Editorial: Put contract to the test

Sunday, Feb. 11, 2007 | 7:17 a.m.

Dr. John Ellerton, a cancer specialist, has been serving in conflicting roles at University Medical Center - as chief of staff and as a top administrator.

His fellow doctors elected him chief of staff to represent them in dealings with the hospital's administration.

But three years ago Ellerton joined the administration, by way of a contract so confidential that even his friends and colleagues at the public hospital didn't know about it. When the arrangement was disclosed last month by Las Vegas Sun reporter Marshall Allen, most were dismayed.

They wondered aloud, quite rightly, how Ellerton can serve as both their representative to the administration and as a top member of it.

Ellerton's administrative contract was negotiated with then-UMC Chief Executive Lacy Thomas, who was fired last month by the Clark County manager.

Last month Ellerton told the Sun that he saw the contract as "increased compensation" for his contractual work as a cancer specialist. That increased compensation amounted to $230,000 a year.

Yet the language in the contract makes it clear that Ellerton was indeed a top administrator.

As we see it, there are at least two serious issues here.

One, Ellerton had a clear conflict of interest. Some doctors told the Sun that it made Ellerton a tool of Thomas. And two, the administration contract was added quietly, keeping other providers in the dark about the real worth of the UMC cancer contract. Had they known the contract's true value - $350,000 - they might have sought to compete for it.

Because of the Las Vegas Sun's reporting on Ellerton's dual role, and the new UMC administration's concerns about the amount of compensation for the cancer contract, interim UMC Chief Executive Kathy Silver said Friday that she plans to send out letters inviting competitive proposals for the cancer contract.

In our view, this is the proper way for UMC to handle all of its professional service contracts. Surreptitiously negotiating a second contract to achieve higher compensation for the provider is clearly wrong. The fair market value of these contracts, and the fair way to award them, can only be achieved by comparing proposals from a range of providers.