In 2018, Memorial Sloan Kettering Cancer Center's chief physician, Dr. José Baselga, back under fire for failing to disclose payments from healthcare companies in dozens of research articles he wrote.
Recent Internal Revenue Service records indicate that the nonprofit hospital Dr. Baselga paid more than $ 1.5 million in severance payments in 2018 and 2019.
The revelations about the former executive led to significant changes in Memorial Sloan Kettering's relationship with the health and pharmaceutical industries and a revision of its conflict of interest policy. The disclosure errors uncovered by the New York Times and ProPublica also led to a fuller review of how medical journals enforce their conflict of interest policies, as well as a closer look at relationships between medical researchers and nonprofit companies in cancer centers across the country.
The hospital wouldn't say if it was Dr. Baselga paid an additional severance payment in 2020. A spokeswoman said the earlier payments reflected the hospital's "contractual obligation" to Dr. Baselga as part of his employment contract.
Dr. Baselga is now an executive at pharmaceutical company AstraZeneca, where he oversees the development of its cancer drugs. He declined to speak through a company spokeswoman.
Non-profit organizations, like many of their for-profit counterparts, often sign employment contracts with top civil servants who provide compensation on their departure. And it's difficult to break those agreements except in situations like a court ruling on illegality, said Marcus S. Owens, who heads the I.R.S. Department serving nonprofits during the administration of President George H.W. Bush and Bill Clinton.
However, nonprofits are required by law to specify the nature of their senior civil servant severance pay agreements in their I.R.S. Submissions. The big payment to Dr. Baselga was noteworthy as his departure shook the institution significantly.
In the fall of 2018, Memorial Sloan Kettering's managing director, Dr. Craig B. Thompson, on staff for handling the episode, said, "The events of the past few weeks have not been treated as well as I have liked."
At the same time, the then chairman of the board, Douglas A. Warner III, despised Dr. Baselga, who also held the title of chief medical officer, said he had "pushed the boundaries" and "lifted the caveat" in doing business with for-profit companies.
Although Dr. Baselga officially resigned from his position, Warner suggested that the departure was not voluntary and said that despite Dr. Baselga's talents "left no choice".
Dr. Baselga was a noted researcher and prolific writer of medical articles. In his resignation letter, he acknowledged his mistakes and said the controversy had proven "too distracting".
Dr. Baselga also stepped down from the boards of drug maker Bristol-Myers Squibb and Varian Medical Systems, a manufacturer of radiation protection equipment, and the cancer journal, of which he was an editor.
After months of review, Memorial Sloan Kettering revised its conflict of interest policy, banning its top managers from serving on boards of drug and health care companies and setting limits on how executives and top researchers could benefit from the work developed at the institution.
As with other major hospitals, Memorial Sloan Kettering's finances took a hit during the coronavirus pandemic. The hospital recorded an operating loss of $ 453 million for the first three quarters of 2020 compared with an operating profit of nearly $ 77 million for the first nine months of 2019. The hospital saw a decline in surgeries and clinic visits as well as in clinical trials and other research. The hospital received $ 100 million in aid from coronavirus under the Aid, Aid and Economic Security Act (CARES).
Dr. Baselga wasn't the only former civil servant to receive severance pay from Memorial Sloan Kettering in 2019. He also paid Avice Meehan, the hospital's former chief communications officer, a severance payment of more than $ 250,000. Submission. Ms. Meehan declined to comment.
Laurie Styron, the executive director of CharityWatch, an independent monitoring group, said hospitals often generously compensate their employees for having to attract highly skilled and trained doctors who would be well paid elsewhere. Still, she said, donors who typically give money to support research or patient care may come as a surprise.
"The response we get from donors is negative when they hear that as a civic worker, they send everything in for a charity and then find out that someone makes millions of dollars," she said.
This article was published and written in collaboration with ProPublica, an independent journalists' organization.