
 28  liver transplant.  While reviewing the request, staff accessed 
0011
 01  the national data base and discovered that UCI's performance 
 02  numbers had been dropping since 1999, from 15 per year to only 5 
 03  for the whole of 2003.
 04                 Field office staff also alerted me to their 
 05  concerns about changes they had heard of in UCI's program, but 
 06  which UCI had failed to notify Medi-Cal.  In January 2004, I 
 07  drafted a letter to Dr. Sean Cao, who was identified as UCI's 
 08  new transplant director.  I requested that he provide me with an 
 09  explanation for the above numbers, and to confirm any changes in 
 10  the physician transplant team or other significant program 
 11  changes.
 12                 In February 2004, I received a response letter 
 13  from Dr. Ralph Cygan, the Chief Executive Officer, who confirmed 
 14  that Dr. Cao had assumed the administrative leadership of UCI's 
 15  liver transplant program from Dr. David Imagawa, the former 
 16  chief of UCI's Division of Transplantation, who had developed 
 17  health problems.  Dr. Cygan also discussed many administrative 
 18  and support staff changes that had occurred at UCI between 2002 
 19  and 2004, including the recruitment of a second liver surgeon, 
 20  Dr. Anthony Savo, to assist Dr. Cao, but Dr. Savo unexpectedly 
 21  left in October 2002.
 22                 Dr. Cygan also described UCI's ongoing efforts to 
 23  recruit another transplant surgeon who would also become the 
 24  Department of Surgery chairperson.  He also discussed their 
 25  administrative and support staff changes and their plans to 
 26  improve their program's performance numbers.  He also stated 
 27  that as an interim measure, Dr. Cao contacted Dr. Marquis Hart, 
 28  a transplant surgeon from UC San Diego, to assist Dr. Cao with 
0012
 01  procurements for transplant surgeries.
 02                 Medi-Cal staff thoroughly reviewed the 
 03  information UCI submitted, but we believed that it would be 
 04  prudent to give UCI staff the time and opportunity to fully 
 05  organize their transplant program, and perform at least one year 
 06  of the minimum 18 transplants per year.  We concluded at that 
 07  time that we were unable to grant UCI continued approval as a 
 08  Center of Excellence, effective with our letter to Dr. Cygan in 
 09  May 2004.  This means that beginning in 2004, Medi-Cal no longer 
 10  approved prior authorization requests for Medi-Cal payment of 
 11  liver transplants at UCI.
 12                 That's essentially my testimony.  I'll take any 
 13  questions that you have may have about the Medi-Cal program.
 14                 SENATOR ORTIZ:  Wonderful.  I have a few 
 15  questions, but let me extend the opportunity to my colleagues 
 16  first.  You did well on time, so we have at least four minutes.
 17                 No questions from Senator Maldonado, Senator Cox.
 18                 Okay, let me go, ask a few questions.
 19                 Just to make sure I understand correctly, is 
 20  there a sense there were some significant misrepresentations by 
 21  UC Irvine about them having a full transplant surgeon on duty in 
 22  certain gaps in your chronology?
 23                 DR. LIPSCOMB:  Yes, there were.
 24                 SENATOR ORTIZ:  Could you highlight those key -- 
 25  it sounds like there was a series of requests and inquiries in 
 26  which there were misrepresentations.  If you could highlight 
 27  those, I'd appreciate that.
 28                 DR. LIPSCOMB:  Medi-Cal's criteria for continuing 
0013
 01  approval require that a facility inform the department of any 
 02  significant changes in the transplant team or in their 
 03  hospital's infrastructure.
 04                 The changing of a transplant director is 
 05  certainly a significant change.  However, they never told us 
 06  about that.
 07                 SENATOR ORTIZ:  In that point in time -- 
 08  because I'm trying to reconcile that with the timeline that we 
 09  have in the packet for our colleagues here -- when that change 
 10  occurred and there was a departure, was that when 
 11  Dr. Mark Laret moved to UC San Francisco Medical 
 12  Center?
 13                 DR. LIPSCOMB:  I'm not familiar with that.
 14                 SENATOR ORTIZ:  When was that time that there was 
 15  a change in the key staffing that was not -- 
 16                 DR. LIPSCOMB:  This was 2002.
 17                 SENATOR ORTIZ:  And who left, and who --
 18                 DR. LIPSCOMB:  Apparently Dr. David Imagawa left 
 19  because of health problems, and Dr. Cao took over as the 
 20  Division Chief for Transplants.
 21                 SENATOR ORTIZ:  And they failed to notify the 
 22  department based on Medi-Cal requirements to run the program?
 23                 DR. LIPSCOMB:  That's correct, yes.
 24                 SENATOR ORTIZ:  Were there other critical 
 25  staffing changes, or any other kind of substantive material 
 26  misrepresentations that go to Medi-Cal certification and 
 27  criteria that you felt should have been provided to the 
 28  department and were not?
0014
 01                 DR. LIPSCOMB:  There apparently were some changes 
 02  in their transplant surgeon staff that, again, they did not 
 03  inform us of.
 04                 SENATOR ORTIZ:  And those changes in the 
 05  transplant surgeon staff were -- 
 06                 DR. LIPSCOMB:  The transplant surgeons who were 
 07  doing the procedures.  Apparently Dr. Cao was no longer doing 
 08  the procedure.  I'm sorry, Dr. Imagawa wasn't doing any 
 09  procedures, and apparently Dr. Cao may or may not have been 
 10  doing any procedures.  I'm not sure based on what --
 11                 SENATOR ORTIZ:  To this date do you know who was 
 12  doing procedures?
 13                 DR. LIPSCOMB:  No, I don't.
 14                 SENATOR ORTIZ:  Well, in terms of transplant 
 15  surgeons on duty, those are the key points that are pretty 
 16  significant, it appears?
 17                 DR. LIPSCOMB:  Yes, but our criteria also 
 18  required that you have other medical specialists on staff.  For 
 19  example, you must have a specialist in infectious diseases in 
 20  the event that you have complications from infectious diseases, 
 21  an immunologist, who could also serve as the infectious disease 
 22  person.  A pulmonologist in the event that there are lung 
 23  complications, and also a gastro-intestinal -- 
 24                 SENATOR ORTIZ:  Do we know they didn't have them 
 25  on staff, or that they weren't conveying who they were?  To this 
 26  date, do we know whether or not there were persons on staff in 
 27  those capacities and those specialties, or we simply don't know 
 28  who was there?
0015
 01                 DR. LIPSCOMB:  We don't know.
 02                 SENATOR ORTIZ:  And that gap in time, that period 
 03  of time ranges from -- 
 04                 DR. LIPSCOMB:  2002 to 2004.
 05                 SENATOR ORTIZ:  Do you hold one individual or two 
 06  individuals expressly responsible for having the duty to tell 
 07  you, provide this critical information and they failed to do so?
 08                 DR. LIPSCOMB:  We usually expect that from either 
 09  the medical or surgical director of the program because those 
 10  two, or three, or four members from each facility are the ones 
 11  who are members of our advisory committee.  So, we leave that 
 12  responsibility to them, or they can delegate their 
 13  responsibility for that to staff.  But we certainly expect that 
 14  they'll inform us somehow.
 15                 SENATOR ORTIZ:  And these medical directors and 
 16  surgical directors were at one point Dr. Imagawa, Dr. Cao?       
 17                  DR. LIPSCOMB:  Yes.
 18                 SENATOR ORTIZ:  Any other names that stand out 
 19  that had that duty in your mind that didn't perform?
 20                 DR. LIPSCOMB:  Dr. Cygan in his letter mentioned 
 21  several, but I'm just flipping through his letter to try to find 
 22  out specifically.
 23                 He mentioned Dr. David Imagawa, and Dr. Sean Cao.  
 24  He also mentioned that they were planning on contacting Dr. 
 25  Marquis Hart.  And he mentioned another doctor, as I said in my 
 26  testimony, who stayed for a short period of time in 2002, Dr. 
 27  Anthony Savo, S-a-v-o.
 28                 SENATOR ORTIZ:  In your opinion, those were the 
0016
 01  key people that had the duty to provide that critical 
 02  information and did not do so, either on their own departures or 
 03  others'?
 04                 DR. LIPSCOMB:  That's correct.
 05                 SENATOR ORTIZ:  Let me ask you this. And I have 
 06  to say, you're kind of the hero in all of this, doing the right 
 07  thing, and assessing sort of the irregularities in the program.
 08                 The Department of Health Services licenses 
 09  hospitals.  Is there any regulatory activity that has occurred 
 10  in the licensing program as a result of problems with the liver 
 11  transplant program?  Are there new regulations, or new checks 
 12  and balances that have been put in place to catch this kind of a 
 13  problem in a more timely manner?
 14                 DR. LIPSCOMB:  I wasn't directly involved in the 
 15  licensing issues, but there are some regulations that would 
 16  allow the department to license kidney transplant centers, but 
 17  nothing specific to any of the other organs.
 18                 The usual manner of handling this is, if our 
 19  Licensing and Certification Division receives a complaint, then 
 20  they investigate the complaint.
 21                 SENATOR ORTIZ:  So, we haven't put any new regs 
 22  in place for the liver transplant program that might catch this 
 23  in a more timely manner?
 24                 DR. LIPSCOMB:  No.
 25                 SENATOR ORTIZ:  Well, let me ask again of my 
 26  colleagues.  Mr. Maldonado.
 27                 SENATOR MALDONADO:  Just brief, Senator Cox.
 28                 Why don't you think you were notified?
0017
 01                 DR. LIPSCOMB:  I don't know.  I honestly don't 
 02  know.
 03                 SENATOR MALDONADO:  Why were you not notified? 
 04  You don't know.
 05                 DR. LIPSCOMB:  No, I don't.
 06                 When a facility -- well, let me back up.  The 
 07  usual process for certifying facilities is that the facility 
 08  performs a certain number of transplants per year for two years, 
 09  and then they notify the department that they've done that.  The 
 10  Department then reviews that information and usually conducts a 
 11  site visit at the facility to determine and assure the 
 12  department that the statements they made in their application 
 13  letter are true.
 14                 Part of those criteria are that if you have any 
 15  significant changes in your program, that you're supposed to 
 16  notify us.  We don't have the staff to continually do that, and 
 17  check behind them to make sure that they've done that.  We 
 18  assume that these are honorable facilities, and that they're 
 19  going to let us know, but sometimes they don't.
 20                 So in this particular case, I don't know why they 
 21  didn't.
 22                 SENATOR MALDONADO:  So in essence, the policy 
 23  requires them to tell you, but they just didn't tell you?
 24                 DR. LIPSCOMB:  That's correct.
 25                 SENATOR MALDONADO:  Thank you.
 26                 SENATOR ORTIZ:  I know Senator Cox has a 
 27  question, but let me just make it very clear.  You have 
 28  jurisdiction to regulate or to license kidney transplant centers 
0018
 01  but not liver transplant centers.
 02                 DR. LIPSCOMB:  To license them, yeah.  The 
 03  licensing does have the authority to license them as an acute 
 04  care facility, but not specifically as a transplant facility.
 05                 SENATOR ORTIZ:  That appears to be a regulatory 
 06  gap at least within the department, even though you indeed 
 07  oversee Medi-Cal compliance with a liver transplant, which 
 08  centers we saw here.
 09                 DR. LIPSCOMB:  Yes, but within California, the 
 10  Centers for Medicare and Medicaid Services conduct those kinds 
 11  of reviews, and our Licensing and Certification Division staff 
 12  piggy-back on those reviews.  So, there's no regulation within 
 13  California that requires California to do that, but a 
 14  nationally -- the Centers of the CMS is doing that.
 15                 SENATOR ORTIZ:  Okay.  I appreciate that 
 16  clarification.
 17                 Senator Cox.
 18                 SENATOR COX:  Dr. Lipscomb, thank you very much 
 19  for coming today.
 20                 I'm not so much interested in who was at fault.  
 21  What I'm really interested in is better understanding the 
 22  process.  So, you may have answered the questions I have when 
 23  you responded to Senator Maldonado, but I do in fact want to ask 
 24  you again, it was a situation that your department, or someone 
 25  in your department, sent a letter asking them what the 
 26  irregularities were?
 27                 DR. LIPSCOMB:  Yes, I did.
 28                 SENATOR COX:  You sent the letter?
0019
 01                 DR. LIPSCOMB:  I sent the letter.
 02                 SENATOR COX:  And they sent you a letter back 
 03  which met your requirements, and you were satisfied with the 
 04  responses?
 05                 DR. LIPSCOMB:  No, actually we weren't.  They 
 06  told us of the changes that had happened in their staffing, but 
 07  our main concern at that time was that they weren't doing enough 
 08  transplants.  Volume is important in terms of proficiency.  If 
 09  you don't do enough, you can't become proficient at doing 
 10  transplants of anything.
 11                 SENATOR COX:  Let me just understand the process.
 12                 So, you sent a letter.  Did someone in your 
 13  department, or did you pick up the phone and say to them, 
 14  "What's going on here?  What's happening?  How come we've got 
 15  this kind of problem?"
 16                 DR. LIPSCOMB:  I did that after my first letter, 
 17  yes.  I contacted Dr. Cygan and spoke with him.  I asked him 
 18  specifically what was going on.
