Cancer Institute hit from all sides

The Nevada Cancer Institute, which began with the hopes of becoming another MD Anderson Cancer Center, now struggles under the weight of $100 million of debt and may need the protection of bankruptcy court to help in its reorganization efforts.

When co-founder Heather Murren and board Chairman Michael Yackira shared the institute's dire financial straits on Thursday, they were somber. They spoke as if they were sharing news that a family member has cancer.

Anyone who has been diagnosed with any form of cancer knows what that's like. Is death imminent? Can I beat it?

The same questions hold true for the shocking news that the institute is so deeply in debt that 150 employees were laid off Friday. Doctors, nurses, support staff and, yes, top flight researchers. Half the already reduced staff is gone. That's on top of 30 others laid off last month and another 50 in 2008. Where are they going to find work in this economy as they join the crowded ranks of the jobless?

Death isn't imminent for the institute, but to beat it, the institute must reorganize, restructure and narrow its focus, cutting back on research while protecting patient care. Officials are seeking partnerships to sustain the mission.

Murren, a former Wall Street stock analyst, said there is no one reason why the institute now faces a debt of $100 million; there are several.

With this economy, there are fewer government grants to support their research efforts. The insurance reimbursement rate is lower in Nevada than in other states. It's more difficult for a small enterprise less than 6 years old to sustain itself. Referrals aren't what they anticipated. While philanthropy has dropped with the recession, Murren said the institute never counted on donations to keep it operating. What about the $60 million in tax dollars the institute received? The state donated $20 million to the institute. The feds gave $40 million.

Murren said the tax dollars were mostly spent on concrete things, such as purchasing equipment to attract researchers and the buildings themselves. Some tax dollars also went to offices and educational outreach in Fallon and Elko.

The institute has three buildings at the optimistically named address of One Breakthrough Way near the 215 Beltway and Hualapai Way. The reduced staff will move into one, and Murren hopes to rent out the other two to research groups.

Tax forms for the nonprofit tell their own story. In round numbers, the institute lost $23 million in 2007. In 2008, it only lost $5 million, even though donations had dropped from $60 million to $39 million. In 2009, after salaries were cut by $4 million, the institute's loss was less than $1 million. But its liabilities had increased from $78 million to $108 million.

Murren was asked about the low insurance reimbursement rates in Nevada, where private insurance coverage is dominated by one major company, UnitedHealth Group. Does the near monopoly create those lower-than-Medicare reimbursement rates in Las Vegas?

"I happen to be one of those people who think competition is very healthy," she said with her only smile in an hour-long meeting

The institute she has worked on since 2002 now is on life support. Some will gloat about how the mighty have fallen, especially since Murren is one half of a Las Vegas power couple. She is married to MGM Resorts International boss Jim Murren, who is facing his own woes with CityCenter.

The institute has stumbled and fallen, but it's not down yet. Nobody should wish for that. The 15,000 patients treated there since 2005 and the others who may someday seek treatment at the Nevada Cancer Institute should be rooting for the reorganization to succeed.

Nobody should want cancer research or cancer treatment to fail.

Jane Ann Morrison's column appears Monday, Thursday and Saturday. E-mail her at Jane@reviewjournal.com or call (702) 383-0275. She also blogs at lvrj.com/blogs/morrison.