Deal could save hospital money, raise profile

By Marshall Allen (contact)

Tuesday, Nov. 20, 2007 | 7:38 a.m.

University Medical Center would shed some controversy, save $290,000 a year and gain prestige in a new deal with the Nevada Cancer Institute.

The hospital would pay the research center $60,000 annually to direct its oncology-hematology department under a three-year contract that's expected to be approved today by Clark County commissioners.

That contract would follow a $350,000 deal for UMC's chief of staff, Dr. John Ellerton, whose pay and work arrangement at the hospital came under fire after a Sun report in January.

Kathy Silver, UMC's interim CEO, said the Nevada Cancer Institute was chosen primarily for the depth of knowledge and expertise provided by its physicians who treat various forms of cancer. Plus, the institute's reputation for excellence "raises the profile of our program," Silver said. This in turn could lure more paying patients to the cash-strapped public hospital, which bears the brunt of providing care to the county's uninsured and indigent patients.

Sandy Murdock, president and chief operating officer of the Nevada Cancer Institute, said that by working at UMC doctors could treat a larger segment of the population and patients who wanted those doctors wouldn't necessarily have to go to the main office in Summerlin.

The goal of the institute, which has about a dozen physicians, is to offer clinical treatment and experimental drug trials at UMC, Murdock said. In addition, the institute's doctors would be in the neighborhood of the UMC medical residents they teach through the University of Nevada School of Medicine, she said.

The new contract would be a significant savings over UMC's current deal with Ellerton, whose contract ends December 31. Ellerton was originally paid $120,000 to direct the department. But in March 2004, without the knowledge of most of his colleagues, Ellerton was given an additional $230,000 job by CEO Lacy Thomas. This one as medical director. Thomas is under criminal investigation for allegedly giving lucrative contracts to friends, and his deal with Ellerton was seen by some as an attempt to curry favor with the chief of staff.

Ellerton's medical director contract also created a conflict of interest. As chief of staff and director of the oncology department, he was supposed to represent the needs of patients and doctors in dealing with the administration. But as medical director he was part of the administration. Ellerton has maintained that he was never an administrator and that he got the salary boost solely for his oncology services.

Silver, who at the time claimed not to know the specifics of the contract between Thomas and Ellerton, did strip Ellerton of the medical director title in February. But she allowed him to keep the $230,000 pay raise, which other local oncologists called a gross overpayment. Several called for an open competition for the contract.

In February, Silver put the contract out to bid and Ellerton, Nevada Cancer Centers and the Nevada Cancer Institute submitted proposals. Nevada Cancer Centers offered to do the job for $120,000, twice what the institute bid. Ellerton continued to ask for $350,000.

It appears that Ellerton does not yet know the details of the new contract between UMC and the cancer institute.

Nancy Sterling, his public relations consultant, said in a written statement: "Despite our requests, and the fact that this contract is a public document, we have not been provided a copy so we can't yet comment on it."

Silver, the interim CEO, said the institute could take over the oncology department for less money because, like UMC, the research center is a nonprofit organization. Ellerton demanded $350,000 to direct the oncology program, she said, and the Nevada Cancer Institute does not have the same profit motive.