SAN DIEGO - What looked like a win-win proposition to UC San Diego Health System administrators has now turned into an $18 million money pit, Team 10 learned.
In early 2012, UCSDHS acquired Las Vegas-based Nevada Cancer Institute and planned to expand its own patient base with clients coming in from Nevada. UC San Diego had reason for optimism when they started out, thanks to a string of successes like the Moores Cancer Center, in their ongoing efforts at expanding cancer care across the region.
UCSDHS believed they could turn the bankrupt Nevada Cancer Institute around. When the institute launched, it seemed like the entire state of Nevada was pulling for it. The state legislature had given the institute a one-time $10 million contribution, calling it Nevada's official cancer institute.
Celebrities like Paris Hilton, Sylvester Stallone, Rod Stewart and others had headlined galas that helped raise $240 million for the institute. Nevertheless, the cancer center went bankrupt when private donations began drying up and the patient volume was low.
Still, UCSDHS thought they could turn things around and invested $18 million for the building and practices, but the effort only lasted a year.
Thomas Jackiewicz was CEO of UC San Diego Health System at the time of the deal, but he has since moved on to work at USC.
New CEO Paul Viviano decided to cut their losses and shut down the hospital. They helped relocate patients that were at the Nevada facility.
Click here to read the letter sent to patients regarding the closure
In the statement announcing the closure, UCSDHS said it was caused by problems in the real estate deal after they had paid the $18 million.
In the statement, officials said "... as the organizations prepared to finalize the transaction, Universal Health Services Inc. (UHS), who controls the building lease, invoked a real estate clause by which UHS can exclude private physician practices from providing care at NVCI."
That meant a "for profit" center could not be run on the site. UCSDHS depends on its profits, as it doesn't use taxpayer money.
The issue forced UCSDHS to close the hospital.
Team10 wanted to know if UCSDHS was aware of the lease conditions before they paid the money. While no one will comment on the record, sources with information about the negotiations in Nevada told Team 10 UCSDHS was aware of the clause from the very start, but they felt it wasn't issue at the time.
Team 10 was also told UCSDHS officials were surprised when Universal Health Services decided to exercise the "not for profit" clause which killed any chances to keep the center open.
Team 10 learned there was a possible second reason for the decision to close down the Las Vegas center. Nevada Cancer Institute CEO Heather Murren had a poor relationship with a number of doctors in the region. The Las Vegas Review reported that patients didn't come because doctors were upset by what was viewed as "bad mouthing" of their profession by Murren.
At one time, she told the paper that the care in Nevada for cancer treatment was not good. Apparently, many doctors viewed this as a personal attack of their professionalism. While the center denied the statement was never intended to insult the doctors, many apparently never forgave or forgot.
UCSDHS had done preliminary marketing and was aware there were some serious public relations issues, but felt they could overcome the bad blood with outreach into the Las Vegas medical community.
However, that didn't work, as the doctors didn't come nor did their patients.
UCSDHS might make a profit on the sale of the building, a source told Team 10.