 19                 SENATOR COX:  And were you satisfied with his 
 20  response at the time?
 21                 DR. LIPSCOMB:  No.
 22                 SENATOR COX:  Tell me what you did after that.
 23                 DR. LIPSCOMB:  We basically waited for them to 
 24  respond to our letter and give us a plan of how they were going 
 25  to correct the deficiencies.  And basically the deficiencies 
 26  were in the numbers of transplants that they were doing.
 27                 I'm not sure that we were so concerned about 
 28  their survival rate, but again, volume is important in terms of 
0020
 01  relative proficiency to do these procedures.
 02                 SENATOR COX:  And is it a situation where you've 
 03  indicated you don't believe that you have the time to provide 
 04  the supervision or the follow-up in these kinds of situations?  
 05  Is it expertise or is it dollars?
 06                 DR. LIPSCOMB:  Staffing, staffing.
 07                 SENATOR COX:  So, if you had the money, you could 
 08  in fact acquire the staffing?
 09                 DR. LIPSCOMB:  Yes.
 10                 SENATOR COX:  Is there a red light, a siren, that 
 11  goes off in your department?  If this were to happen in some 
 12  other university and you found similar circumstances, would you 
 13  have changed your procedure, or have you changed your procedure 
 14  as to what you do relative to this kind of event?
 15                 DR. LIPSCOMB:  Other than looking at the national 
 16  data more frequently than we have been in the past, no, we 
 17  haven't made any other changes.
 18                 SENATOR COX:  Do we know whether or not there are 
 19  any other universities, or are any of the universities that were 
 20  mentioned having similar kinds of problems?
 21                 DR. LIPSCOMB:  Not necessarily university.
 22                 Well, we -- we were aware of a problem with UCI 
 23  with their bone marrow transplant program earlier than the liver 
 24  transplant program.  And actually in 2001 or 2002, I sent a 
 25  separate letter to UCI's bone marrow transplant program to 
 26  indicate the same thing, basically our concerns about, you know, 
 27  their lack of numbers.
 28                 SENATOR COX:  One of the things that occurs to 
0021
 01  me, Dr. Lipscomb, and I'm just thinking out loud here, and that 
 02  is that perhaps we need some sort of system, that when you find 
 03  that something is not going right, that you run up the flags.  
 04  And as opposed to writing letters, there is a team.  The team 
 05  moves in on the premise; takes whatever steps are necessary to 
 06  take charge, to in fact be certain that you can eliminate the 
 07  problems which have occurred, and to the extent possible, 
 08  prevent any additional problems.
 09                 Does that make any sense?
 10                 DR. LIPSCOMB:  Yes, it does, Senator.  And I 
 11  agree with you.  And I believe we're working on that now.  As a 
 12  matter of fact, we are considering whether or not the department 
 13  should routinely notify Medicare when we have problems with 
 14  hospitals in California as far as transplant issues are 
 15  concerned.
 16                 Our programs are somewhat different, in that 
 17  Medi-Cal develops its own medical policy criteria separate from 
 18  Medicare. Medicare is more reactionary in that they won't 
 19  investigate a facility unless there's been a complaint.  Whereas 
 20  Medi-Cal, in addition to requiring that a facility perform a 
 21  certain number of transplants in order to become certified as a 
 22  Center of Excellence, we also require that in each case they are 
 23  requesting a transplant, that we're reviewing that information 
 24  on that specific patient.
 25                 So, we have a check and balance in the sense that 
 26  we require prior authorization, and at least we're looking at 
 27  each facility each time they submit a request for a specific 
 28  transplant.
0022
 01                 SENATOR COX:  Thank you.
 02                 SENATOR ORTIZ:  Thank you.
 03                 SENATOR MALDONADO:  One more question.
 04                 SENATOR ORTIZ:  Senator Maldonado.
 05                 SENATOR MALDONADO:  Doctor, you said you sent 
 06  them a letter on the liver transplant, and you send them a 
 07  letter on bone marrow.
 08                 What else have you sent them a letter on that 
 09  you've seen problems with at UCI?  
 10                 DR. LIPSCOMB:  I don't think that we've sent them 
 11  a letter on anything else other than those two issues.
 12                 SENATOR MALDONADO:  Okay.
 13                 SENATOR ORTIZ:  Did the department in the past do 
 14  anything, even prior to your role, with UCI at the Reproductive 
 15  Health doctors situation at UCI In 1995?
 16                 DR. LIPSCOMB:  Not that I'm aware of, no.
 17                 SENATOR MALDONADO:  I forgot.  I have one more 
 18  question.
 19                 SENATOR ORTIZ:  All right, certainly.
 20                 SENATOR MALDONADO:  Doctor Lipscomb, I'm trying 
 21  to figure this one out here.
 22                 What would be to their advantage by them not 
 23  telling you what's going on over there at UCI?  What is the 
 24  benefit to them, to the UCI?  Can you explain that to me, please?
 25                 DR. LIPSCOMB:  I can't see any benefit of that.  
 26  Each center knows that in order for them to get approval for 
 27  each transplant, that they have to abide by the rules.  If 
 28  they're not abiding by the rules, it's quite likely that they 
0023
 01  won't get any treatment authorization requests approved.
 02                 So, it's to their benefit to play by the rules.  
 03  And if they're not playing by the rules, they risk not getting 
 04  authorizations.
 05                 So, I don't see that there's anything good that 
 06  comes --
 07                 SENATOR MALDONADO:  But if they're playing by the 
 08  rules, Doctor, they're not telling you what they're doing.
 09                 DR. LIPSCOMB:  That's correct.
 10                 SENATOR MALDONADO:  So, how are they playing by 
 11  the rules?
 12                 DR. LIPSCOMB:  Well, they're not.
 13                 SENATOR ORTIZ:  Let me thank you, Doctor, for 
 14  your testimony and, I think, your response to this to the best 
 15  of your abilities and oversight.  But for some of the work that 
 16  you did, and some of the inquiries and requests you made, we 
 17  might not have discovered many of these inaccuracies, actually 
 18  what appear to be significant errors that resulted in deaths.
 19                 So, let me just thank you for your time and your 
 20  commitment.
 21                 Are there any closing comments you'd like to 
 22  provide the Committee?
 23                 DR. LIPSCOMB:  No, I don't have any.
 24                 SENATOR ORTIZ:  Is there a chance that we could 
 25  get a copy of your written testimony for the Members of this 
 26  Committee?
 27                 DR. LIPSCOMB:  Yes.
 28                 SENATOR ORTIZ:  We'll have the sergeants gather 
0024
 01  that, or staff pick that up, and we can have copies made and, if 
 02  necessary, returned to you with your notes.
 03                 So, thank you for your time.  I do appreciate 
 04  it.  Perhaps if you do have time, you're welcome to stay in the 
 05  audience.  When Senator Romero joins us, maybe she'll have 
 06  questions for you.
 07                 Let me now move into our next panel.  There will 
 08  be a representative of the Review Committee that was appointed 
 09  by Chancellor Drake to evaluate the liver transplant program.  
 10  And that next panel, Members, according to the agenda is:  The 
 11  findings of the independent review committee that was convened 
 12  to evaluate the liver transplant program.
 13                 We have one witness, I believe, Kenneth Janda.  
 14  If Mr. Janda is here, I'd invite you to come forward.
 15                 Let me let Members know that you have a copy of 
 16  that independent report in your packet, as well as a summary of 
 17  that report that has been compiled.  There are two documents in 
 18  your packet, Members:  "The Special Report on the University of 
 19  California at Irvine Liver Transplant Program," as well as a 
 20  Summary of Issues that is in your packet that was put together 
 21  by this Committee to guide you through that report.
 22                 Let me now welcome Dr. Janda and ask you to 
 23  introduce yourself to the Committee and then begin your 
 24  testimony.  Welcome.
 25                 DR. JANDA:  Thank you.
 26                 My name is Kenneth C. Janda.  I'm a Professor of 
 27  Chemistry in the School of -- 
 28                 SENATOR ORTIZ:  How do you pronounce your name?
0025
 01                 DR. JANDA:  I say Jan-da.  It's not necessarily 
 02  the proper pronunciation.
 03                 I'm a Professor of Chemistry in the School of 
 04  Physical Sciences at the University of the California Irvine, 
 05  and also Chair of the Irvine Academic Senate, the organization 
 06  by which the faculty participates in shared governance of the 
 07  University.  I represent 1,385 UCI faculty members.  We 
 08  determine the University's curriculum, regularly advise 
 09  Chancellor Drake regarding faculty and student welfare, 
 10  personnel evaluation, and space and budget planning.
 11                 Because Chancellor Drake respects shared 
 12  governance, he selected me as Senate Chair to represent the 
 13  voice of the faculty on the Liver Transplant Program Review 
 14  Committee.  The committee had four additional members:  former 
 15  University of California Regent Meredith Khachigian; and three 
 16  prominent medical doctors who have held senior medical school 
 17  management positions and have provided medical leadership on a 
 18  national level, Dr. Haile Debas, Dr. Kenneth Shine, and Steven 
 19  Wartman.
 20                 The committee's charge was to provide guidance 
 21  and consultation to Chancellor Drake concerning the causes that 
 22  led to the closure of the liver transplant program.  We were 
 23  asked to review management practices, organization structure, 
 24  and culture and communications at the medical center and make 
 25  specific recommendations for actions to be taken to improve 
 26  oversight of clinical programs.  Chancellor Drake indicated 
 27  clearly that he was interested in the unvarnished truth.  After 
 28  that, he stood back and let the committee determine the agenda 
0026
 01  of the investigation.
 02                 The committee met under the direction of the UC 
 03  General Counsel's office, which allowed witnesses to speak 
 04  candidly with us.  We received administrative support for all 
 05  our meetings, and we were unrestricted with regard to whom we 
 06  could speak and the information we could request.  To gain 
 07  specific knowledge beyond that of the committee members and UCI 
 08  witnesses, we interviewed the leader of a large successful 
 09  transplant program and also a prominent medical ethicist.
 10                 Although time was of the essence because we had 
 11  only 90 days to complete our investigation and report, and 
 12  although the issues involved were very complex, the expertise on 
 13  the committee allowed us to come to unambiguous conclusions 
 14  regarding the core issues.
 15                 As the report states, UCI Medical Center has 
 16  significant problems related to its history, its patient 
 17  demographics, and its small size.  The medical center is 
 18  underfunded for the mission it has taken on.  The ethnic and 
 19  economic diversity of its patient base offers unique challenges.
 20                 One such challenge to the liver transplant 
 21  program was the UCI patient population, consisting of very small 
 22  average patient size, given the high percentage of Southeast 
 23  Asian and Hispanic patients served by the hospital.  As one 
 24  anecdotal example, the committee learned of one Vietnamese 
 25  patient weighing only 97 pounds.  The program had to turn down 
 26  40 organs before one of appropriate size was obtained.  We 
 27  learned that many UCI patients were in fact competing for 
 28  pediatric organs, which are more scarce than adult organs.  This 
0027
 01  does not excuse the failure of the program, but it provides one 
 02  example of the difficulties it faced.
 03                 In addition to endorsing Chancellor Drake's 
 04  decision to shut down the liver transplant program, the 
 05  committee made eight detailed recommendations for improving 
 06  UCIMC performance:  recruit new health sciences executive 
 07  leadership accountable directly to the Chancellor; strengthen 
 08  School of Medicine oversight; establish and maintain clear 
 09  reporting lines for all clinical programs; develop a new 
 10  strategic plan for UCI health sciences; conduct a review of all 
 11  clinical programs; ensure rigorous quality assurance procedures 
 12  for all clinical programs; ensure that capital plans are based 
 13  on academic plans and goals; and review the School of Medicine 
 14  faculty practice plan.
 15                 If you have any questions about the report or the 
 16  recommendation that the review committee made, I'd be happy to 
 17  answer them at this time.
 18                 SENATOR ORTIZ:  Thank you.
 19                 Let me extend again an opportunity to my 
 20  colleagues, if they have questions, to weigh in first, and I'll 
 21  hold my questions until after they raise their questions.
 22                 Senator Maldonado.
 23                 SENATOR MALDONADO:  Dr. Janda, you mentioned one 
 24  example of a failure.  Can you give us another one or two 
 25  examples of failures?
 26                 MR. BLAIR:  For the record, my name is Jeff 
 27  Blair.  I'm counsel to the Regents.  B-l-a-i-r.
 28                 I would ask, Senator Maldonado, that we recall 
0028
 01  Chair Ortiz's admonition about the limited scope of this 
 02  informational hearing.
 03                 Given the litigation and the DOJ subpoena, I 
 04  would ask the Committee's indulgence that if there were other 
 05  examples that were reflected in the nonprivileged report, that 
 06  is over 25 pages that you have before you, that Dr. Janda refer 
 07  to those.
 08                 Beyond that, I would ask the Committee's 
 09  indulgence, and specifically Senator Maldonado, that we do not 
 10  ask Mr. Janda to disclose information other than that, given the 
 11  sensitivities that we all know exist.
 12                 DR. JANDA:  If you're asking about specific -- 
 13                 SENATOR MALDONADO:  No, I think what I'm asking 
 14  is, I think you made your point very clear, that the Vietnamese 
 15  person weighed 97 pounds, which in fact was competing with 
 16  organs that deal with children, and it's harder to get 
 17  children's organs.  I can understand that, Doctor.
