Afraid I Would Die and Afraid
I Wouldn’t: Understanding the Concept of a Sunk Cost?


Leonard Zwelling

            In 1981, on a dare from some pretty famous
oncologists—Allen Lichter, Marc Lippman and Robert C. Young—I trained for and
ran the Marine Corps Marathon in Washington, DC. We galloped as a group from
February, through the hot and steamy DC summer into the fall. On November 1,
1981, I started the race with them. Only Bob and I finished. I ran the 26.2
miles in 3 hours and a minute. I had hoped to break 3 hours. Why didn’t I?

            Around mile 20, I “hit the wall”. This is supposed to be
the place in the race at which your body has utilized its stores of energy and
you are, as Marc used to say, “running on nerve”.

            When asked to describe this feeling, I respond even today,
“at first I was afraid I was going to die. Then I was afraid I wouldn’t.” As I
hit the wall, I made the conscious decision to throttle back on my pace and
finish as I never wanted to do this again. Thus, I completed the course at the
Iwo Jima Memorial, but at a final time greater than I had hoped for AND,
indeed, I never ran another marathon even though I raced right up to 1996.

was a case of expediency. I made a decision that was uninfluenced by the fact
that I had run the first 20 miles at the pace I had planned. That 20 miles was
history. Only the status of my body at mile 20 influenced my decision going
forward and I believe that I made the right one.

            One of the great reasons I have repeatedly heard from
many folks that Dr. DePinho has retained his presidency despite his multiple
ethical lapses, lack of appreciation for the complexity and stress of
delivering world-class clinical cancer care and a generally unpleasant public (and
from my limited encounters, private as well) demeanor is that the UT System has
already spent so much on him, they can’t pull out now.


            The first thing I learned in my Finance course in
business school is that you never let what has happened to your investments in
the past affect your investment decisions going forward. That spent money is
called a sunk cost and it is NEVER to influence any decisions with regard to future

            I believe that the UT Regents and the Chancellor and
previous Executive Vice Chancellor have been mistakenly making their decisions
about the MD Anderson leadership based on the enormous amount of money already
expended on Dr. DePinho, the Moon Shots and IACS. These are all sunk costs.

current decisions on sunk cost only serves to emphasize the faulty logic of the
decision-makers and the probable adverse outcomes in MD Anderson’s future. The
likely magnitude of the resultant adversity grows with each passing day. The
music will have to be faced when the chickens come home to roost and this
sentence has too way too many metaphors in it, so I will end it.

believe that the UT System and the Board of Regents has had more than adequate
opportunity to correct a mistake they have made and to blame it on anyone but
themselves (even though a single call to anyone in Boston who knew the DePinhos
would have given them all the information they needed to keep shopping). That
lack of due diligence is also a sunk cost and not worth mulling over other than
to not do it again when looking for Dr. DePinho’s successor.

get calls and I get emails that wonder how this could have transpired and how
it goes on despite fiascos like the Moon Shot update and the Watson rollout. I
don’t know, but I suspect this sunk cost issue is a big part of the problem
along with the men on the Board of Regents being unable to say “I’m lost, I’m
wrong, and I’m sorry”.

Anderson is at a critical juncture in its history. It is one of the last
remaining places able to generate a margin near 4% from patient care to carry
out its research and education missions. This cannot go on in the current
economic and health care environment.

it appears that MD Anderson’s current executives want more so that they can
supply the President with the resources he needs to get to the moon and beyond.
This is folly.

I hit the wall at 20 miles and made a decision to do a little less to make sure
I could complete the task at hand is no shame. Sometimes, you just can’t live
up to your dreams. But you can always follow the laws of finance. All markets,
even the best of them, will eventually come down. We all learned that in 2008.
Lesson two may be the sunk cost lesson. I would have thought the UT Regents
would have known that one given their business backgrounds.

course, they are not playing with their own money. They are playing with the
money your hard work generated.

Leonard Zwelling