Thursday, Feb. 8, 2007 | 7:07 a.m.
Cancer specialist Dr. John Ellerton, criticized recently for his contradictory duties at University Medical Center, would be stripped of his administrative role under a proposed new contract - but would keep the salary.
The new deal comes after the Sun revealed two weeks ago that Ellerton, while serving as chief of staff - the elected voice of doctors to UMC administrators - also was paid $230,000 as a top hospital administrator, unbeknownst to most UMC physicians.
As chief of staff, Ellerton wields influence at UMC, with duties that include leading the Medical Executive Committee, which recommends the approval of contracts and physician discipline.
His dual roles - and the attendant conflict of interest - are unheard of in the hospital community and leave many local physicians incredulous.
That shock is growing over the revelation that UMC administrators, while seeking to ease concerns about the conflict of interest, propose allowing Ellerton to continue pocketing the $230,000 salary boost that came with the administrative role that he would no longer perform.
That would make Ellerton's total yearly compensation $350,000 to run the public hospital's hematology-oncology department. Additionally, he bills UMC patients for his services and runs a private practice, Cancer Consultants. He also gets a $36,000 annual stipend as chief of staff.
Local oncologists called Ellerton's proposed compensation "outrageous," and said UMC should allow other qualified physicians to vie for the job.
"For that kind of money, there would be interest," said Dr. Heather Allen, an oncologist who formerly worked at UMC.
Ellerton's initial contract with UMC was for $120,000 a year, to run the hematology-oncology department and provide on-call services. He entered into the medical director position through a March 2004 agreement with now-fired Chief Executive Lacy Thomas.
Because UMC is a county-owned hospital, Ellerton's contract is a matter of public record, but many of his colleagues were unaware of it until it was exposed by the Sun.
When the deal became known, doctors said the two job descriptions essentially pitted Ellerton against himself.
Some suggested it made Ellerton a tool of Thomas, who was ousted last month and now is under criminal investigation for allegedly awarding associates in Chicago contracts that produced little or no work. They were especially irritated that the conflict of interest was not disclosed to UMC doctors who elected Ellerton chief of staff.
Interim Chief Executive Kathy Silver said the controversy led her to create the new contract, which removes Ellerton's hospitalwide administrative duties .
Because of the previous deal, Ellerton was unfairly seen as a voice of the administration instead of the medical staff, Silver said.
"I think certain physicians may have felt that there were barriers to their communication with the administration, and they may have felt that perhaps Dr. Ellerton was compromised," Silver said.
Ellerton did not return calls for comment for this story. He previously has denied any conflict of interest and said patient care has always been his utmost concern.
Although Ellerton's signature is on the new contract, the agreement has not yet been approved by the Clark County Commission, which may consider it at its Feb. 20 meeting.
While the proposed contract eliminates Ellerton's conflict of interest, it raises new questions about an old subject at UMC: awarding noncompetitive contracts that overpay physicians.
Hospital administrators are not legally required to seek competitive proposals for clinical services. And even though UMC loses millions of dollars a year, officials routinely forgo competition or choose against awarding contracts to the least expensive qualified physician group.
The most recent controversy involved a $5 million-a-year cardiology contract that commissioners approved for a second time Tuesday, despite the fact that another qualified group had offered to do the job for $1 million less.
Oncologist Dr. Arnold Wax said there should be competition for the Ellerton deal.
Although a friend of Ellerton, Wax called the $350,000 contract an "outrageous" waste of taxpayer money.
"That's just grotesque," Wax said. "I'm not criticizing John, I'm criticizing UMC ... They should put it out to bid. Why not? See who wants it."
Henderson lawyer Maria Nutile, who represents hundreds of doctors, said she finds it troubling that Ellerton is losing his administrative duties but keeping the money.
That means either that UMC officials did not determine the contract's fair market value with the initial $120,000 contract - or with the $350,000 proposal, she said.
"Every other chain that I know of in the valley - HCA, UHS, Catholic Healthcare West - determines fair market value before entering into contracts of this type," Nutile said.
Silver says the proposed agreement is based on fair market value. To determine the value of the contract, UMC officials relied on a survey by a medical placement company and an article in Modern Healthcare, a trade magazine.
Such literature is not an adequate analysis of fair market value for a specific contract, Nutile argued.
According to literature provided by UMC, a full-time oncologist's total annual compensation, including billing, is between $216,550 and $396,104.
But under the proposed contract, Ellerton would not pay overhead for the clinic and could bill patients on top of his hospital salary. That could add hundreds of thousands of dollars to his annual income , depending on the patient mix.
Allen said for a salary as sizable as $350,000, a doctor should allow the hospital to collect from patients.
The new contract also would require Ellerton to be on call for emergency services, but other oncologists said those instances are rare for cancer patients.
Silver said Ellerton and his partner, combined, work just more than one full-time employee would at UMC. But reached by telephone, an employee in UMC's oncology clinic said Ellerton is there only on Thursday mornings and the second Wednesday of each month. His partner works Wednesdays, the employee said. UMC officials did not return phone requests to clarify Ellerton's hours.
Three local oncologists said their primary frustration is with the poor standard of care at UMC's oncology clinic. Allen, Wax and Dr. Nafees Nagy said it often takes months to get cancer patients referred to the UMC clinic, and in that time a patient can die.
"The majority of patients are given substandard care," Nagy said.
Nagy, who has seven oncologists in his practice, Nevada Cancer Centers, said he has been trying to get contracts at UMC for years. He would be interested in making a proposal to run the oncology clinic, and guaranteed he could do it for less than $350,000.
But UMC officials never publicized Ellerton's proposed contract, and never gave any details to other oncologists in the community, Nagy said.
"It has been a clandestine business between him and the administrators at the county hospital," he said. "They have completely excluded the other physicians in the community."
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