 18                 I think my question was pretty simple.  Is there 
 19  any other example that you can give to this Committee besides 
 20  that one?  Because if that's the only problem, then I think we 
 21  can move on to another witness.
 22                 SENATOR ORTIZ:  Well, I have a few questions.  
 23  Let's see what he can respond to.
 24                 DR. JANDA:  I don't have all the examples even 
 25  memorized.  In general, we did not deal with specific examples 
 26  of patient care.  We dealt with the overall picture.
 27                 This was used as one example of the type of 
 28  problem the medical center faced, but we did not go over them 
0029
 01  one by one and look at them in any detail.
 02                 SENATOR MALDONADO:  Thank you.
 03                 SENATOR ORTIZ:  Senator Cox.
 04                 SENATOR COX:  Madame Chair, let me just follow up 
 05  on Senator Maldonado's request.
 06                 With respect to your academic oversight 
 07  committee, did you find any evidence that there had been a 
 08  cover-up, that there had been a withholding of information?      
 09                 DR. JANDA:  The report clearly states that at the 
 10  time of several reports, the regulatory agencies, the review 
 11  committee felt the information provided was not complete and 
 12  could have been misleading.
 13                 SENATOR COX:  I appreciate the fact that it is in 
 14  the report.  I just want it on the record.
 15                 Thank you.
 16                 SENATOR ORTIZ:  Let me weigh in on a couple of 
 17  things.
 18                 And let me remind Members, the public document 
 19  that is before you that starts on Page 14 regarding the 
 20  findings, I think are on the public record and are probably 
 21  appropriately within the limited scope of the hearing.
 22                 MR. BLAIR:  I would agree, Senator Ortiz.  Thank 
 23  you.
 24                 SENATOR ORTIZ:  So that, actually, I think, 
 25  outlines some of the key points that are appropriate for 
 26  inquiry.  To the degree we can get further clarification and 
 27  explanation of them before being admonished by counsel, that's 
 28  kind of where we should focus our inquiries.
0030
 01                 I know that Senator Romero has joined and 
 02  probably wants to do an opening comment, but let me just at 
 03  least raise a couple of questions for you to think about you.  
 04  You don't need to answer until she does her opening comments.
 05                 The series of questions that I am going to ask 
 06  are really along the lines of what appear to be some of the 
 07  findings that suggest there was an absence of clear reporting 
 08  lines, and the absence of strong management oversight. They may 
 09  go to Point Three on the Findings, as well as Point Two.
 10                 So, let me ask you to think about a response to 
 11  that.
 12                 I think the thing that is really alarming was the 
 13  Point Four of the Findings of the report:  the responsiveness to 
 14  external regulatory agencies was slow and incomplete.  You go on 
 15  to show specific dates.  July 2003, there was a site review of 
 16  the program, and recommendations were made.  Among these were 
 17  recommendations for a multi-disciplinary process for transplant 
 18  candidate selection, et cetera.  You go on to note that in 
 19  September of 2003, there was a benchmarking project.  And then 
 20  again in July 2005, CMS conducted an audit.  And all of those 
 21  unfortunately late actions, I think, one would think that 
 22  shouldn't have to be given those kinds of directions on how to 
 23  conduct a program of such significance.
 24                 So, let me allow Senator Romero to weigh in, but 
 25  I'm going to go back at the appropriate time to ask specifically 
 26  Points Two, Three and Four of your Findings that start on Page 
 27  14.  So, if you could prepare yourself for that as Senator 
 28  Romero weighs in her welcome comments.
0031
 01                 SENATOR ROMERO:  Thank you very much, Senator 
 02  Ortiz, again too for responding to the request to host this 
 03  hearing today.
 04                 I'd like to begin by apologizing.  My flight was 
 05  actually delayed, so I was able to make it here at this point 
 06  and look forward to participating in these hearings.
 07                 I guess I could begin by saying, here we go 
 08  again, but I think we already know that.  There is much to 
 09  cover.
 10                 Once again, I've been rather amazed that policies 
 11  are in place, but it seems in yet another venue in another 
 12  field, policies are almost as though they're words on a page, 
 13  not to be dealt with.
 14                 So, this is a very serious issue.  We could even 
 15  say it's a life and death issue, and it's one that has taken on 
 16  a great deal of concern by family members, by patients, not to 
 17  mention taxpayers who pay the price for the product and the 
 18  standards that we hold high in the University of California.
 19                  I'd like to thank my colleague, Senator 
 20  Maldonado, for having been really a leader, I think, in this 
 21  area.  It's been I can't say quite a pleasure to join with him 
 22  in trying to uncover this, but it's been necessary collaborative 
 23  work.
 24                 I will say no more.  There is much to testify to.  
 25  But the only thing that I can say is, I read through the 
 26  materials.  It just struck me, because I thought, weren't we 
 27  just there, when I would hear over and over, we knew but we did 
 28  nothing?  And the "we" was the leadership of the University of 
0032
 01  California.  It wasn't the taxpayers; it wasn't the students.
 02                 So, here we go again.  Give me your best shot.  
 03  My hope is that perhaps this time, the University of California 
 04  leadership, and the Regents, and those who represent them will 
 05  know we're not stopping.  We're coming at you over and over 
 06  until finally, perhaps, something will be changed.
 07                 Having said that, I look forward to the remainder 
 08  of your testimony.
 09                 SENATOR MALDONADO:  I think our Chairwoman 
 10  stepped out for a second.
 11                 Were you completed, Dr. Janda, with your 
 12  statement?
 13                 DR. JANDA:  I finished my statement, yes.
 14                 SENATOR MALDONADO:  Senator Cox, did you have a 
 15  question?
 16                 SENATOR COX:  I think the Chairperson had asked 
 17  that the gentlemen communicate or comment on certain areas, 
 18  starting on Page 14, Two, Three, and Four, and Five, I believe 
 19  was her request.
 20                 SENATOR MALDONADO:  That is correct.
 21                 DR. JANDA:  So, Item Two had to do with the 
 22  reporting structures in the medical school, between the medical 
 23  school and the hospital.  And there clearly was too much of a 
 24  disconnect between the two groups of people, and that's 
 25  enunciated on Page 14 of the report.
 26                 The report points out that although the CEO of 
 27  the hospital and the Dean of the medical school had a close 
 28  personal relationship, that didn't always extend to the people 
0033
 01  below them.  And because they had that close relationship, they 
 02  didn't always realize that it didn't extend to the people below 
 03  them.
 04                 The failure of leadership and accountability, 
 05  Item Three, perhaps the most alarming thing, as stated in the 
 06  report, was the disconnect at the chair level.  So, when we 
 07  interviewed chairs of the various departments at the medical 
 08  school, they seemed to know rather little about the details of 
 09  the problem we were dealing with, and we were quite surprised by 
 10  that.
 11                 Problem Four is something you've already gone 
 12  into with the previous witness, and the report noticed that 
 13  also, that the responsiveness to the regulatory agencies were 
 14  not as forthcoming as they should have been, and that's 
 15  enunciated I think rather clearly in the report.  In fact, the 
 16  report says that the communication was not wholly accurate and 
 17  likely was misleading.
 18                 Item Five has to do with the way the quality 
 19  assurance was done, and basically as it states in the report, 
 20  the quality assurance was not done in a way that really fit the 
 21  problem.  So, there were actual communication problems in the 
 22  quality assurance also.  That quality assurance being done from 
 23  one direction didn't always fit the quality assurance coming 
 24  from other directions.
 25                 SENATOR ORTIZ:  On that point, may I interrupt 
 26  you.
 27                 DR. JANDA:  Sure.
 28                 SENATOR ORTIZ:  On Point Five, who was the chief 
0034
 01  medical officer at the time that the quality assurance 
 02  procedures, the one that was directed by the chief medical 
 03  officer mentioned in your findings, who was chief medical 
 04  officer at that time?
 05                 DR. JANDA:  The chief medical officer was Eugene 
 06  Spiritus.
 07                 SENATOR ORTIZ:  How do you spell that last name?
 08                 DR. JANDA:  S-p-i-r-i-t-u-s.
 09                 SENATOR ORTIZ:  And who were the key program 
 10  faculty and staff that are referenced in that same point?  
 11                 We'll give your counsel time to look at that 
 12  while I raise a few other questions.
 13                 You go on to say -- 
 14                 DR. JANDA:  Well, in terms of accepting or 
 15  rejecting organs, the key program people are the actual 
 16  surgeons.  So, that would be Dr. Cao, Dr. Imagawa, and Dr. Hart.
 17                 SENATOR ORTIZ:  Dr. Hart, Dr. Cao, Dr. Imagawa.
 18                 Who was the chair of surgery, the former chair of 
 19  surgery that's referenced in that second paragraph on Point 
 20  Five?
 21                 DR. JANDA:  His name is Samuel Wilson.
 22                 SENATOR ORTIZ:  I can spend a bit of time on 
 23  these, unless my colleagues want to weigh in.  This is really 
 24  the heart of the problems that were raised by this panel 
 25  review.
 26                 Where are Dr. Cao and Imagawa today?
 27                 DR. JANDA:  I am not absolutely sure.  Dr. Cao, I 
 28  believe, is in private practice in the City of West Minister.  
0035
 01  Dr. Imagawa what is still a surgeon at UCI Medical Center.
 02                 SENATOR ORTIZ:  Under which department?  Where at 
 03  UCI is he a surgeon?
 04                 DR. JANDA:  Presumably he's in the Department of 
 05  Surgery.  I don't know that for a fact.
 06                 SENATOR ORTIZ:  But not operating within the 
 07  transplant program?
 08                 DR. JANDA:  He no longer has any administrative 
 09  responsibility.  I mean, everything I know, he's an excellent 
 10  surgeon.
 11                 SENATOR ORTIZ:  Let me hold off on my questions 
 12  and see if there's any other questions from Committee Members.  
 13  I mean, this is the meat of the independent review that was 
 14  done.
 15                 Some would argue not so independent, so just for 
 16  the record, can you clarify or share with the Committee once 
 17  again?  You did in your opening comment, but I think a little 
 18  more specifically, you are UC staff that reviewed this.  You are 
 19  a member of the UC staff?
 20                 DR. JANDA:  Yes.
 21                 So, I would say the review was independent in the 
 22  sense that none of the five members of the committee had 
 23  anything to gain by not being truthful, and nothing to lose if 
 24  there were complete -- 
 25                 SENATOR ORTIZ:  Were they all University of 
 26  California staff -- 
 27                 DR. JANDA:  I was the only member of the 
 28  University of California on the review committee.  There was a 
0036
 01  former member.  Oh, excuse me, I'm sorry.  Haile Debas is a 
 02  member of UC San Francisco Medical School, and Kenneth Shine 
 03  used to be at UCLA.  So, there are University of California 
 04  connections, but I would say none of them had anything to gain 
 05  by any kind of withholding of information or not looking in 
 06  depth.
 07                 SENATOR ORTIZ:  But they are part of the UC 
 08  system.  I think it's a fairly objective, solid, credible 
 09  report.  I don't want to presume that their findings were in any 
 10  way not independent.  It's a pretty great first start.
 11                 But for the record, I think we should just 
 12  acknowledge that many of them were UC affiliated, even if 
 13  they're not UC Irvine affiliated.  So, that would draw in the 
 14  question of whether it's truly as independent as it could have 
 15  been, is my opinion.
 16                 Senator Romero, did you have some further 
 17  questions for this witness, since he is sort of the person on 
 18  this report that I think raises some significant concerns.  I 
 19  wish we had a bit more time.  I know we're short on time, and 
 20  you were called to put for this Committee on a short notice, and 
 21  I think you've done a great job.  But there will probably be an 
 22  opportunity in the future to come back and try to do this either 
 23  under another chair, or probably someone in the Legislature will 
 24  want to do this.
 25                 If there are no further questions from the 
 26  Committee Members for this witness, let me just thank you for 
 27  your time.  I appreciate it.
 28                 Again, Members, I remind you the report is here 
0037
 01  as well as the findings, sort of a summary of those findings.  
 02  And I am sure Dr. Janda is going to be more than willing, with 
 03  counsel, to answer any subsequent questions that may arise from 
 04  this hearing.
 05                 Thank you.
 06                 Let's go ahead and move into the third part of 
 07  the policy panel, Item Four on the agenda, which is, of course, 
 08  calling the administrators forward from UCI.  Let's ask Dr. 
 09  Michael Drake to come forward and introduce himself to the 
 10  Committee, as well as Thomas Cesario.
 11                 And we'll review in this panel the problems and 
 12  challenges facing the University of California Irvine medical 
 13  programs.
 14                 Let me remind you, and my staff reminds me, that 
 15  we gave each of the witnesses five minutes each.  Then I'm sure 
 16  there'll be questions from Committee Members.
 17                 Welcome.  If you want to introduce yourselves for 
 18  record, I'd appreciate that.
 19                 DR. DRAKE:  Hello.  I'm Michael Drake.  I'm the 
 20  Chancellor of the University of California at Irvine.  Thank 
 21  you.
 22                 I do have a statement that I'll read, then I'm 
 23  happy to answer questions that you may have.
