In a recent blog note, I discussed the abandonment of the Watson project at MD Anderson Cancer Center (see: Scandal at M.D. Anderson -- Operating Loss and Then Watson Deep-Sixed). Perhaps not too surprising now is that the president of this leading cancer hospital, Ronald DePinho, has recently resigned (see: Ronald DePinho, embattled chief of MD Anderson Cancer Center, resigns). Below is an excerpt from the article:
Dr. Ronald DePinho... resigned as president of MD Anderson Cancer Center, one of the nation’s most prestigious hospitals, after a tumultuous tenure marked by financial problems, a large layoff, and a scathing audit that raised questions about his spending practices and management. In an unusually forthcoming statement posted on MD Anderson’s website, DePinho appeared to take responsibility for the turmoil at the institution and the negative publicly it has attracted in recent months.....DePinho had been in the top job for five and a half years and had been under a particular spotlight in the past two years, as the hospital’s financial situation deteriorated.MD Anderson...posted a $267 million loss in the 2016 fiscal year and was expecting to lose as much as $450 million in 2017, though it brings in about $4 billion in annual revenue....He attracted heavy scrutiny following a recent audit by the University of Texas that raised alarms about a troubled partnership with IBM Watson to improve the precision of cancer care. The partnership, spearheaded by DePinho’s wife, Dr. Lynda Chin, was halted late last year after it failed to live up to its goals despite $62 million in spending.The audit said several contracts with IBM and a consultant, PwC, violated internal rules.
Several of the contracts were not competitively bid and went beyond the approved scope of work, and payments were made regardless of whether the services were delivered as agreed upon. Additional questions arose regarding the project’s primary financial baker, Low Taek Jho, a flamboyant Malaysian financier who is under investigation by the US Justice Department....[Q]uestions regrading the contract, and the broader financial problems at MD Anderson, have continued to bubble up in recent weeks....University of Texas Chancellor William McRaven released a one-paragraph press release praising DePinho for his work in recruiting new talent and mobilizing “MD Anderson’s quest to speed up development for new and more effective treatments.” MD Anderson has more than 21,000 employees and treats more than 120,000 patients each year.
Obviously none of this is good news for one of the most prestigious cancer hospitals in the country. Not to put too fine a point on it but the scandal seems to involve mismanagement, misappropriation of funds, poor contract management, nepotism, and perhaps cronyism/corruption. It's hard to believe that MD Anderson and the University of Texas even considered a relationship with Jho Low who is described in the first sentence of the Wikepedia as "one of the leading figures in the misappropriation of public funds." One has to certainly ask the question: what were they thinking? It will be interesting to see if the scandal spreads to IBM and PwC although I am sure that their attorneys are working dilligently to prevent such contagion. Here's a quote from my previous note in this regard:
Also causing extreme eye-rolling on my part is the $21.2M bill from PricewaterhouseCoopers for a "business plan" for the project. Why does M.D. Anderson need a multi-million dollar business plan for a scientific, oncology/genomic initiative?