Repeat offenders

Genuine reform is needed to end corruption at UMC.

By Steven Miller
  • Friday, January 4, 2008

In the classic movie Groundhog Day, it takes Bill Murray's character years and years before he finally gets it right.

According to calculations by Harold Ramis, the film's director, Phil the weatherman spends about 10 years repeating the same day. In the original screenplay, that actually took thousands of years.

Phil's real problem — what keeps him in his private time loop — is himself. Basically, he's an ego-centric jerk. Egocentrism, of course, is an issue for every living human being, but Phil has it in spades.

It's only when Phil has worked through his reflexive narcissism that things really improve. First, however, he apparently has to exhaust every one of his tendencies to manipulate any situation.

This feeling of being in a time loop is something Southern Nevadans are becoming familiar with. They experience it anew every time the latest management debacle at the University Medical Center (UMC) pops up in the news.

Each time, taxpayers learn of 1) new "surprise" shortfalls, followed by 2) even bigger shortfalls revealed by outside auditors, followed by 3) fresh revelations of waste, fraud and abuse, followed by 4) the ejection of UMC executive officers.

Also each time, Clark County commissioners — who run UMC as its board of directors — proclaim themselves upset and not at all responsible for what occurs on their watch.

Close inspection of the record, however, reveals that it's the Clark County commission and the political priorities of its members that are at the heart of the mismanagement problem.

In 2001, outside auditors warned commissioners that UMC operating expenses were outpacing revenues. Nevertheless, commissioner and UMC board chairman Erin Kenney assured taxpayers that, "We do a pretty good job financially. The taxpayers should feel comfortable and confident that their money is being handled well and in a professional manner." One year later, however, another set of outside auditors revealed UMC was actually facing a $38.4 million deficit. Why? Largely because the hospital hadn't bothered to collect some $33.6 million from patients whose health insurance, Medicare or other source would have paid.

At first, county and UMC officials tried to blame the 2001 and 2002 shortfalls on a post-9/11 spike in uninsured patients. County Manager Tom Reilly, however, candidly scotched that attempt, telling the Las Vegas Review-Journal that auditor analysis showed "The problems ... could have been avoided if county officials had enacted cost controls in 2000 or 2001, when outside audits clearly showed operating revenues were dropping."

In November 2003, with much hullaballoo, county commissioners hired a new CEO for UMC — one Lacy Thomas, previously director of Chicago's John H. Stroger Jr. Hospital. Although they were plucking someone directly out of the heart of the corruption-friendly Chicago political machine of the late Cook County Board President John H. Stroger Jr., commissioners patted themselves on the back. "That was probably a very smart move," opined Commissioner Yvonne Atkinson-Gates. Other commissioners soon claimed credit for successfully resolving UMC's problems.

By January 2006, Clark County's in-house auditor, Jerry Carroll, increasingly had his doubts and began documenting his concerns with hard data. For their part, despite county staffers' concerns, commissioners allowed Thomas to not file legally required monthly financial statements throughout most of the year.

On January 17, 2007, Thomas was fired. An outside audit had finally uncovered UMC's real financial situation: A "surprising" $34.3 million shortfall over fiscal year 2006. Simultaneously, Metro police raided UMC's executive offices. A 27-page affidavit alleged that Thomas had been channeling millions of dollars from UMC to Chicago-machine chums via lush no-bid consulting contracts.

Phil the weatherman could get out of his time loop only by genuinely changing. Similarly, genuine change is the only way the recurrent management problems at UMC will ever come to an end.

That means: ending the hospital's status as a political fiefdom. Commissioners are unqualified by training — and by their priorities as politicians — to oversee such a huge enterprise.

Steven Miller is policy director at the Nevada Policy Research Institute. This commentary was first published in the January 2008 issue of the Nevada Business Journal.

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