 24                 Thank you for this opportunity to update you on 
 25  the progress we have made to date, the definitive actions we 
 26  have taken, and some of the steps still ahead as we move to 
 27  further improve patient care, to live our values, and to build 
 28  an exemplary community-based health system and academic medical 
0038
 01  center at the University of California Irvine.
 02                 SENATOR ORTIZ:  Dr. Drake, let me interrupt you.
 03                 I neglected to do some housekeeping.  I 
 04  apologize.
 05                 My staff informs me that for Members of the 
 06  Committee that we did in fact order sandwiches.  And I didn't 
 07  know that so I grabbed some yogurt, but sandwiches will be 
 08  coming in, in case you're interested in lunch.
 09                 I'm sorry, but important things have to be 
 10  handled.
 11                 DR. DRAKE:  I understand.
 12                 It's been my stated goal since the time I arrived 
 13  at the University of California Irvine, and I will accept 
 14  nothing less than our collective best effort.  This has been 
 15  true for my entire 35-year medical career, and it remains true 
 16  today.  This is a new era for the UCI Medical Center, and we 
 17  embrace this opportunity with enthusiasm, determination, and our 
 18  full commitment.
 19                 I was extremely disappointed and disturbed to 
 20  learn about the issues with UCI Medical Center's liver 
 21  transplant program last November.  My diagnosis was that we had 
 22  communications breakdown, a lack of accountability, and a 
 23  failure to adhere to our values.
 24                 SENATOR ROMERO:  Could you repeat that, please?   
 25                 DR. DRAKE:  Yes.  My diagnosis was that we had a 
 26  communications breakdown, a lack of accountability, and a 
 27  failure to adhere to our values.
 28                 SENATOR ROMERO:  One more time, can you repeat 
0039
 01  that, please?
 02                 DR. DRAKE:  I'll say it slowly.  That had we had 
 03  a failure of communications, a lack of accountability, and a 
 04  failure to adhere to our values.  That was straight-forward and 
 05  clear.
 06                 SENATOR ORTIZ:  Let's have the witness continue.
 07                 DR. DRAKE:  This is intolerable.  We must 
 08  communicate openly.  We must adhere to our values, and we must 
 09  and will be held accountable.
 10                 I'm fully aware of the administrative, 
 11  structural, cultural, and oversight issues that underlie both 
 12  current and past problems, and we are moving forward on several 
 13  fronts to ensure the continual improvement of our health care 
 14  programs and an unparalleled standard of patient care.
 15                 Upon learning in the Los Angeles Times article on 
 16  November 10th, 2005, about problems with the liver transplant 
 17  program, we began an immediate and aggressive series of 
 18  corrective actions, including:  I closed the program within two 
 19  hours and instructed staff to aggressively contact all patients 
 20  on our liver transplant list to ensure their safety and initiate 
 21  the transition processes to other programs.  We successfully 
 22  contacted 99 of the 105 listed patients or their family members 
 23  within 24 hours, and by the November 21st, the six remaining 
 24  patients were contacted by phone.  Two hospitalized patients 
 25  were transferred to other transplant centers, and registered 
 26  letters were sent to all patients, including medical release 
 27  information and a list of Southern California transplant 
 28  centers.  Currently all patients have been transitioned to other 
0040
 01  centers.
 02                 We consulted with key opinion leaders and the 
 03  University of California Regents.
 04                 On November 14th, I appointed a blue-ribbon 
 05  committee of nationally prominent experts to conduct a thorough 
 06  independent review of the events, including management 
 07  oversight, organizational and cultural issues, leading to the 
 08  liver transplant program's closure.
 09                 Committee members included:  Meredith Khachigian, 
 10  who was the chair of the committee and former chair of the UC 
 11  Board of Regents and chair of the Regents Health Services 
 12  Committee; Haile Debas, Executive Director of the Global Health
 13  Sciences, and Chancellor and Dean Emeritus of the University of 
 14  California, San Francisco and one of the most respected surgeons 
 15  in the United States; Steven Wartman, the President of the 
 16  Association of Academic Health Centers and former Executive Vice 
 17  President for Academic and Health Affairs and Dean of the School 
 18  of Medicine and Professor of Medicine at the University of Texas 
 19  in San Antonio; and Kenneth Shine, the Executive Vice Chancellor 
 20  for Health Affairs for the University of Texas system and the 
 21  President Emeritus of the Institute of Medicine of the National 
 22  Academies.  Finally, we had Ken Janda, who you just heard from, 
 23  who is the Professor of Chemistry, appointed because he was 
 24  Chair of the UC Irvine division of the Academic Senate.  An 
 25  ethicist and a transplant expert also consulted the committee.
 26                 On November 16th, we placed UCI Medical Center 
 27  Director, or CEO Ralph Cygan, on administrative investigatory 
 28  leave.  We transitioned School of Medicine Dean Thomas Cesario 
0041
 01  from the Medical School to spend most of his time now at the UCI 
 02  Medical Center to work closely with department chairs on 
 03  critical patient issues.
 04                 On November 19th, we convened a meeting of UCI 
 05  health sciences leaders to identify and prioritize areas with 
 06  clinical concerns, and to develop action plans for each, 
 07  including peer and external reviews.
 08                 During November and in early December, we 
 09  terminated agreements with Doctors Marquis Hart, liver 
 10  transplant director, and Dr. Khanna, who was the associate 
 11  director who provided services to UCI transplant programs.
 12                 On December 23rd, we requested the UC Office of 
 13  General Counsel to conduct an investigation of issues 
 14  surrounding representations made to the United Network for Organ 
 15  Sharing.
 16                 On January 31st, we received that report and 
 17  initiated a series of personnel actions, including accepting the 
 18  resignation of medical center director Cygan, and removing 
 19  oversight responsibilities from certain other individuals, and 
 20  entering -- excuse me -- issuing letters of reprimand.
 21                 Between December of 2005 and February 2006, we 
 22  were visited by state and federal -- excuse me -- we visited 
 23  state and federal legislative offices.  And I went to 
 24  Washington, D.C., to meet with leadership at the Centers for 
 25  Medicaid and Medicare Services.
 26                 We welcomed audits and reviews from numerous 
 27  regional, state, and federal agencies, including The Centers for 
 28  Medicaid and Medicare Services, the California Department of 
0042
 01  Health Services, the Food and Drug Administration, the Joint 
 02  Commission on Accreditation of Healthcare Organizations, and 
 03  UNOS that could help us better understand the genesis of past 
 04  issues and provide useful information on areas needing 
 05  improvement.  In fact, both UNOS and JCAHO lauded UCI for our 
 06  level of cooperation with these reviews.
 07                 On February the 16th, we received the blue-ribbon 
 08  committee report and began immediate implementation of 
 09  recommendations, including:  announcing the creation of a new 
 10  position, Vice Chancellor for Health Affairs and Dean of the 
 11  Medical School that will report directly to the Chancellor's 
 12  Office and oversee both the Medical Center and the School of 
 13  Medicine; we formed a search committee, and that national search 
 14  is currently under way with interviews expected to take place 
 15  this summer.
 16                 We appointed a full-time acting umbudsperson at 
 17  UCI Medical Center to ensure that Medical Center faculty and 
 18  staff could more easily report existing problems or concern.  
 19  And we initiated a national search for a full-time ombudsperson, 
 20  and that's currently in progress, who will report directly to 
 21  the Chancellor's Office.
 22                 We met with the Director of Vanderbilt 
 23  University's Center for Better Health to develop an intensive 
 24  strategic planning exercise for the School of Medicine that will 
 25  take place in July of 2006.
 26                 We formed several committees of nationally 
 27  prominent external experts, along with senior administrators at 
 28  the University, to undertake systematic review of UCI Medical 
0043
 01  Center's 19 clinical programs, identify vulnerabilities, and 
 02  make recommendations for closing the gap between current and 
 03  best practices.  Six reviews are currently scheduled, and all 
 04  will be completed within twelve months.
 05                 We formed an executive management committee 
 06  composed of senior representatives of the School of Medicine and 
 07  the Medical Center to ensure continuing momentum of  health 
 08  sciences activities and initiatives until the new Vice 
 09  Chancellor is on board.
 10                 We requested that the Office of Equal Opportunity 
 11  and Diversity investigate a series of claims of nepotism.
 12                 We made several presentations to the UCI Board of 
 13  Regents on broad issues related to liver transplantation 
 14  programs and other areas of focus.
 15                 We appointed renowned trauma surgeon, Dr. David 
 16  Hoyt as the John E. Connolly, M.D., Chair of Surgery.  We 
 17  appointed Dr. Craig V. Smith Associate Clinical Professor of 
 18  Surgery for Transplants, effective June 1st.
 19                 And we communicated openly, internally and 
 20  externally, about issues and progress through print, broadcast, 
 21  and web-based media.  I've met with more than two dozen civic 
 22  groups.  There've been on last count over 240 articles in the 
 23  newspapers about this.  I've been on television and on the 
 24  radio.
 25                 We've made extraordinary progress; however, our 
 26  work is not yet complete.  In regard to liver transplant program 
 27  related litigation, each case is being evaluated individually.  
 28  Our goal is expeditiously resolve those with merit, and we will 
0044
 01  continue to review, correct, and reevaluate all of our clinical 
 02  programs to ensure continual improvement in the quality of 
 03  patient care.  We will adhere to our values:  integrity and 
 04  veracity, respect, intellectual vigor, commitment, empathy, and 
 05  appreciation for others.  And we will persevere in our efforts 
 06  to further enhance the quality of life in our community.
 07                 I'm happy to answer any questions you may have.
 08                 SENATOR ORTIZ:  You went over, actually, a 
 09  significant amount of time that I didn't catch.  I want to make 
 10  sure we have the five minutes for Dr. Cesario.
 11                 DR. DRAKE:  Happy to go on to that.
 12                 SENATOR ORTIZ:  Then we'll hold off on questions. 
 13                 You may introduce yourself to the Committee.
 14                 DR. CESARIO:  Thank you, Senator Ortiz.
 15                 I'm Dr. Thomas Cesario.  I'm the Dean of the 
 16  School of Medicine, and I'm pleased to have an opportunity to 
 17  come before you this afternoon.  Thank you for your interest in 
 18  the program and for your interest in developing further policies 
 19  and procedures at the University of California to ensure that it 
 20  will contribute to the success of the State of California in the 
 21  future.
 22                 I had a prepared statement, but in consideration 
 23  for all of you and the time, I felt perhaps it was better if I 
 24  didn't deliver that statement.  Give you a chance to ask 
 25  questions.
 26                 SENATOR ORTIZ:  Is that written and available for 
 27  the Committee, for us to review?
 28                 DR. CESARIO:  Yes, that certainly can be made 
0045
 01  available.
 02                 SENATOR ORTIZ:  Do you have it available?  Do you 
 03  have the statement, Dr. Cesario.
 04                 DR. CESARIO:  Yes.  I will provide it when I 
 05  return to my briefcase.
 06                 SENATOR ORTIZ:  Maybe your attorney has it so we 
 07  can get it copied.
 08                 I prefer Members to be able to review it as 
 09  you're giving your testimony, and perhaps that'll raise 
 10  questions.
 11                 Can we get it now and have it made available?
 12                 DR. CESARIO:  Sure.  And I hope, Senator Ortiz, 
 13  by not reading it, it will just afford you more time.
 14                 SENATOR ORTIZ:  Right, but I do want my 
 15  colleagues to be able to review the written statement, and that 
 16  may structure some of their questions beyond your testimony.
 17                  So, we'll start your five minutes now.  Go 
 18  ahead.  You may begin with your verbal statement.
 19                 DR. CESARIO:  Oh, I was offering to defer my 
 20  verbal statement in the interest of giving time to the Committee 
 21  to answer questions.
 22                 SENATOR ORTIZ:  All right.  Well, let me ask my 
 23  colleagues, who would like to begin with this witness?
 24                  SENATOR MALDONADO:  I'd like to ask Chancellor 
 25  Drake a couple of questions.
 26                 SENATOR ORTIZ:  We'll open it up to questions of 
 27  either of the two witnesses.  Thank you for reminding me.
 28                 SENATOR MALDONADO:  Why does this keep happening, 
0046
 01  Chancellor Drake?  I'm trying to get a feel of why this 
 02  continues to happen.
 03                 DR. DRAKE:  I would say that the most important 
 04  thing for our organization to continue to remember is that we 
 05  have to -- that our values have to drive our every decision.  
 06  That's for every faculty member, every student, every person 
 07  who's working at any place in our university.
 08                 And when we have a circumstance where -- that 
 09  those values don't drive every decision, we can find ourselves 
 10  outside the realm of where our own values would tell us that we 
 11  want to be. 
 12                 And so, I think that what we've seen is a 
 13  breakdown in values.
 14                 I'd say another thing that was important that I 
 15  mentioned at the beginning, that I told you was astounding and 
 16  disappointing to me is that there was a real failure to 
 17  communicate.  There was a failure to communicate among the 
 18  faculty and staff at the medical center, and the failure to 
 19  communicate with me.
 20                 I learned about this, as you know, in the 
 21  newspaper, the same as everyone else did, and that was 
 22  unacceptable for two reasons.  One, it simply showed that we 
 23  weren't communicating effectively within our organizations, and 
 24  I would have wanted to be able to know about this sooner so that 
 25  I could do something to try to get the right thing going more 
 26  quickly.
 27                 That being said, we will reinforce this as our 
 28  culture moves forward.
