UT Trustees Ask Hospital Legislation (400)

MARTIN, Tenn. — The University of Tennessee’s board of trustees voted Friday to ask the state General Assembly for legislation that could result in the sale of UT Medical Center in Knoxville.

UT needs the legislation, which would permit the center’s sale or lease and other management options, because of changes in the health care industry, UT President Joe Johnson told the trustees. Unlike its competitors, the medical center cannot borrow funds from operating expenses.

The trustees’ vote was unanimous. If the legislature approves the bill, Johnson said the trustees will appoint a study group to recommend the best course of action for the hospital — ranging from no changes to selling it.

UT will retain the Graduate School of Medicine and any proceeds from the sale or lease of the hospital would go to the school for medical education and research, he said. The aim of the legislation is to protect the medical center.

“With an asset (the hospital) that large, I do not, as president, want to run the risk of not having the authority and the board not having the authority to look at alternative organization structures to insure the well-being of that hospital,” Johnson said.

Johnson said UT will not respond to any reductions in state funding with across the board cuts.

“We will keep the money where it ought to be,” Johnson said. “It will hurt but we will adjust.”

He said UT is in its sixth year without an increase in base budgets.

“We have a tremendous opportunity before us with the governor appointing his Council on Excellence in Higher Education. It will look hard at what we ought to do, what our priorities ought to be, and what our financial needs are.

“The governor deserves applause for that. He is expecting a report in 1998, and that probably says that we are going to have to work hard to make ends meet (in fiscal years) 96-97 and 97-98.”

In other actions, the trustees:

* approved a technology fee of $55 per semester for UT-Martin students.

* heard a report that thousands of dollars in services are being contracted to outside vendors and that the university will continue to look for other outsourcing opportunities.

* rescinded the degree of Clyde Morel Harmon. The trustees agreed with an administrative finding that Harmon received a music degree from UT-Knoxville using false information that he had completed all degree requirements.