Health Committee Approves Options for UT Medical Center (400)

MARTIN, Tenn. — The first step to make the University of Tennessee Medical Center more competitive in the changing health care industry was taken here Thursday by the health affairs committee of the UT Board of Trustees.

The committee approved a recommendation to ask the Tennessee General Assembly to authorize management options that would, as UT President Joe Johnson said, “put the center on a level playing field with other area hospitals.”

The board’s finance committee was scheduled later Thursday to consider the measure, to be followed Friday by vote of the full board.

Johnson said laws and regulations that apply only to state institutions keep the 600-bed hospital from responding effectively to issues that confront large, complex academic medical centers.

“We do not have the management options to compete in the 21st century,” Johnson said. “The health care industry has changed more in the past four years than in the previous 40.”

Johnson said the center would continue as a teaching and research hospital and the graduate school of medicine would remain part of UT.

“That’s imperative,” Johnson said.

With board approval Johnson said UT would ask the General Assembly to give the trustees authority to consider one of the following options: 1) make the medical center a non-profit corporation, 2) lease the center to another corporation, 3) sell the center, or 4) make no changes.

Several other states, including Virginia and South Carolina, have given their academic medical centers options similar to those UT seeks, Johnson said.

Bill Rice, UT vice president for health affairs, said that if the general assembly authorizes the UT trustees to act, a study committee would be formed to consider options for the medical center and then make a recommendation to the board.

Any option adopted by the board would require approval of the state school bond authority and state building commission, said Rice, predicting that any action would not come until sometime in 1998.

Johnson said that among the tools the medical center needs to be competitive is the ability to borrow money, purchase provider networks, enter into partnerships with other hospitals, and construct new facilities quickly.

The proposal UT administrators want the General Assembly to approve would give the medical center flexibility to borrow money and construct facilities in much shorter time than under current state law.

The medical center employs 3,800 persons. Dr. Charles Mercer is the center’s executive vice chancellor.