0047
 01                 Let me say something else, if I may.  Each of the 
 02  circumstances mentioned is a bit different.  And there's a story 
 03  that you've heard, I'm going to guess, of two people walking 
 04  down by the side of a river.  They see a person floating down 
 05  the river, struggling.  And one of the people jumps in and pulls 
 06  the person out.  And then they walk down a little bit further, 
 07  and another person comes struggling down the river.  The same 
 08  person jumps in again and pulls that person out.  And then, lo 
 09  and behold, five minutes later a third person comes down the 
 10  river, and the same person, who is now wet, jumps in the river 
 11  again and looks back to his friend and says, "Why aren't you 
 12  jumping here to help me?"  And when he looks back, he sees the 
 13  friend running back up the pathway, saying, "Rather than jump in 
 14  to try to pull that person out, I want to go and see who's 
 15  throwing these people in."
 16                 I think that what we instructed our group to do, 
 17  and why we appointed the blue-ribbon panel to have people of 
 18  such broad national stature and experience is, I want to make 
 19  sure that we could get to the bedrock of the things that allowed 
 20  these lapses to happen so that we could, however they might be 
 21  different, never have anything like this happen again.
 22                 SENATOR MALDONADO:  You're saying that it's 
 23  communications, Mr. Chancellor?
 24                 DR. DRAKE:  I think communications is one serious 
 25  issue.  And I think that we're doing everything we can to 
 26  improve communications.  I think if you were on the ground 
 27  there, you'd find there's been a change in the freedom we have 
 28  to communicate things, particularly things that we're worried 
0048
 01  about.  We have to empower people to say, "Gee, this is 
 02  something that I don't think is going right," rather than say, 
 03  "Gee, I don't want anybody to know about this."  And I think 
 04  that's moving forward.
 05                 And then I think we have to be a values-based 
 06  organization.  I delivered the convocation to the freshmen 
 07  students in September, two months before this all hit, and the 
 08  central theme of my convocation was that it was important for 
 09  our university to be a values-based enterprise.
 10                 I think this is another example of when we don't 
 11  adhere to our values, we find ourselves in places we don't want 
 12  to be, doing things we don't want to do.
 13                 SENATOR MALDONADO:  So do you feel that the 
 14  communication effort has been corrected?
 15                 DR. DRAKE:  Corrected is a goal, and I would say 
 16  that nothing -- you know, perfection is what we will always seek 
 17  to achieve.
 18                 I would believe if you talked to anyone on 
 19  campus, they would feel that -- well, most people on campus 
 20  would feel the opportunity to communicate is better than it has 
 21  been.
 22                 As I mentioned, we appointed a full-time 
 23  ombudsperson to be on campus and to report directly to my 
 24  office, so that anyone who has any particular concern has an 
 25  easy way of sharing that.
 26                 And I think we're also showing people that you 
 27  get rewarded in our system for coming forward with information 
 28  that we can use to improve patient carry.  You get rewarded for 
0049
 01  living the values.  You get rewarded for helping us build our 
 02  community.  And if you don't do those things, then we will 
 03  isolate you.  And if we can't instruct you on how to do those 
 04  things, we'll move you aside.
 05                 SENATOR MALDONADO:  Chancellor Drake, I 
 06  appreciate the comment of rewarding people, and things are 
 07  getting better.
 08                 But I must tell you that it's disappointing to 
 09  hear that in your statement, Chancellor Drake, you quote by 
 10  saying, "Upon learning in the Los Angeles Times," and it just 
 11  hurts me to know and to hear that if it wasn't for a newspaper, 
 12  we wouldn't know about high executive compensation at the 
 13  University of California.  If it wasn't for another newspaper, 
 14  we wouldn't know about what's going on at UCI.
 15                 Is that just a total breakdown of communication, 
 16  as you've explained, Chancellor Drake, or is it that people 
 17  don't want to follow the rules of the University of California?  
 18                 DR. DRAKE:  You know, I speak on behalf of -- 
 19  it's hard for me to speak on behalf of people.
 20                 I would say in our circumstance, it really was a 
 21  breakdown in communications.  The issues that were being 
 22  addressed were being addressed, but they weren't being addressed 
 23  in the most effective fashion.
 24                 And as I said, it was -- it would have been 
 25  appropriate for me to have been notified sooner, let me say 
 26  there've been consequences for that.
 27                 SENATOR MALDONADO:  Dr. Cygan has resigned?       
 28                 DR. DRAKE:  Yes.
0050
 01                 SENATOR MALDONADO:  As the CEO of the medical 
 02  center.
 03                 DR. DRAKE:  Yes.
 04                 SENATOR MALDONADO:  And I've got to share with 
 05  you, Chancellor, that just dealing with the University of 
 06  California over the last seven months and longer, I think that 
 07  nobody gets let go.  It's resigned, or it's a settlement 
 08  agreement, or they're moved from one campus to another, or they 
 09  get a package.
 10                 Can you provide the details of the severance 
 11  package you all gave Dr. Cygan?
 12                 DR. DRAKE:  I can.  I'll say in this circumstance 
 13  we had, there have been several separations.  The two doctors, 
 14  Dr. Hart and Khanna, had contracts with the university that were 
 15  terminated as this happened.  The program was closed within two 
 16  hours, and we began the process of terminating those contracts.  
 17  That was taking place.
 18                 Dr. Cygan was given the option to resign from his 
 19  position.  But I'll say that option would have been open, and he 
 20  knew, for two hours before he would have been removed from his 
 21  position.
 22                 And there were no settlement terms.  Dr. Cygan is 
 23  a faculty member, and this was removing him from his 
 24  administrative role, which was the role to which is his at-will 
 25  appointment.  He was removed from that role with no 
 26  consideration.
 27                 SENATOR MALDONADO:  So, there was no severance 
 28  package for him?
0051
 01                 DR. DRAKE:  No severance package.  No 
 02  consideration.  Simply removed from the role of CEO of the 
 03  hospital.
 04                 SENATOR MALDONADO:  Who's the CEO now?            
 05                 DR. DRAKE:  The CEO is Maureen Zentner, who was 
 06  the acting CEO.
 07                 We are in the process of a recruitment for a Vice 
 08  Chancellor for Health Affairs and Dean.  That is under way, well 
 09  under way.  We're doing a national search.  We need a real 
 10  leader, and then we will, as we near the end of that search 
 11  process, we'll begin the search process for a new CEO.  We want 
 12  the new Vice Chancellor, to whom this person will report, to be 
 13  in place before we hire the new CEO, so we're trying to do those 
 14  in parallel so that we have a group of candidates for the new 
 15  Vice Chancellor to review when he or she arrives.
 16                 But we have an interim CEO and are moving well 
 17  with that.
 18                 SENATOR MALDONADO:  Madam Chair, I've got other 
 19  questions, but I'd like to just stop there and have some other 
 20  Members ask questions.
 21                 SENATOR ORTIZ:  Great.  We will have an 
 22  opportunity to come back because our remaining time that we have 
 23  left, other than public comment, really is this panel.
 24                 I have a question, but I'll hold off and extend 
 25  the opportunity to my colleagues.  Senator Cox.
 26                 SENATOR COX:  I have a question of Dr. Cesario,  
 27  if I may.
 28                 I needs to understand your timeline at the 
0052
 01  University of California Irvine.  You have been there;  you're 
 02  there now.  And you were there for what period of time?
 03                 DR. CESARIO:  I came to the University of 
 04  California in 1971 to the Irvine campus.
 05                 SENATOR COX:  So, you were really one of the very 
 06  first people there.
 07                 Now, at the time this occurred, you were the Dean 
 08  of the School of Medicine?
 09                 DR. CESARIO:  Yes, sir, I was.
 10                 SENATOR COX:  So this, for all intents and 
 11  purposes occurred on your watch?
 12                 DR. CESARIO:  It did.
 13                 SENATOR COX:  Did you agree with the faculty 
 14  report?
 15                 DR. CESARIO:  As with all faculty reports, sir, 
 16  we always respect and honor the faculty and intend to fulfill 
 17  the commitments that are made by those reports.
 18                 SENATOR COX:  In your judgment, how did this 
 19  system get the way it turned out?  Were they not reporting 
 20  directly to you?  Were they reporting through you, the 
 21  physicians?  As the Dean of the School, were you not examining 
 22  the results.
 23                 DR. CESARIO:  Perhaps I should defer the 
 24  questions related to liver transplant to Chancellor Drake, since 
 25  they involve matters of litigation.
 26                 I would only tell you that there are certain 
 27  matters that -- for which the medical school receives and files 
 28  reports.  And those have to do mainly with education and 
0053
 01  research.
 02                 Certification for clinical programs at hospital 
 03  are done through the hospital offices and not through the 
 04  medical school.
 05                 SENATOR COX:  So there would have been no way for 
 06  you to know, as Dean of the School of Medicine, of these 
 07  irregularities?
 08                 DR. DRAKE:  I'll just say two things.  Maybe I 
 09  can answer the question, Senator Cox, to make sure we're clear 
 10  about the structure.
 11                 The Medical School is in Irvine.  The hospital is 
 12  15 miles away in a different city.  And let me say, the director 
 13  of the medical school and the hospital report in parallel lines.
 14                 SENATOR COX:  So it's possible that the Dean 
 15  would not have any knowledge, then, of what's going on at one of 
 16  the other institutions?  Is that your testimony?
 17                 DR. DRAKE:  I don't know.  I'm worried about the 
 18  subpoena.  I just want to make sure, since Dr. Cesario's a 
 19  witness, and I want to -- 
 20                 SENATOR COX:  I understand.  Now Dr. Cesario, was 
 21  he subpoenaed here?
 22                 MR. BLAIR:  Senator Cox, this is Jeff Blair, 
 23  University counsel.
 24                 SENATOR ORTIZ:  A federal subpoena, as I 
 25  mentioned.
 26                 MR. BLAIR:  Perhaps I can intervene here just for 
 27  a minute.
 28                 SENATOR COX:  Let me just say to you, I'm very 
0054
 01  concerned about the aspect of providing any immunity to anyone, 
 02  so I want to be certain that I don't go beyond the bounds.
 03                 If the question is proprietary, then you need to 
 04  just tell me that, counsel, and let's be done with it.
 05                 MR. BLAIR:  Okay.  Well, I would ask then that we 
 06  respect the admonition Chair Ortiz gave about the limited scope 
 07  of this informational hearing, given the litigation and the 
 08  Department of Justice subpoena, and would indulge this Committee 
 09  that the question that was asked of Dean Cesario would begin to 
 10  intrude upon that.
 11                 SENATOR COX:  All right.  Thank you, Madam Chair.  
 12  I have no additional questions.
 13                 SENATOR ORTIZ:  I have some questions, but 
 14  Senator Romero, I will allow you to go first.
 15                 SENATOR ROMERO:  Thank you, Madam Chair.
 16                 To the Chancellor.  You became Chancellor in July 
 17  of 2005; correct?
 18                 DR. DRAKE:  Yes, I did.
 19                 SENATOR ROMERO:  At the time that you became 
 20  Chancellor, were you aware, was there any discussion, was there 
 21  any recognition or concern about the liver transplant program at 
 22  UCI?
 23                 DR. DRAKE:  No.
 24                 SENATOR ROMERO:  So, you had no awareness when 
 25  you came in?  Nobody spoke to you about it?
 26                 DR. DRAKE:  No.
 27                 SENATOR ROMERO:  You indicated that you learned 
 28  about this in the Los Angeles Times.
0055
 01                 DR. DRAKE:  Yes.
 02                 SENATOR ROMERO:  In November 2005?
 03                 DR. DRAKE:  Yes.
 04                 SENATOR ROMERO:  Much like we learned about the 
 05  excessive compensation perks policies of the UC in the San 
 06  Francisco Chronicle, I might add, but this time it's the Los 
 07  Angeles Times that breaks the story.  That's how you learned 
 08  about it; correct?
 09                 DR. DRAKE:  Yes.  Let me -- just a tiny asterisk 
 10  to make sure I'm 100 percent accurate.
 11                 I got an e-mail the night before that said that a 
 12  Los Angeles Times reporter has been asking about the liver 
 13  transplant service, but it was -- it didn't say anything more 
 14  than that.  And I didn't know even enough to get the edition of 
 15  the paper until someone asked me the next morning if I had seen 
 16  it.
 17                 SENATOR ROMERO:  My point though is that 
 18  basically it becomes the media that seems to break the scandals 
 19  that seem to characterize the University of California.
 20                 You indicated in your opening statement that 
 21  there was a failure to communicate.  There was a lack of 
 22  communication.
 23                 Can you be more specific about what is meant by a 
 24  lack of communication?
 25                 DR. DRAKE:  I would just follow with what you 
 26  have said, Senator, that I think in this particular 
 27  circumstance, the leadership of the hospital was working on 
 28  solutions to issues having to do with the liver transplant 
0056
 01  service, but that I had not been informed of that as -- in a 
 02  regular activity and something that required special attention.
 03                 SENATOR ROMERO:  But when you became Chancellor, 
 04  certainly you knew that this was a major program at the 
 05  university?
 06                 DR. DRAKE:  Yeah, I did know that.  In fact, I 
 07  had been Vice President for Health Affairs, and had known that 
 08  there was a relationship between the UC Irvine liver transplant 
 09  service and the UC San Diego liver transplant service, but only 
 10  that there was a relationship.
