UC Irvine Hospital’s Diagnosis: Denial

There seems to be one constant in UC Irvine’s medical programs: scandal.

For more than a decade, UCI officials have repeatedly ignored red flags, downplayed serious problems, misrepresented facts and punished or fired people who exposed wrongdoing, according to interviews with current and former employees, court records and UCI’s own audits. And time and again, UCI’s woes end up in headlines and in court.

“I don’t think we’re dealing with isolated problems and bad actors only,” said new UCI Chancellor Michael V. Drake, a physician who inherited the problems when he took over in July. “There are times when we have not lived up to our values.”

Drake rejected the idea that the school’s moral compass was broken, pointing to the thousands of people who had been successfully treated at the hospital and rankings that place UCI Medical Center, in Orange, among the top 100 U.S. hospitals.

“Those values are there, and those values are operative, almost always,” Drake said.

Drake’s leadership will be tested this week as a panel of experts issues its report on problems at the hospital, triggered by revelations that 32 patients died awaiting liver transplants because no full-time surgeon was on staff and viable organs were turned down.

Chancellors and administrators who came before him may have thought problems could be fixed solely by firing bad employees. Not Drake. His approach, he said, is to “take a big step back and then to look broadly” at the university as a whole. What he will find, critics say, is a university that has failed to repair its damaged core.

“We can all be forgiven for occasional lapses of judgment, but the rapidity and extensiveness of this would suggest that there’s an endemic management problem,” said Kerry Fields, who teaches business law and ethics at USC’s Marshall School of Business. “There’s just too many examples of poor ethical decision-making.”

Former internal auditor Mohamed Abo-Hebeish said UCI “has lost its conscience, its sense of social responsibility as a public institution.”

Problems in UCI’s medical programs were first exposed in 1995 when it was reported that doctors at the Center for Reproductive Health had stolen eggs and embryos from women and implanted them in other patients, several of whom gave birth.

Other problems since then have included misplaced cadavers, the sale of cadaver body parts without consent, and research violations at the Chao Cancer Clinic.

Most recently, The Times reported in November that 32 patients had died awaiting livers in 2004 and 2005, as doctors turned down organs that were successfully transplanted elsewhere. Problems also surfaced in the kidney and bone marrow transplant programs.

The fertility scandal was UCI’s costliest and most widely publicized. The university has paid $22 million in settlements to 128 fertility clinic patients, and more than two dozen cases are pending.

Whistle-blower complaints, state Senate committee hearings and internal investigations exposed UCI’s efforts to limit the investigation and punish those who reported problems. It was a pattern that would be repeated.

Whistle-blowers said they were warned not to talk publicly and threatened with dismissal.

Three whistle-blowers were paid a total of $900,000 in settlements that required them not to talk about the fertility clinic problems.

“They threatened me not to go to the federal or state government, not to go to the press,” former senior hospital administrator Debra Krahel said. “They threatened that they would sue me. They go through this pattern of alienating, discrediting, demoting and threatening you. It’s pure harassment, and they’ve done it over and over. It’s never been corrected.”

UCI’s attorneys repeatedly tried to limit investigations and public release of information, former employees said.

Andrew Yeilding, at the time UCI’s chief auditor, was widely quoted as saying that Diane Geocaris, legal counsel to the chancellor, told him he should not press doctors hard for information. Other administrators told three internal auditors not to set foot on hospital grounds -- or even exit the freeway near the Orange facility -- or they would face termination, according to depositions and interviews.

In several cases, public comments by administrators were misleading and, occasionally, false. Geocaris, who remains the chancellor’s legal counsel, urged the spokeswoman for the hospital, who later quit in frustration, to delay release of records as long as legally possible, according to reports in the Orange County Register.

University attorneys also minimized the number of victims and filed court documents that contained false information. In court documents and interviews, university officials said they were first told of allegations of egg thefts and transfers in September 1994. Further investigation and interviews with employees revealed that they had been warned two years earlier.

Geocaris declined to be interviewed for this article, as did the medical school dean, Dr. Thomas Cesario, and Dr. Ralph Cygan, who resigned last month as hospital chief executive. Former Chancellor Ralph Cicerone, who took over three years after the fertility scandal, was traveling and did not return phone calls.

In most of the scandals that have beset the university, employees who tried to uncover wrongdoing suffered consequences.

Several former employees said they had been forced to quit or were fired. Some, like Krahel, said they were labeled troublemakers, portrayed as frequent complainers or deemed substandard workers.

