Published Friday, Dec. 2, 2011 | 6:31 p.m.
Updated Friday, Dec. 2, 2011 | 7:04 p.m.
The Nevada Cancer Institute, whose joint mission of research and outpatient treatment was jeopardized by financial stresses, was breathed new life Friday in a deal that turns it over to the University of California, San Diego.
The sale of the cancer institute’s operations and treatment facility to the UC San Diego Health System, along with a financial restructuring that will reduce its debt by more than $50 million, will preserve its mission “and ensure that Nevadans will continue to receive comprehensive and innovative cancer care,” said Michael Yackira, chairman of institute’s board of directors.
For Heather Murren, who helped found the institute with her husband, Jim Murren, the chairman and CEO of MGM Resorts International, the announcement marks the completion of a goal, although in a different way than expected.
They hoped to establish a facility that would receive National Cancer Institute designation as a Comprehensive Cancer Center, she said. That goal seemed off track when the institute laid off nearly half its staff in April. But now, the institute will become part of the UC San Diego Moores Cancer Center, one of just 40 institutes that already have that designation.
“While the path was very different perhaps than we originally envisioned, we are very pleased that we’ll be able to offer that kind of service to the people here,” Murren said.
The institute on Friday filed for voluntary Chapter 11 bankruptcy protection, as required by the agreement approved Friday by UC officials. The sale is expected to close early next year unless another organization submits to the federal bankruptcy court a better offer for the institute’s assets.
But the institute’s creditors have signed off on the deal and have agreed to allow the institute to continue using its cash to fund operations as it proceeds with the sale. The institute has also requested that the bankruptcy court allow it to keep its current level of employee wages and benefits.
The UC San Diego Health System also includes the UC San Diego Medical Center in Hillcrest, the UC San Diego Thornton Hospital, Shiley Eye Center, Sulpizio Cardiovascular Center and other medical practices in Southern California. It is also scheduled to open the Jacobs Medical Center in La Jolla in 2016.
The sale, if approved, signals a turning point toward the positive for the institute, which was dealt a number of blows this year.
The recession lead to a significant decrease in donations, prompting the institute to lay off about half of its 330 employees in April, just a week after announcing the departure of the director and CEO, Dr. John Ruckdeschel.
After the layoffs, the institute hired experts to develop strategic alternatives and look for partners for the institute, leading to Friday’s announcement, Murren said.
The prospect of UC San Diego, one of the most respected public universities in the nation, taking over the helm of the Nevada Cancer Institute, comes after Stanford University formed an alliance with St. Rose Dominican Hospitals to create a neurology clinic in Henderson, and the groundbreaking partnership of the Cleveland Clinic with the Lou Ruvo Alzheimer's Institute to create the Cleveland Clinic Lou Ruvo Center for Brain Health, the first time that an out-of-state medical institution aligned itself with a Las Vegas health care provider.
For UC San Diego, Las Vegas is a logical partnership because of the city’s size and proximity to the university, Murren said.
“We’re very close to San Diego and there’s a lot of traffic between the two cities and the two states,” she said. “I think they see us as a logical extension of their already excellent enterprise.”
UC San Diego also opened a liver clinic in Henderson in August.
A UC San Diego spokeswoman said the university was looking forward to becoming a partner in Nevada's health care community.
"We are excited about the prospect of bringing Nevada Cancer Institute into the UC San Diego Health System family," said Jacqueline Carr. "We’ve been impressed with the facilities and quality of staff and the model of supportive care."
Fundraising has continued to be difficult since the April reorganization, Murren said, especially since there was so much uncertainty for a period of time. “But in the wake of this we are likely, I think, to see a lot of interest in the combined enterprise from a philanthropic standpoint,” she said. “People want to support something excellent.”
Murren said the institute’s operations will be controlled by UC San Diego, but the local non-profit organization will likely be reorganized so it can raise funds for the cancer program.