KAKAAKO, OAHU (HawaiiNewsNow) - A University of Hawaii task force found the business plan for the troubled UH Cancer Center is "flawed and incomplete," and state taxpayers might take over the mortgage for its new building, which is costing $8 million a year.
The 124-page report released Monday was put together by UH officials who are experts in research and work outside of the center. The report said the Cancer Center's business plan is "unsustainable" because it relies on tobacco tax income that's decreasing by about 7 percent a year since fewer people are smoking.
"Finally, the university is waking up to what many of us have been saying for the last six years: that they had a flawed business plan, that there was mismanagement," said Bob Cooney, a UH faculty member who spent 25 years at the Cancer Center, seven as an associate director. "It really makes the Wonder Blunder pale in comparison. I mean there's been millions of dollars wasted over the last six years."
The UH task force found Cancer Center grant money decreased by one third in the last three years down to $20 million, while its top-level administration has been "confusing," "relatively expensive" and "top heavy" with "too many directors and associate directors." The Cancer Center was almost $10 million in the red in 2014, UH officials said.
Lynne Wilkens, a UH Cancer Center faculty member for 27 years, said, "I think the report acknowledged the importance of the Cancer Center to Hawaii and the importance of having a new director. Also, it acknowledged a lot of the administrative problems that we have."
Late last year, UH officials forced Dr. Michele Carbone to resign as Cancer Center director, and he returned to a research position there after several tumultuous years in charge during which more grievances were filed against him and his administrators than in any other unit in the 10-campus UH system. A search is under way for a new Cancer Center director.
UH Manoa Chancellor Robert Bley-Vroman, who oversees the Cancer Center, says it can't keep up with its $8 million-a-year mortgage on the new building that opened two years ago. The mortgage, officially known as debt service, must be paid for the next 25 years, UH officials said.
"We could have a reasonably viable plan for business in the center if we could figure out a way that we didn't have to worry about that debt service," Bley-Vroman said.
State Sen. Josh Green, an emergency room doctor who chairs the Senate health committee, is proposing a bailout of sorts -- for taxpayers to take over paying the debt on the Cancer Center buildings.
"We have to solve the debt problem because if we don't see a sustainable program, they're not going to be able to get the top researchers and the top studies going. And that's the only way to get those extra grants to pay for all of this," Green said.
UH is also proposing to consolidate the Cancer Center with its next-door neighbor in Kakaako, the John A. Burns School of Medicine.
"By integrating the operations there, there's significant savings to be had, as well as making things run more efficiently," Bley-Vroman, the UH Manoa chancellor said.
But no one at UH can predict even roughly how much money would be saved by merging the two entities.
Green's proposal, SB808, proposes merging the medical school and Cancer Center, and breaking them off administratively and financially from UH Manoa, which oversees both entities now.
"This is just a proposal, but I think it might be one possible answer to focus just on health sciences, as long as we can make it pencil out economically," Green said.
Cooney – who's now a professor in the Office of Public Health Studies – said, "The medical school has never had a viable business plan either. So combining two organizations with dysfunctional business plans isn't going to solve the problem."
Several other proposals before this year's Legislature are aimed at getting the Cancer Center more money, including a bill to tax e-cigarettes.
Green said lawmakers must act this year to stabilize the situation at the Cancer Center.
"They did a lot of great work in the several years, but they're not economically sustainable. And that's why they're going to have a tough time recruiting top faculty going forward," Green added.
The Cancer Center task force review also found that its consortium agreements with large hospitals such as Queens Medical Center are "ineffective and different from all other cancer centers in the United States."
The review also found that many of the center's "most productive faculty members have left and replacement has been slow," with ten faculty vacancies as of last November.
"These are challenging times for the faculty, staff and supporters of the Cancer Center," said Dr. Jerris Hedges, the interim director of the Cancer Center and dean of the medical school. "The Cancer Center is making significant contributions to the health of cancer patients and their families in Hawaii."
"The medical school will work with the Chancellor (Bley-Vroman) and President (David Lassner) to develop a plan to sustain the great work of the Cancer Center," Hedges said.