UT Trustees To Consider Medical Center Proposal (450)

KNOXVILLE, Tenn.–A proposal that would make the University of Tennessee Medical Center at Knoxville more competitive with other healthcare institutions while continuing its mission of providing patient care, medical education and research will go before the University of Tennessee board of trustees meeting here June 17-18.

In a letter to the trustees, UT President Joe Johnson said the proposal would create an independent, non-profit corporation to manage the medical center. In addition to placing the medical center on a level playing field with similar healthcare institutions, the proposal would also protect existing UT benefits programs for approximately 3500 employees currently at UTMCK.

Johnson said changes in the health care industry require this new approach, as recommended in an 18-month study by a committee of UT physicians, administrators, staff and community leaders from the Knoxville area. The study examined various options for UTMCK with the exception of outright sale, which was prohibited by state law in 1997.

“The study did convince us that the UT Medical Center must change if it hopes to keep pace and prosper in the next century,” Johnson said. “Our group concluded that a failure to change would put at risk the medical center’s mission as we have known it for more than 40 years.”

The trend toward managed care and the growth of payment reform at the national level have affected academic medical centers throughout the country by altering reimbursement and methods of providing clinical services, Johnson said. Teaching future healthcare professionals and clinical and basic research are also being affected.

“Moving to an independent corporation would greatly reduce financial risk to the university,” Johnson said. “It would also provide access to capital for programs and facilities, enable new partnerships with other providers, and provide for more innovative and flexible purchasing and business procedures, while allowing the University of Tennessee to retain ownership of the medical center’s assets.”

The new corporation would have a board of directors separate and independent from the UT board of trustees. It would contract with the university for employee services in order to maintain “existing compensation and benefit levels for current employees,” Johnson said.

Medical education, research and management, and oversight of UTMCK would be handled by a lease agreement between the new corporation and UT and the State of Tennessee.

Thursday’s board of trustees action is the first step in creating the non-profit corporation. Once details of the transition are completed, public hearings will be conducted. The State Attorney General and the State Building Commission must also approve the recommended change before it comes back to the UT board for final adoption.

The transition from UT to the new corporation would take several months, Johnson said.

Contact: Dr. Joe Johnson (423-974-2241) or Mickey Bilbrey (423-544-6350)