County taking its time to implement reform at UMC

Tony Cook and Marshall Allen

Saturday, Feb. 24, 2007 | 6:53 a.m.

Clark County Commissioner Tom Collins was not bothered by an unprecedented conflict of interest involving the chief of staff at University Medical Center - even though, as a commissioner, he oversees the struggling public hospital.

But it caused alarm in the medical community, raised suspicions of police and prompted rapid change at the hospital.

There seems to be a disconnect between community concerns about the hospital's mismanagement and the reaction of some commissioners.

Which raises the question: Are the commissioners moving fast enough to make changes at the troubled hospital?

While the commissioners believe the answer is yes, there are many signs that their pace has been sluggish.

Health care experts outside UMC say meaningful changes need to be made.

"It seems to me there would be an urgency to try to reassure the community that everything in the process is being looked at," said Larry Matheis, executive director of the Nevada State Medical Association.

Unlike Collins, the police took interest in a deal between former UMC boss Lacy Thomas and chief of staff Dr. John Ellerton.

In 2004 Thomas awarded Ellerton a $230,000 contract to become an administrator, even though he was elected chief of staff to represent the interests of doctors. Once the unusual arrangement - which had Ellerton filling two positions essentially pitting him against himself - became public knowledge, interim Chief Executive Kathy Silver removed Ellerton's administrative duties.

On Jan. 16 police raided UMC as part of an investigation into allegedly illegal contracts that Thomas gave to friends in Chicago.

A UMC doctor who was interviewed for two hours by detectives said they asked specifically about the Ellerton contract with Thomas, wondering whether it was the now-ousted CEO's attempt to buy the silence of the chief of staff.

Neither Thomas nor Ellerton has not been charged with any wrongdoing.

Although Ellerton's contract is only one of many that have exposed flaws at UMC, the commissioners are prone to reactions like the one Commissioner Bruce Woodbury had when contacted Friday.

"I wish you would find something different to talk about other than UMC," he said.

In light of the strong case that has been laid out before commissioners demonstrating a need for change, admissions like this one from Commissioner Chris Giunchigliani are as honest as they are incomprehensible: "We have not, as commissioners, sat down and had a discussion about what we are going to do to prevent this from happening again."

While some changes are being made, they are confined to doing things in the future that arguably should have been done all along.

Silver said last week that every hospital contract now will go through a formal competitive process to ensure that taxpayers get the best service for the best price.

That's a change from the way Thomas - fired in January when an audit revealed that UMC had lost $34 million in fiscal 2006, not the $19 million he had been telling county leaders for months - handled contracts. But it also is a policy already on the books. And although Thomas was the one who circumvented the competitive process when awarding contracts, county commissioners and the county manager still approved the deals.

County Manager Virginia Valentine has suggested another change: have the hospital's finance department report to the county's chief financial officer. That could prevent the hospital boss from withholding monthly financial updates from commissioners, thereby avoiding the kind of unpleasant eight-figure surprise commissioners got last month.

When Matheis heard of the proposed change, he was shocked it had not occurred before the current crisis.

"I think that's a good step," Matheis said. "I'm kind of surprised it had to be taken."

Then there's a report that commissioners received last week from the Lewin Group, an independent health care consulting firm. It concludes that if changes are not made, the hospital's already enormous annual losses could double by 2011.

The report suggests a range of possible courses, from maintaining the status quo to selling the hospital. Other options include expanding the hospital, establishing a hospital advisory board and leasing the facility to a nonprofit organization.

Collins said he has not thought much about that report, and other commissioners also have been slow to react to the report's suggestions.

"I don't think the administration at the hospital or the senior management of the county is ready to recommend anything," Commission Chairman Rory Reid said. "I am not going to be presumptuous and pick one of those options."

Some might argue, though, that the commissioners are elected to lead such reform efforts. The commissioners relied heavily on staff during the Thomas era - and that contributed to the current mess.

New Commissioner Susan Brager said a hospital board appointed by commissioners - one of the Lewin Group's proposed options - would bring much needed expertise to the hospital's oversight.

Others also are leaning toward that option, a tacit recognition that overseeing an operation as complicated as hospital administration is difficult for a part-time commission that votes on more than 100 items per meeting.

Valentine has said stabilizing hospital finances is the major immediate goal. Only this week did commissioners finally get their first accurate picture of the hospital's financial condition through December, and it was not a pleasant one. Only halfway through fiscal 2007, UMC already is $29 million in the red.

Throughout the debate on UMC, many criticisms have been lobbed at what commissioners did - or, more to the point, did not do - in overseeing the hospital in the past.

If Clark County residents are displeased with that performance, Reid notes, they can do something about it.

"People can vote for somebody else," he said.