BANGOR – Citing an unresolvable conflict of interest, directors of Eastern Maine Medical Center and trustees of its parent company Eastern Maine Healthcare have removed Bangor cardiologist Ted Silver from his 11-year position on the EMMC board.

Silver’s ouster last month is the first such expulsion from the EMMC board in the hospital’s history and triggered the resignation this week of longtime Bangor physician Thomas Palmer from the EMH board in protest.

Silver’s position as EMMC’s chief of cardiology is also in question over the same issue.

EMMC board chair George Eaton, a Bangor attorney, said the decision to expel Silver, whom he counts as a personal friend, has been very difficult. There’s no question, he said, of Silver’s dedication to EMMC and no hint of impropriety.

But Eaton said Silver’s loyalty is divided between the well-being of his own practice, Northeast Cardiology Associates, and the financial interests of the hospital. This divided loyalty constitutes what Eaton calls a “disabling competitive conflict of interest,” and he said the financial stakes are too high to tolerate.

Silver maintains his conflict of interest is of no greater magnitude than that of several other physicians and businessmen on the board. He said he is disappointed and outraged at his dismissal from the board, the more so because an attorney hired by the EMMC medical staff had not yet reviewed the conflict of interest situation.

Silver also said Wednesday that his removal from the board reflects growing tension between EMMC administrators and area physicians in private practice.

“We’re high profile and we have a lot of patients,” he said. “We really aren’t under their control, and they feel threatened.”

Northeast Cardiology, with 18 practicing cardiologists and about 100 other employees, moved last spring into a showy 28,000 square-foot office in Bangor’s Maine Business Enterprise Park, near the airport. Prior to the move, NCA was headquartered at Evergreen Woods on Mount Hope Avenue, with ancillary offices scattered around Greater Bangor. The group also serves communities in 13 hospital-based clinics in Northern Maine.

Northeast Cardiology is the only cardiology group serving the northern part of Maine, with a current client base of about 1,250 patients at the Bangor office and 200 more through the outreach clinics. Its cardiologists perform an estimated 2,000 procedures per month at the cardiac center at Eastern Maine Medical Center, and about 500 at the new catheterization lab at Saint Joseph Healthcare.

But many baseline diagnostic tests, like electrocardiograms and treadmill tests, are performed right at the Northeast Cardiology office.

“It sticks in the craw at EMMC that we don’t do all our work [at the hospital],” Silver said.

When tests are done at the hospital, the payment is split between the hospital and the practice. When they’re done at NCA, the practice gets it all.

Eaton said the tests done at EMMC by the cardiologist group have a value of about $1.65 million a year, which is equal to about 30 percent of the hospital’s operating margin.

“This is not your family doctor with an x-ray machine in the back room,” he said. “To the extent that [Silver] decides to see patients at his place instead of EMMC … he makes a lot more money.” The magnitude of the dollars at stake disqualifies Silver from serving on the board, Eaton said.

The board sought legal advice from two different firms, Eaton said. Both supported Silver’s removal in the interest of the hospital.

“Conflicts of interest are at the root of corporate corruption,” Eaton said in a Thursday afternoon interview at his Harlow Street office. Since the economic disasters of Enron and other corporate financial scandals, administrative boards everywhere are looking to tighten their standards, he said.

“Nonprofit boards have in general been more relaxed than they should have been,” said Eaton.

In addition to clarifying the mission of the governing board, Eaton said, establishing and enforcing strict guidelines for participation on a board is essential to protecting the personal assets of all members.

“When medical centers go bankrupt, or if something else goes wrong, then everyone begins to poke around looking for board impropriety. We can never predict what that will be, but if it’s found to exist, board members can be held personally liable for breaches of fiduciary duty,” Eaton said.

Eaton, who was brought onto the board and named chairman last spring when former chairman John Woodcock left to assume a federal judgeship, said Silver’s conflict of interest had been identified prior to Eaton’s arrival.

Some conflicts can be handled by asking a director to abstain from voting on relevant issues and to leave the room during sensitive discussions.

But cardiology plays such a central role in the hospital’s operations that Silver would have been out of the room more than he was in it, said Eaton. “The cardiology line of service permeates essentially every discussion,” Eaton said. The combination of cardiology’s importance in the hospital’s generation of revenues, the high-profile competitive presence of NCA in the community, and the avowed discomfort that Silver’s presence in the boardroom caused other board members, Eaton said, made it clear that “Silver is not qualified to sit on the board.”

“Could we have taken a different strategy and lived with it? Yes,” Eaton said. “But it wouldn’t be best practices.”

At a meeting in the early part of the summer, the EMMC board voted nearly unanimously that Eaton should request Silver’s resignation. When the cardiologist refused to step down, the matter was referred to the Eastern Maine Healthcare board, because the EMMC board cannot force a member to resign.

At a special meeting called in October, the 20-member EMH board voted to eject Silver. Only two board members present opposed the decision.

Silver’s position as chief of cardiology presents a similar dilemma. Eaton said Thursday it is possible the hospital will replace him with a physician employee to manage the cardiac department.

Eaton rejected allegations that Silver’s dismissal is symptomatic of a growing interest at EMMC in controlling the medical community. “There is no agenda to sideline physicians,” he said. “We are not against competition – it’s the best thing for the community,” he said.

Palmer, clearly upset over the loss of Silver from the hospital board, said he was still collecting his thoughts. He would not comment for the record other than to share his brief letter to EMH board chairman Irving Kagan.

“It is not possible for me to continue in good faith to take part in developments that recently have been and continue to be carried out in the Eastern Maine Healthcare System. Therefore, I resign from the Eastern Maine Healthcare and Eastern Maine Charities boards of directors,” Palmer wrote on Wednesday.

“The decision to resign is a very painful one for me after half a century of very close association with Eastern Maine Medical Center. This hospital has been a very large part of my life’s dedication to the care of sick and injured fellow human beings.”

Kagan could not be reached Thursday night for comment.