 11                 But let me just say something.  That the 
 12  hospital, if I can be fair about this, we have a big university.  
 13  The hospital has about 525,000 patient visits a year, and 17,000 
 14  admissions.  So, the liver transplant service, although 
 15  prominent and serious, is a small part of the overall business 
 16  of the hospital.
 17                 So, would I know about every program and whether 
 18  or not how it was doing on any given day?  Maybe not.  This one 
 19  had specific issues that should have been brought to my 
 20  attention.
 21                 SENATOR ROMERO:  There is an old adage that says, 
 22  "Don't ask; don't tell."  And if you never ask, you never find 
 23  out.
 24                 When we talk about the failure to communicate -- 
 25  which quite frankly I would assert is problematic not only at 
 26  UCI, perhaps, but a number of other campuses -- might this be 
 27  part of the problems that we simply look the other way, or we 
 28  don't bother, because your next finding is simply that there was 
0057
 01  a lack of accountability.
 02                 So, it would seem to me that part of leadership 
 03  is saying, "I want to know.  I want to know what's happening 
 04  here."
 05                 DR. DRAKE:  Yes.  And let me say, you're using my 
 06  words.
 07                 And so, what I said to the group the first day is 
 08  that a failure to communicate is intolerable, and a lack of 
 09  accountability is a thing of the past as long as I'm here.  And 
 10  I've said that multiple times to the faculty and the staff on 
 11  visits there.  And that in fact, we are reviewing every 
 12  department, so we in fact must know.  And we're moving forward 
 13  with open communication.
 14                 SENATOR ROMERO:  But we must know once we're 
 15  found out.
 16                 Now, I know the Chair has questions, but let me 
 17  just ask a couple more.
 18                 In the report it's indicated, and I believe you 
 19  stated in your opening comments, that you consulted with key 
 20  opinion leaders and UC Regents.
 21                 I want to know with whom?  Who are those key 
 22  opinion leaders, and who are those Regents with whom you 
 23  consulted, and when was this consultation, and what was the 
 24  nature of the consultation?
 25                 DR. DRAKE:  The nature of the consultation during 
 26  those first few days -- 
 27                 SENATOR ROMERO:  This was in November, when the 
 28  L.A. Times woke everybody up to the scandal.
0058
 01                 DR. DRAKE:  Yeah.  I consulted with Regent 
 02  Lansing, who's the Chair of the Regents Health Services 
 03  Committee, and -- because a Regents meeting in fact was 
 04  happening that week.  I, in fact, met with the full Board of 
 05  Regents five, six days later in Berkeley and talked about these 
 06  issues.
 07                 So, I think that's -- 
 08                 SENATOR ROMERO:  And the response?  You're 
 09  consulting.  You indicated that you consulted with.  What was 
 10  the nature of the consultation?  Are you telling them, "Watch 
 11  out, folks.  The L.A. Times is spotlighting us?"  Are you 
 12  indicating there appears to be a failure of accountability?  
 13  There appears to be something very serious, perhaps even 
 14  bordering on being criminal.
 15                 Were you looking for feedback?
 16                 DR. DRAKE:  I really, you know, I had said that 
 17  we'd had a failure to communicate, and I don't want that ever to 
 18  be associated with me.  So, I was communicating actively with 
 19  those people who I was going -- who I report with in the 
 20  leadership of the University to share information.
 21                 SENATOR ROMERO:  Was there any response from the  
 22  Regents?
 23                 DR. DRAKE:  The Regents were of course very 
 24  interested in this issue, and the same feeling that all of us 
 25  had, that this was very disappointing news, and we wanted to get 
 26  to the bottom of it.
 27                 SENATOR ROMERO:  I'm very interested, and I'm 
 28  very disappointed, but I think I'm looking for a little bit more 
0059
 01  teeth to that.
 02                 Was there any direction in terms of trying to 
 03  reclaim and move the leadership and the accountability forward?  
 04                 DR. DRAKE:  Let me say that we took direct action 
 05  right from the very time that I heard about it, Senator.  We 
 06  closed the program in two hours.  I informed them of that.
 07                 SENATOR ROMERO:  But that was before you 
 08  consulted with the Regents?
 09                 DR. DRAKE:  That was because on my watch, I said 
 10  there's a concern about patient care, and if there's a concern 
 11  about patient care, the program is closed down until I'm sure we 
 12  can go forward.  And that is the case for every program that we 
 13  have.  And I did that before I consulted anyone first.
 14                 The second thing that we did is, we contacted all 
 15  the patients because we had -- when we closed the program down, 
 16  we still have a hospital to run.  We had 105 people who were on 
 17  the list waiting.  We wanted to make sure that none of them had 
 18  a compromised or an interruption in their care.  We did that 
 19  during the first 24 hours.
 20                 SENATOR ROMERO:  Did you do that under your own 
 21  leadership?
 22                 DR. DRAKE:  Yes.
 23                 SENATOR ROMERO:  Or was that in consultation with 
 24  the UC Regents?
 25                 DR. DRAKE:  That would be mine.
 26                 SENATOR ROMERO:  So what was the timeframe 
 27  between your action -- and applaud you for that.  I think that 
 28  is decisive, and that exemplifies leadership.  I commend you for 
0060
 01  that action -- but I'm curious about the consultation with the 
 02  UC Regents.
 03                 What's the time delay between your actions -- you 
 04  said within two hours of learning, the shut down of the 
 05  program --  what's the consultation, and what's the direction 
 06  from the UC Regents?
 07                 DR. DRAKE:  I'll try to be clear, if I can.
 08                 I'm, as you know, a medical doctor.  And I in 
 09  fact was the Vice President for Health Affairs for the system 
 10  for five years.
 11                 And I would say that I when I talked to the UC 
 12  Regents, they respect my relationship with the University and my 
 13  history in leadership positions nationally.  So, they tend -- 
 14  they would in fact look to me for direction, specifically about 
 15  the proper medical steps to take, which I knew.  And I went to 
 16  them with those actions.
 17                 SENATOR ROMERO:  And when did you go?  I'm just 
 18  trying to find out what's the time delay?  Can you give me a 
 19  date?
 20                 DR. DRAKE:  Yeah.  The Regents meeting took place 
 21  on November the 16th, I think, that following Wednesday.  So, 
 22  the day -- this happened on a Thursday.  Patients contacted us,  
 23  our first order of business on Thursday night and Friday and 
 24  through the weekend.  It was a holiday weekend.
 25                 Monday I needed to put together the blue-ribbon 
 26  panel.  I called the best people I know in the world for this.  
 27  When I say that we had the former President of the Institute of 
 28  Medicine of the National Academies of Sciences, that's the most 
0061
 01  powerful voice in the United States for patient care and patient 
 02  safety, one of the leaders in the world for this.  And we pulled 
 03  those people together in one day.  That was on Monday.
 04                 And then starting probably on -- and on Tuesday 
 05  then I met with Dr. Cygan and told him that he was being placed 
 06  on leave.  So, those things all took place right away over those 
 07  first four or five days, and the next day was the Regents 
 08  meeting.
 09                 SENATOR ROMERO:  Key opinion leaders.  You 
 10  mentioned that you had consulted with key opinion leaders.
 11                 DR. DRAKE:  Yes.
 12                 SENATOR ROMERO:  Can you specify who these key 
 13  opinion leaders are?
 14                 DR. DRAKE:  Yes.  Some of the those would be the 
 15  members of the blue-ribbon panel.  And then I also talked to 
 16  people -- and I'm not going to actually remember who they all 
 17  were -- people on the faculty, and people at the medical center, 
 18  because I wanted to hear more about the milieu.  I'm the new guy 
 19  on the block, as you remember.  I'd been there for four months.
 20                 So I wanted to make sure that before -- I was 
 21  talking -- let me say that the action to put Dr. Cygan on leave, 
 22  which was front page news in Southern California, and which 
 23  generated a thousand person signature campaign for me to 
 24  reinstate him because he was the most popular person at the 
 25  hospital -- I wanted to make sure that I touched base with 
 26  people before I took such a strong action within days of 
 27  learning about this, but I felt that we needed to move forward.  
 28  I let them know that was my decision, that we were going to go 
0062
 01  forward.
 02                 SENATOR ROMERO:  Madam Chair, I have other 
 03  questions, but I know you have questions.
 04                 SENATOR ORTIZ:  Thank you, and I know Senator 
 05  Maldonado wants to weigh in again.
 06                 So, let me go to some issues that were raised.  
 07  You were quoted in a number of newspapers.  I want you to 
 08  explain to the Committee the nature of this quote.  It's been in 
 09  the public record.
 10                 You said that, "This was a failure to be 
 11  successful.  This is not an episode of wrong doing."
 12                 Is that a correct quote from you?
 13                 DR. DRAKE:  It's a paraphrase of -- 
 14                 SENATOR ORTIZ:  What was the paraphrase?
 15                 DR. DRAKE:  The paraphrase, I'll tell you what it 
 16  was.  My wife doesn't like the quote, I know.  Here's what I was 
 17  saying.
 18                 At the very beginning, on that Friday, I'll 
 19  answer the question.
 20                 SENATOR ORTIZ:  So it was a failure to be 
 21  successful but not an episode of wrong doing.
 22                 DR. DRAKE:  What I was saying, I'll explain it 
 23  directly.
 24                 In the prior issues that were raised, we had 
 25  people who were engaged in activity that was -- and I'll say 
 26  this was on the second day -- shall I wait.
 27                 SENATOR ORTIZ:  Go ahead.
 28                 SENATOR ROMERO:  We're listening.  We're 
0063
 01  listening very attentively.
 02                 DR. DRAKE:  And you'll tell her for me.
 03                 So what I was saying, that was the second day.  
 04  This was on that Friday.  And I was contrasting this particular 
 05  issue with the prior issues that had come along because the 
 06  prior issues that were being raised -- this was a newspaper 
 07  reporter asking me -- we had a fertility scandal where there 
 08  were a few individuals who fled the country to avoid 
 09  prosecution.  We had a case where there was a lone person in the 
 10  basement of the building, expropriating university property and 
 11  selling it for profit.  So, those were undercover, people who 
 12  were doing things they didn't want anybody to know about for 
 13  their own personal gain.
 14                 In the liver transplant program, actually the 
 15  program lost money.  And the problem was not that the program 
 16  was doing things it shouldn't do for profit for individuals, but 
 17  actually not doing as much as it needed to do to make sure it 
 18  was maintaining clinical proficiency.  It wasn't done under the 
 19  cloak of darkness.  It was done with many people working 
 20  together.
 21                 So, my feeling was that to approach this as one 
 22  or two bad actors whom we would pop out and everything is okay 
 23  again would be superficial and inappropriate.  We needed to look 
 24  more broadly at the cultural milieu that had allowed people who 
 25  were leaders and celebrated in the community to be involved in 
 26  something that had been so unsuccessful.
 27                 What I said further, and Senator Ortiz didn't 
 28  mention, nor did the reporter, was that when the enterprise that 
0064
 01  one is engaged in is as important as clinical care, you cannot 
 02  afford not to be successful.
 03                 So, I didn't mean that this was good, or okay, or 
 04  excusable, or all right.  I meant that it was a broader problem 
 05  in my mind, and required a much broader and deep solution.  It 
 06  wasn't simply finding the one or two bad actors and getting rid 
 07  of them.  This was, I think,  much more profound.
 08                 SENATOR ORTIZ:  If I may continue, I apologize.
 09                 You know, you probably gave an extensive, lengthy 
 10  explanation of that nonsensical statement.  Let's move on and go 
 11  to the specifics.
 12                 DR. DRAKE:  You said it was nonsensical.  I can 
 13  explain it again.
 14                 SENATOR ORTIZ:  I don't know how anyone makes 
 15  sense of, "This was a failure to be successful.  It was not --"
 16                 DR. DRAKE:  Rather than an effort to do wrong, 
 17  yes.
 18                 SENATOR ORTIZ:  Don't interrupt, please.  "It was 
 19  not an episode of wrong doing." 
 20                 You feel that there's no wrong doing that 
 21  occurred in any of these 32 lives that appear, whether or not 
 22  they're directly related, proximately caused by the negligence 
 23  of this transplant center or not.
 24                 Do you believe that that was not wrong doing?
 25                 DR. DRAKE:  What I said on this day, which was 
 26  the second day, in response to a question, was that there was a 
 27  difference between the issues with the liver transplant service 
 28  and the prior issues, where the prior issues were the fertility 
0065
 01  issue where people fled the country to avoid prosecution and 
 02  were in this for personal gain, and the cadaver issue, where 
 03  someone was working under the cloak of darkness for personal 
 04  gain.
 05                 But this was an issue where everyone wanted the 
 06  program to be successful and fell short.  I said following that, 
 07  and it was not quoted, that that was completely unacceptable, 
 08  and this was -- no one would want anything like this to happen, 
 09  but I felt that it was a broader and different issue.
 10                 SENATOR ORTIZ:  Let me get to the other questions 
 11  that I've been patiently waiting to ask.
