The board chairman of Detroit Medical Center, Richard Gabrys, said he will step down from the post but remain an outside director as part of a new policy to reduce conflicts of interest. Gabrys also is vice chairman of Deloitte & Touche, which has done business with DMC. In a written statement, he said, "This is a brilliant plan to assure the public that DMC's standards of management, contracting and financial structure are all in line." Under the plan, the DMC board will be composed of inside directors, such as physicians, who have direct business relationships with the medical center; outside directors, who have business or financial relationships with the system; and independent directors, who have no business or financial relationships with the DMC. The board's chairman and vice chairman must be independent directors, and the medical center's CEO may no longer serve on the board but can attend meetings.
Also today, Fitch Ratings downgraded nearly $570 million in outstanding DMC revenue bonds to B from BB+, citing "escalating operating losses, eroding liquidity" and uncertainty about the system's future. Last week, Moody's Investors Service downgraded the DMC's debt to Ba3 from Ba1 and assigned a negative outlook. -- by Mark Taylor