Carilion CEO responds to questions about new construction

By Karen McNew
WSLS10 Anchor
Published: October 15, 2008

As Carilion expands, ethical questions are raised and CEO Dr. Edward Murphy responds during a one on one interview with WSLS.

Karen:  Are board members benefiting from the construction that’s going on or any future planned construction?

Dr. Murphy:  We do not have a prohibition against board members doing fair value arms length work for the system

Karen: Should there be? 

Dr. Murphy:  I think not .

He says the policy of allowing board members to do business with the company has been evaluated over the years and the stance hasn’t changed.

Virginia Tech will own the medical school building and since it’s owned by the state it is not required to pay property taxes.  The tax benefit is one that Dr. Murphy concedes the City of Roanoke was expecting.

Karen: Where does Carilion’s responsibility lie?

Dr. Murphy:  Well first of all there was no loop hole with the original… this predates me.  It is our intention to sit down with the city and work out some equitable arrangement so they get paid from us not from Virginia Tech or the med school.

Karen:  Any time line?

Dr. Murphy:  This is came up, still fairly premature.  It is still two years before the building is going to be turned over an operated.

On the topic of his multimillion dollar salary.

Karen:  There has been some criticism of that salary for being too much for a non profit hospital.. What’s your response to that?

Dr. Murphy: That is a correct accounting of my salary from the way that the tax forms require for you to account for it..

But, even after an itemized breakdown of what it includes…

Dr. Murphy:  I recognize it is a lot and I have been very fortunate but the salary isn’t set by me.

While scrutiny over Carilion’s construction and expansion continues its leader calls being the focus of some of that scrutiny an occupational hazard.