 12                 That was an opening clarification of what I 
 13  thought was a very -- it's not fitting of someone that should be 
 14  competent to lead, I have to tell you.  And you've been before 
 15  this Committee before, and we always have a challenge with your 
 16  responses to questions that I think warrant some accountability 
 17  and responsibility for failures.  This is not the first time 
 18  You've been before this Committee.
 19                 So, I questioned whether or not there is a 
 20  problem throughout the UC system.
 21                 Let me go to the timeline of when you were 
 22  hired, and what you felt was not within your power or your 
 23  purview of knowing.
 24                 You were hired, and in July of 2005 you became 
 25  Chancellor of UCI; is that correct?
 26                 DR. DRAKE:  Yes.
 27                 SENATOR ORTIZ:  Yet in 2004, and there's a number 
 28  of things that happened prior to that regarding this program, 
0066
 01  but I think the critical dates that you should have known when 
 02  considering becoming Chancellor of UCI that encompasses a 
 03  medical school, and the hospital as well.  Just like we have the 
 04  same system here with UC Davis Medical School.  The bulk of the 
 05  campus is in the City of Davis, but the hospital is in 
 06  Sacramento.
 07                 You're charged with overseeing both the academic 
 08  as well as the hospital services.
 09                 In 2005, the United Network of Organ Sharing 
 10  moves to shut down, you know, probably a year before at least, 
 11  shut down the UCI liver transplant program.  There are 
 12  assurances by UCI that a full-time surgeon would be hired, and 
 13  thereby allaying the concerns, and the program continues.
 14                 And that goes to my question for Dr. Cesario.  
 15  Did you indeed represent that there would be a full-time surgeon 
 16  at the UCI campus?  And this was reported in the press, and I 
 17  know you're going to be admonished by your attorneys not to 
 18  state that.  It's acknowledged that in the press, there's 
 19  numerous press articles that reflect the misrepresentation.  
 20  It's in the packet there.
 21                 The L.A. Times on April 9th indicated:
 22                       "But the administrators, including 
 23                       Dr. Ralph Cygan, who was then 
 24                       chief of the medical center, and 
 25                       medical school Dean Dr. Thomas 
 26                       Cesario, falsely claimed they had 
 27                       recruited a full-time transplant 
 28                       surgeon to oversee the program.  
0067
 01                       In fact, the new surgeon, Dr. 
 02                       Marquis Hart, was based at UC San 
 03                       Diego and had offered his services 
 04                       only part time."
 05                 Let me go to Dr. Drake's questions.  So, from 
 06  2004, there was action taken that was thwarted by this alleged 
 07  misrepresentation, allegedly by Dr. Cesario.  And then in May of 
 08  2004, the Department of Health Services informs UCI that the 
 09  liver transplant program no longer meets Medi-Cal standards and 
 10  does not qualify for reimbursement.  All before your time of 
 11  being hired as Chancellor of UCI.
 12                 In July of 2004, UCSD surgeon begins on-call 
 13  coverage for transplants at UCI while based primarily at UCSD, 
 14  which he should have been at UCI, and allegedly was represented 
 15  that he was at UCI.  And then you're hired in July 2005 to 
 16  become Chancellor of UCI.
 17                 Do you believe that you should have known, or 
 18  should have inquired, or that these actions from the United 
 19  Network of Organ Sharing attempting to shut down the liver 
 20  transplant program, until the time that you became Chancellor of 
 21  UCI, that you should have known these?  Or should have been 
 22  briefed?  Or that these are reasonable things for the 
 23  Legislature to assume a publicly supported and financed 
 24  institution of your caliber as a Chancellor of this should have 
 25  known? 
 26                 DR. DRAKE:  Let me say that there was a review by 
 27  UNOS in July of 2005.
 28                 SENATOR ORTIZ:  No, 2004 is when UNOS moved to 
0068
 01  shut down the UCI transplant program.  That's a year before they 
 02  moved to shut it down.
 03                 DR. DRAKE:  Let me say that then, as you state, 
 04  before I would have or should have or could have known, there 
 05  were meetings that took place during the following year.  And 
 06  then UNOS returned in the summer of 2005.
 07                 So, I did not know of any activities on the liver 
 08  transplant service before -- during the year of 2004 to 2005, 
 09  when there were activities -- 
 10                 SENATOR ORTIZ:  Do you think you should have 
 11  known?
 12                 DR. DRAKE:  No, I don't think I should have 
 13  known, actually.
 14                 SENATOR ORTIZ:  When you're considering becoming 
 15  the Chancellor of both the school, and that includes the medical 
 16  center, wouldn't you reasonably expect to have been briefed of 
 17  some critical violations of not only Medicare and Medi-Cal, but 
 18  licensing and safety issues at the hospital that you're going to 
 19  be overseeing as the Chancellor?
 20                 DR. DRAKE:  Let me say that I wish that I had 
 21  known sooner.
 22                 SENATOR ORTIZ:  So, you don't have an expectation 
 23  that somebody should have notified you?
 24                 DR. DRAKE:  I would say at the time there was a 
 25  review in July of -- let me give dates.  I'll try and answer 
 26  this.  I know that --
 27                 SENATOR ORTIZ:  I'm troubled because perhaps your 
 28  expectations of what people who are charged with this faulty 
0069
 01  chain of custody and chain of command, that you have lowered the  
 02  bar for your expectations of them as well.
 03                 DR. DRAKE:  No, I don't believe that I have.  I 
 04  would say that, first, I wish I would have known.  I've said 
 05  that many times.  I have said that many times.  I said that to 
 06  the L.A. Times.  It was quoted by them.  And I wish I had known 
 07  sooner so that I could have worked to have a better outcome.
 08                 SENATOR ORTIZ:  I want you to say, yeah, they 
 09  should have informed me, and there should not have been those 
 10  misrepresentations.
 11                 DR. DRAKE:  There should not have been 
 12  misrepresentations to the extent that there were, I'll say that.
 13                 But let me say that -- let me express what I'm 
 14  going to give as my answer, and that is that there was a review 
 15  in the summer of July -- in 2005, July, and then a letter came 
 16  in September of 2005.  And that letter was following the review, 
 17  and that is the time that I should have been informed, 
 18  absolutely.
 19                 SENATOR ORTIZ:  Let me go on to some further 
 20  questions.
 21                 Dr. Cesario, I know you're going to be admonished 
 22  by your attorney, but there are numerous press articles that 
 23  have asserted that you misrepresented.  You falsely claimed that 
 24  a full-time transplant surgeon had been hired, and that they 
 25  would be on site at UCI.  And in fact, Dr. Hart was not, and was 
 26  in fact based in UC San Diego, and was only providing services 
 27  part-time.
 28                 Can you respond to that?
0070
 01                 MR. BLAIR:  Chair Ortiz, if I might interject, as 
 02  counsel for the University and counsel for the witnesses here, 
 03  asking that question would potentially intrude upon the current 
 04  civil litigation as well as the Department of Justice 
 05  investigative subpoena.
 06                 And I would once again indulge this Committee in 
 07  requesting that Dean Cesario not answer that question under the 
 08  agreement that you articulated at the beginning of the hearing.
 09                 SENATOR ORTIZ:  Can I ask, is it your opinion 
 10  that he has not made those statements in the press and within 
 11  the public purview and waived his own limited immunity under 
 12  subpoena authority?
 13                 MR. BLAIR:  I do not believe Dean Cesario has 
 14  ever waived any privilege or immunity in any public statement 
 15  that I'm aware of.  I'm not exactly certain of the article that 
 16  you may be reading from, but I do know that the University of 
 17  California released the UCI Medical Center Liver Transplant 
 18  Program Summary of Findings related to these statements that 
 19  were made to UNOS.
 20                 And what the University has said publicly -- and 
 21  it is I believe part of the package that you have before you.  
 22  If it is not, we will make it available to you -- that the 
 23  University has concluded that the statements made by UCI 
 24  representatives at the July 21st, 2004 UNOS meeting, in 
 25  combination with the change of personnel application, and other 
 26  documentary information were not wholly accurate and likely 
 27  misled UNOS into the mistaken belief that Dr. Hart would be 
 28  working solely at UCI Medical Center and on site at UCI for 100 
0071
 01  percent of his professional activities.
 02                 The University has not articulated any specific 
 03  individual as to what they may have said or may have been aware 
 04  of.  We have described UCI representatives.
 05                 And I believe that is the appropriate scope of 
 06  response to that particular question.
 07                 SENATOR ORTIZ:  Then I will have my staff compile 
 08  the statements that are in the numerous press articles that 
 09  either quote or paraphrase Mr. Cesario's representations to UNOS 
 10  that, indeed, there would be a full-time faculty on site, and 
 11  share with counsel, because these press articles reflect at 
 12  least that it's their understanding that this misrepresentation 
 13  was made, and specifically the one that is L.A. Times, April 
 14  9th, "FBI Investigating Liver Transplant Center."  
 15                       "But the administrators, 
 16                       including Dr. Ralph Cygan, who 
 17                       was then chief of the medical 
 18                       center, and medical school Dean 
 19                       Dr. Thomas Cesario, falsely 
 20                       claimed they had recruited a 
 21                       full-time transplant surgeon to 
 22                       oversee the program.  In fact, 
 23                       the new surgeon, Dr. Marquis Hart, 
 24                       was based at UC San Diego and 
 25                       offered his services only part 
 26                       time."
 27                 Now, I understand that we cannot believe 
 28  everything we see in the press, but it was the press, not Mr. 
0072
 01  Drake or anyone within UC, that discovered the problems in this 
 02  transplant program.  It's the only source we have of this 
 03  information, unfortunately.
 04                 MR. BLAIR:  May I offer one clarifying point?
 05                 SENATOR ORTIZ:  Certainly.
 06                 MR. BLAIR:  What the University has readily 
 07  acknowledged and conceded is that Dr. Cygan, Dr. Cesario, Dr. 
 08  Hart, and the transplant administrator of UC Irvine at the time 
 09  traveled to Chicago on July 21st, 2004.  It is during that 
 10  meeting that the allegations of misrepresentations were alleged 
 11  to have made.
 12                 It is during the course of that meeting that the 
 13  University of the California issued the Summary of Findings, the 
 14  last bullet point of which I've read into the record for this 
 15  Committee.
 16                 But what the University has never articulated, 
 17  and I believe the press is mistaken to the extent they have 
 18  attributed any particular comment to Dean Cesario during the 
 19  course of that meeting.  In that regard, I think the press is 
 20  not accurate and is not reliable.
 21                 SENATOR ORTIZ:  Okay.
 22                 Then Dr. Drake, can you tell me what your 
 23  understanding is of whether or not there was a full-time faculty 
 24  at UC Irvine overseeing the transplants, if it wasn't Dr. Hart, 
 25  whether it was someone else?
 26                 MR. BLAIR:  Chair Ortiz, I'm sorry to intrude 
 27  upon this hearing.
 28                 I will simply indicate that I believe that 
0073
 01  question would squarely take it us into the admonition that you 
 02  read at the beginning of the hearing.
 03                 I should also note just for full clarification 
 04  and transparency that the issue of what is meant by "on site" at 
 05  a surgical premise is open to some discussion and will be the 
 06  subject of the civil litigation.  So, in asking Chancellor Drake 
 07  to make an opinion one way or the other in this nonprivileged 
 08  environment would potentially impact on that litigation.
 09                 SENATOR ORTIZ:  Then let me ask some things of 
 10  Dr. Cesario.  I suspect they'll be raised.  I don't think 
 11  they'll fall under the privilege.  Let's go ahead and see what 
 12  we can get out of this witness.
 13                 For Dr. Cesario, the audits and a number of 
 14  studies were done after the fertility clinic scandal, as well as 
 15  the willed body programs.
 16                 Out of audits, recommendations were made.  Is it 
 17  your understanding or recollection that those recommendations 
 18  were implemented at all, or fully, or somewhat?
 19                 DR. CESARIO:  Yes, Senator Ortiz.  My 
 20  understanding is that every one of those recommendations were 
 21  implemented, save one.
 22                 SENATOR ORTIZ:  Which was that one that was not?  
 23  Implemented.
 24                 DR. CESARIO:  That one was a request to move the 
 25  medical center from its current site in Orange to the campus in 
 26  Irvine.
 27                 SENATOR ORTIZ:  Okay.  Let me ask another.
 28                 How does someone in the medical school come 
0074
 01  forward with a problem?  There seems to be a significant number 
 02  of whistle-blower complaints, administrative appeals, which 
 03  suggest there really isn't a supportive environment or culture 
 04  of openness and free communication.
 05                 Do you have an opinion on that?
 06                 DR. CESARIO:  Senator Ortiz, since I've been the 
 07  Dean, I've had an open door policy.  And everybody on that 
 08  campus knows they can walk into my office, get an appointment, 
 09  and report a problem.  And every time a problem has been 
 10  reported to me, every time, Senator, I've taken the appropriate 
 11  action to request an investigation, either through the internal 
 12  audits, as I did when the willed body program occurred, or to 
 13  given individuals, if I thought the problem needed to be 
 14  delegated for investigation to a different person.
 15                 SENATOR ORTIZ:  So, it's not your opinion that 
 16  whistle-blowers, and those who complain, that there's not a 
 17  significant number of administrative appeals that appear to be 
 18  retaliatory to those who are whistle-blowers within the 
 19  institution?