Lab technician Gene Ioli filed his whistle-blower complaint about research violations at the Chao Cancer Center lab in December 1996, when the hospital was still reeling from the fertility scandal. Although his complaint turned out to be true, UCI officials said that he had alerted them prematurely. They later released a memo written by Ioli’s former boss describing him as a “difficult” employee whose complaints were constant and a nuisance.

UCI auditors Robert Chatwin and Hebeish, whose jobs were to investigate complaints and scrutinize university programs, said the attitude on campus changed after the fertility scandal. The work environment evolved from “free, open and supportive” to “completely hostile and negative,” Chatwin said in a deposition as part of later litigation over UCI’s Willed Body Program.

University officials “didn’t want anything on paper,” Chatwin said. They both said Geocaris’ staff urged the audit department to stamp sensitive documents “attorney-client privilege,” even those that did not meet the legal definition, so that they would not be publicly released.

A July 1998 report issued by UCI’s Office of Equal Opportunity and Diversity found that a “lack of trust” existed between staff and upper management.

Hebeish was later fired and Chatwin was encouraged to quit, despite what they said were many positive employee reviews. Both allege in court documents that UCI failed to fully investigate later scandals and that administrators and UCI attorney Geocaris reduced their responsibilities and limited their access to employees.

In December 1996, Chatwin launched an audit of UCI Medical Center’s Organ and Tissue Bank, checking into allegations of conflicts of interest.

In a January 2005 deposition, Chatwin said he urged a full-scale investigation, but the university declined to conduct one. A May 1997 e-mail from UCI’s chief auditor at the time, Ron Stark, to Vice Chancellor Wendell Brase said that auditors would “do as little as possible,” to ensure that UCI was at low risk of exposure.

“When you find this much trouble, you ought to expand the scope of your audit, not restrict it,” Chatwin said in his deposition. “And the opposite happened. Cut back the hours, let’s get this thing out the door.”

UCI quietly closed the Organ and Tissue Bank in June 1997 without conducting a full-scale fraud investigation, according to court records. Chatwin was so angered by the final report, he asked that a memo be attached to it saying the conclusions were not his.

Likewise, Hebeish said he was not allowed to fully investigate the Willed Body Program in 1999, even though some serious lapses were discovered.

While Hebeish was uncovering problems, UC attorneys were declaring in court that the program was clean. The family of Vincent Craig filed a lawsuit alleging that the Willed Body Program had lost his body. UCI fought the lawsuit, arguing that it had acted in “good faith.” To bolster its case, it introduced as evidence affidavits containing false statements from two employees.

University lawyers failed to tell the judge about the audit or other complaints lodged regarding the Willed Body Program. The judge dismissed the case. Two weeks later, UCI held a news conference to announce the problems with the Willed Body Program. An investigation later found that of 441 cadavers donated over four years, 320 could not be identified or tracked.

UCI touted a massive overhaul of the program. It hired Iris Ingram as the administrator to provide oversight and ensure that rules were followed. But Ingram said in an interview that people resented her when she tried to enforce regulations. Once UCI was “in the clear,” she said, her position was eliminated.

After the scandal, UCI adopted the strictest guidelines of any UC donated-cadaver program.

But the university’s medical programs continued to spark controversy.

A cancer researcher, Dr. Hoda Anton-Culver, misspent as much as $2.3 million in state and federal funds on unauthorized software instead of cancer research in 2004.

The liver transplant program lost federal funding and abruptly closed in November after the revelations of the patient deaths.

UCI had ignored the warnings and tried to minimize problems. One patient, Elodie Irvine, filed a lawsuit outlining problems, and she reported her concerns to federal regulators. A transplant surgeon, Dr. Anthony Savo, and transplant coordinators also complained. Administrators transferred Savo out of the transplant program and he later left UCI.

Meanwhile, high-ranking officials, including then-hospital chief executive Cygan, misled health regulators into believing the problems were resolved, according to a UC investigation.

Other shortcomings have also been reported, including the hospital’s underperforming kidney and bone marrow transplant programs.

Doctors throughout the school are complaining of other ethical breaches. More than a dozen anesthesiologists, for example, have complained that their department is putting money before academics. And several cardiologists have reported clinical and ethical lapses to internal committees.

Fields, the USC business law and ethics professor, says UCI is looking for quick solutions and not looking deeper into the corporate culture.

He says the university needs a full-time inspector general who will review the organization top to bottom.

He said university officials are using the “moral minimum” to guide their decisions, doing only what the law compels. “It’s a very shallow application of ethical standards,” Fields said. “The law merely states what you have to do. Ethics are what you should do.”

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Times staff writer Christian Berthelsen contributed to this report.