Obama Camp's Many Ties To Wife's Employer

Washington Post: Michelle, Barack, David Axelrod And The University Of Chicago

(Washingtonpost.com)  This story was written by Joe Stephens.

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A few years ago, executives at the prestigious University of Chicago Medical Center were concerned that an increasing number of patients were arriving at their emergency room with what the executives considered to be non-urgent complaints. The visits were costly to the hospital, and many of the patients, coming from the surrounding South Side neighborhood, were poor and uninsured.

Michelle Obama, an executive at the medical center, launched an innovative program to steer the patients to existing neighborhood clinics to deal with their health needs.

That effort, in time, inspired a broader program the hospital now calls its Urban Health Initiative. To ensure community support, Michelle Obama and others in late 2006 recommended that the hospital hire the firm of David Axelrod, who a few months later became the chief strategist for Barack Obama's presidential campaign.

Axelrod's firm recommended an aggressive promotional effort modeled on a political campaign -- appoint a campaign manager, conduct focus groups, target messages to specific constituencies, then recruit religious leaders and other third-party "validators." They, in turn, would write and submit opinion pieces to Chicago publications.

One key recommendation from Axelrod's firm: "Respond quickly to opposition activity."

The medical center's initiative provides a window into the close relationship between the Obamas, their associates at the University of Chicago and Axelrod, the strategist most central to Barack Obama's rise. It also illustrates how that circle, and particularly Michelle, dealt with an intractable social problem that confronts many urban areas: How much care should large, nonprofit hospitals offer the poor in return for tax-exempt status?

The medical center markets its initiative as an effort to improve patient health for the poor and at the same time free its resources for emergencies and complicated procedures. The Urban Health Initiative also could save the hospital substantial amounts of money, by removing the nonpaying poor patients from its emergency room.

"An ER visit for something that's not an emergency costs the medical center $1,200," said Kelly Sullivan, a hospital spokeswoman. "That's sucking up dollars in health care that we don't all have to just blow through carelessly.

"Michelle inspired us . . . to step back and take a holistic approach to this problem."

Those involved in the effort in Chicago say that they are hopeful but that it is too soon to judge its success.

Michelle Obama and Axelrod did not respond to requests for an interview about the initiative. Axelrod's partner, Eric Sedler, confirmed his firm did the work but declined to discuss specifics. Hospital executives declined to say how much Axelrod's firm was paid.

Howard Peters of the nonprofit Illinois Hospital Association praised the medical center's efforts, saying the ER is not the place to provide patients with primary medical care.

"Patients need a source of ongoing care, and this initiative is trying to make that care available in a more appropriate setting and in a more timely way," Peters said.

Axelrod's firm warned hospital executives in its May 2007 presentation that, although many people welcomed the initiative, primary-care doctors opposed it as a break with the center's commitment to the community. Opinion research showed that a small but passionate group of people already considered the hospital to be elitist, arrogant and lacking in "cultural empathy" for the surrounding economically depressed South Side neighborhood, according to a draft report obtained by The Washington Post. Some doctors in focus groups dismissed local health clinics as "wholly inadequate."

One of the suggestions from Axelrod's firm: Change the name of the initiative.

"Internal and external respondents expressed the opinion that the word 'urban' is code for 'black' or 'black and poor,' " according to a report the firm gave the medical center on May 14, 2007. "Based on the research, consideration should be given to re-branding the initiative."

Links to University

Both Barack and Michelle Obama have worked at the University of Chicago, a financial and intellectual powerhouse with 9,500 employees and a legacy of nurturing Nobel laureates.

Barack was a part-time lecturer at the law school for more than a decade, earning as much as $69,000 a year. Michelle was the founding director of the university's community service center, working there for five years before moving to the medical center in 2001.

Shortly after Barack Obama joined the U.S. Senate in 2005, the medical center promoted Michelle Obama to vice president of community and external relations, and more than doubled her salary. She is now on leave from the $317,000-a-year post, in which she sought to bridge the gap between the wealthy institution and its poorer neighbors. The hospital declined to discuss the budget for her program or her input into budgetary decisions.

The vast majority of political contributions from university employees have gone to Democrats, and over the past nine years they have donated at least $373,000 to Barack Obama's campaigns, records show. The university's executive suites are home to a number of the couple's closest friends and financial backers.

The medical center's chairwoman, Valerie Jarrett, is a close friend and top adviser who travels frequently with Barack Obama. One of Barack's best friends, Eric Whitaker, is executive vice president at the center and is now in charge of the Urban Health Initiative. Hospital board member Kelly R. Welsh is executive vice president at Northern Trust Co., which extended the couple a $1.3 million home mortgage shortly after Barack Obama was elected to the U.S. Senate. Dan Shomon, Barack Obama's former campaign manager, is a university lobbyist. Jarrett, Whitaker, Welsh and Shomon all declined to be interviewed or did not respond to requests.

The 600-bed medical center, which has a $1.3 billion budget, has more than 700 attending physicians. The hospital is a leader in such specialties as cancer care and organ transplants, and boasts that patients travel from around the world for treatment. Its facilities feature valet parking, a meditation garden and, in some rooms, 42-inch flat-panel televisions.

Quentin Young, a local physician whose five-doctor medical office lists Barack Obama among its patients, said that in past decades the South Side often viewed the institution as a "citadel of exclusion," more interested in research than the well-being of its neighbors.

The hospital's general counsel, Susan Sher, said she approached Michelle Obama in 2001 and asked her to develop plans to bring the hospital closer to the surrounding neighborhood. Sher is a longtime friend of Michelle Obama; they worked together at Chicago City Hall, where Sher was head of Mayor Richard M. Daley's law department. Michelle Obama "grew up in this community," Sher said, adding that that makes her uniquely qualified.

"We really didn't know what this office would be, so it was really her creation," Sher said. Today, Sher said, Obama's office has grown to include more than 20 staffers and has proved a success at boosting the medical center's image.