 20                 DR. CESARIO:  We have a very strict policy, 
 21  Senator Ortiz, in the University that we can -- that does not 
 22  permit or condone retaliations.  And we have several recourses 
 23  for individuals who have complaints.  Those can be presented 
 24  either to people within the department.  They can present it to 
 25  me.  We have an official whistle-blower policy, and that is 
 26  coordinated through the office of the Executive Vice Chancellor, 
 27  or they can be coordinated through the ombudsman.
 28                 In any of those situations, any of those 
0075
 01  individuals will insure that the proper course is followed so 
 02  that we are convinced that we follow the policies of the 
 03  University.
 04                 SENATOR ORTIZ:  Okay.
 05                 I think we only have a couple of minutes left.  
 06  We did want to allow for public comment, but I know there are 
 07  Committee Members who still have further questions.
 08                 Senator Maldonado, then Senator Romero.
 09                 SENATOR MALDONADO:  This question is for 
 10  Dr. Cesario.
 11                 You were quoted as saying that aggressive steps 
 12  had been taken to improve the medical center.
 13                 DR. CESARIO:  Yes, Senator Maldonado, thank you 
 14  very much for asking that question.  I know you have great 
 15  interest in accountability, and I applaud you for that.
 16                 Many steps were taken following the fertility 
 17  crisis, which actually occurred in the late 1980s, and that was 
 18  investigated at the time I became the dean.  Those steps were 
 19  taken to ensure quality assurance at the hospital.
 20                 There were steps to revitalize and revamp the 
 21  medical policies and procedures, to revamp the medical staff 
 22  bylaws, to coordinate activities between units at the hospital.  
 23  And to my knowledge, all of those steps were undertaken and 
 24  strengthened the position of the hospital.
 25                 SENATOR MALDONADO:  Dr. Cesario, when you made 
 26  that quote, that was in 1998.
 27                 Let me share with you just briefly what has 
 28  happened since 1998.
0076
 01                 The director of UCI's willed body program was 
 02  fired because he was selling donated parts for personal 
 03  financial gain.  The United Network of Organ Sharing moved to 
 04  shut down your liver transplant program.  The state and federal 
 05  government both informed you that your liver transplant program 
 06  no longer meets the standards and does not qualify for 
 07  reimbursement.
 08                 Your liver transplant program was closed because 
 09  of mismanagement of patients, lack of staffing, and low survival 
 10  rates.  And the FBI delivered a subpoena to officials at UCI.
 11                 Are you one of the persons that delivered a 
 12  subpoena, Dr. Cesario?
 13                 DR. CESARIO:  A subpoena was not delivered to me.
 14                 SENATOR MALDONADO:  So, Dr. Cesario, do you still 
 15  stand by your quote in 1998?
 16                 DR. CESARIO:   Senator Maldonado, I would tell 
 17  you that I'm the person who fired the director of the willed 
 18  body program.  And I would also tell you that in fact it was 
 19  never clear that any body parts were sold.  We asked for 
 20  repeated investigations, including by the district attorney's 
 21  office and by many others, to ensure that that was not the case.  
 22  And it was never verified that any body parts were sold.
 23                 And as much as I would love to be able to share 
 24  with you my thoughts and opinions on the liver transplant 
 25  program, as you've heard repeatedly, I'm precluded from doing 
 26  that because of pending litigation.
 27                 SENATOR MALDONADO:  Thank you.
 28                 SENATOR ORTIZ:  Senator Romero, I know you have a 
0077
 01  closing question, but we are going to be kicked out of here any 
 02  minute now.
 03                 And I apologize that we're probably not going to 
 04  have time for public comments, but perhaps we can have another 
 05  hearing at another time.
 06                 SENATOR ROMERO:  Let me direct this question to 
 07  the Chancellor.
 08                 Chancellor, you said that you knew nothing about 
 09  this scandal, this program, until you read about it in the L.A. 
 10  Times.
 11                 Yet in 2004, both with UNOS and the Department of 
 12  Health Services essentially coming forth with some very severe 
 13  indictments about the program, you still claim that you knew 
 14  nothing.
 15                 Let me just make sure that I understand.  Before 
 16  you were appointed as Chancellor, as I understand it -- correct 
 17  me if I'm wrong -- you were in President Dynes' office; correct?
 18                 DR. DRAKE:  Yes.
 19                 SENATOR ROMERO:  You were in the President's 
 20  office?
 21                 DR. DRAKE:  Yes.
 22                 SENATOR ROMERO:  And you are heading up, as I 
 23  recall, the office for health.
 24                 DR. DRAKE:  I'll explain that.  It's straight 
 25  forward.
 26                 My -- the answer is two things.  One, I wanted to 
 27  clarify something I said to Senator Ortiz earlier.
 28                 Let me say that I wish I had known about the 
0078
 01  problems earlier.  And I should have, and wish I had been told 
 02  about them earlier.
 03                 One of the problems was, the people working on 
 04  the problems didn't really realize the full nature of it, I 
 05  would say.   And that's what I was saying.  It would have been 
 06  tough for them until they heard in September -- 
 07                 SENATOR ROMERO:  But Chancellor --
 08                 DR. DRAKE:  I'll get on to your question, if I 
 09  may.
 10                 SENATOR ORTIZ:  We're going to be moved out of 
 11  here in three minutes.
 12                 DR. DRAKE:  Okay, I'll answer quickly.
 13                 SENATOR ORTIZ:  Answer specifically.
 14                 DR. DRAKE:  So specifically, we had a division.  
 15  I was over the medical education and research.  There was 
 16  another vice president who was in charge of clinical services, 
 17  i.e., what happens at the hospitals.   So, it was not in my 
 18  purview to hear about issues like regulatory affairs or issues 
 19  that happened at the hospitals.  I was dealing with medical 
 20  students, nursing students, research programs.
 21                 SENATOR ROMERO:  Are you aware that perhaps in 
 22  our the other office, then, there was discussion about this?     
 23                 DR. DRAKE:  There could have been, but I -- 
 24                 SENATOR ROMERO:  But there's no communication, 
 25  okay.
 26                 DR. DRAKE:  There wasn't that communication.
 27                 SENATOR ROMERO:  Finally, let me just ask you, in 
 28  this report that was, of course, submitted, the Special Report, 
0079
 01  it's rather scathing.  It clearly says there was a failure of 
 02  leadership and accountability.  And this line, "No one seemed to 
 03  be accountable overall for ensuring that essential steps for 
 04  success occurred."  
 05                 There was a lack of oversight; there was a 
 06  laissez-faire attitude about the red flags.  And they will 
 07  acknowledge there's red flags, folks, but nobody seemed to care.
 08                 Let me ask you on that question, "No one seemed 
 09  to be accountable."  Chancellor, who should have been 
 10  accountable? 
 11                 DR. DRAKE:  I would say the CEO of the hospital 
 12  turned out to be accountable.  And actually, we're redoing the 
 13  structure to have now a Vice Chancellor who is in charge of both 
 14  the medical school and the hospital so there's a final common 
 15  point of responsibility, so we'll know who's accountable.
 16                 And let me then say further, Senator Romero, that 
 17  ultimately I will be accountable for what happens at the medical 
 18  center and any place on the campus.  And there needs to be one 
 19  person ultimately who knows what's happening and who's 
 20  accountable.
 21                 SENATOR ROMERO:  Chancellor, I know the time is 
 22  running out, but I would just say, I've heard that before from 
 23  the UC, "ultimately I should be responsible."  But you know 
 24  what?  It seems somehow that the responsibility never comes 
 25  down.
 26                 So, I appreciate that you're assuming the 
 27  ultimate responsibility, but from past practice and patterns in 
 28  the University of California, quite frankly, I don't have a lot 
0080
 01  of confidence or belief that accountability amounts to a hill of 
 02  beans in the University of California.
 03                 And let's move forward with the FBI.
 04                 SENATOR ORTIZ:  Let me thank my colleagues.  I 
 05  know, Senator Maldonado, you had a quick closing.
 06                 For the attorneys and for others who will follow 
 07  up on this issue, let me just refer to you, I referenced the one 
 08  L.A. Times article, but there's another one, March 24th, 2006, 
 09  where it paraphrases, maybe incorrectly.
 10                       "A group of UCI officials -- 
 11                       including medical center chief 
 12                       executive at the time, Ralph 
 13                       Cygan, and the medical school 
 14                       Dean Thomas Cesario -- told the 
 15                       United Network of Organ Sharing 
 16                       in 2004 that the hospital had 
 17                       hired Hart to serve as a 
 18                       full-time liver transplant surgeon.  
 19                       But he was based at UC San Diego 
 20                       and his contract retained him 
 21                       only for on-call service."
 22                 Let me also remind others that California Health 
 23  Line Health Care Foundation Report, February 8th of 2006 quotes, 
 24                       "An investigation by the 
 25                       University of California 
 26                       confirmed allegations that 
 27                       officials at UC Irvine Medical 
 28                       Center misled regulators about 
0081
 01                       staffing in its liver transplant 
 02                       program according to a summary 
 03                       report released on Tuesday.  The 
 04                       L.A. Times reports the hospital 
 05                       closed its liver transplant 
 06                       program after problems were 
 07                       revealed."
 08                 So, two sources that may be disputed and not 
 09  reliable.
 10                 My closing comments will precede Mr. Maldonado's.  
 11  He can do the final closing.
 12                 Let me thank you all for being here.  I wish we'd 
 13  had more time.  I think that there are good foundations for 
 14  follow-up questions.
 15                 And others who will be here far longer than I 
 16  will, the only tool we have against the University of California 
 17  is through the budget.  And we often threaten to use that sole 
 18  tool, and we rarely exercise it because there are consequences 
 19  to those who are harmed that we don't want to harm.
 20                 However, having said that, this may be one of 
 21  those rare times in which I don't have any confidence, with all 
 22  due respect, Chancellor Drake and others, that anyone is taking 
 23  responsibility for this.
 24                 There were 32 lives that were lost.  We could 
 25  argue that many of would have been lost because they were so 
 26  vulnerable.
 27                 But this report, as brief as it is, and quick 
 28  turnaround time, and with the perception that there are indeed 
0082
 01  other UC administrators and staff that were a part of compiling 
 02  this report, still creates a really strong foundation for, I 
 03  think, further questions.
 04                 And more importantly, someone's got to be 
 05  accountable for this.  This is just appalling.  And, you know, I 
 06  haven't heard anything today that suggests that anyone's taking 
 07  responsibility or acknowledging, even with the limitations of 
 08  civil and criminal pending litigation, which I respect.
 09                 However, I think there's significant information 
 10  on the record that just says, at some point we just need to say, 
 11  "Enough with the abuses of the UC system."
 12                 Senator Maldonado, you can do the final closing.
 13                 SENATOR MALDONADO:  Thank you, Madam Chair.
 14                 I just, on behalf of myself, and I think I can 
 15  speak for Senator Romero, thank you for hosting this hearing.  
 16  It's important.  I still have many, many questions that need to 
 17  be answered, to be very frank.
 18                 I just want to close with a comment to you, 
 19  Chancellor Drake.  You know, I just personally feel in my heart 
 20  that the people at UC, especially at the top, it's like a little 
 21  kingdom up there.  Nobody cares.  We're going to do what we want 
 22  to do, and if you don't like it, too bad.  And we're hiding 
 23  things, moving things here, and we're not being up-front with 
 24  people.  No accountability.  No transparency.  No disclosure.
 25                 I hope that you, Chancellor Drake, can change 
 26  some of that at your university, because I'll tell you 
 27  something, the people outside this building are demanding trust 
 28  and accountability.  I want you to know something, that as we 
0083
 01  travel the state, people come up to me all the time saying, "How 
 02  can they be doing that?  Only them can do that."
 03                 If it was me or Senator Romero, by God, they'd 
 04  ask us -- we'd be recalled.  They'd recall us.
 05                 And yet at the University of California, it's, 
 06  you know what, it's okay.
 07                 I just hope that you can change that, sir.  
 08  You've got a hard task ahead of you, and we want three things.  
 09  We want disclosure, accountability, and transparency in the best 
 10  interest of three people:  the people of California, the 
 11  students, and obviously the taxpayers, sir.
 12                 I hope that you can shed some more light on that 
 13  as this continues.
 14                 Thank you. 
 15                       [Thereupon this portion of the  
 16                       hearing by the Senate Committee 
 17                       on Health was terminated at
 18                       approximately 1:45 P.M.]
 19  --ooOoo--
 20
 21
 22
 23
 24
 25
 26
 27
 28
0084
 01  CERTIFICATE OF SHORTHAND REPORTER
 02
 03             I, EVELYN J. MIZAK, a Shorthand Reporter of the State 
 04  of California, do hereby certify:
 05             That I am a disinterested person herein; that the 
 06  foregoing transcript of the hearing of the Senate Committee on 
 07  Health was reported verbatim in shorthand by me, Evelyn J. 
 08  Mizak, and thereafter transcribed into typewriting.
 09             I further certify that I am not of counsel or 
 10  attorney for any of the parties to said hearing, nor in any way 
 11  interested in the outcome of said hearing.
 12             IN WITNESS WHEREOF, I have hereunto set my hand this 
 13  ______ day of __________________, 2006.
 14
 15
 16
 17
 17                                           _______________________
 18
 18                                           EVELYN J. MIZAK
 19                                           Shorthand Reporter       
 19
 20
 21
 22
 23
 24
 25
 26
 27
 28