OSU Medical Center frees self from Ardent

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http://www.tulsaworld.com/news/article.aspx?articleID=20080402_238_A1_hApub76076

quote:
Accord ensures hospital

by: KIM ARCHER World Staff Writer
4/2/2008  12:00 AM

A public trust will operate the Oklahoma State University Medical Center.


Oklahoma State University Medical Center will become the property of a public trust by June 30 under a deal reached Tuesday between OSU College of Osteopathic Medicine and Ardent Health Services.

"I'm delighted we've been able to come to an agreement. It's great news for OSU medical school and great news for medical care in Tulsa," OSU President Burns Hargis said.

The agreement will ensure the long-term stability of the facility, which is the primary teaching hospital for OSU's medical school.

"It's a great day for northeastern Oklahoma," said Earl Denning, president and chief executive officer of Hillcrest HealthCare Systems and interim CEO of OSU Medical Center. "This puts the hospital on sound financial footing."

Ardent Health Services of Nashville, Tenn., owns Hill crest Healthcare System.

Under the agreement, Hillcrest HealthCare System will sell the hospital for a nominal $5 million to a public trust yet to be created. The hospital, along with equipment and facilities, is valued at $140 million to $160 million, officials said.

The aging facility has struggled over the years through ownership changes and financial difficulties, bringing a great deal of uncertainty for OSU medical students.

Hargis said it is hoped the deal will help keep OSU medical students in Tulsa and its graduates in Oklahoma as practicing physicians.

"The uncertainty has been disruptive for the student body. It has been a dire situation for the state," Hargis said. "It's no secret that OSU Medical Center provides medical care for a number of indigent patients."

Without an agreement on the hospital, the medical school's program and the future of Oklahoma health care were in jeopardy, he said.

Oklahoma has fewer physicians per capita than any state in the union. The state could ill afford to allow medical stu dents to practice their residencies out-of-state, he said.

Research shows that medical students practice medicine within 200 miles of where they spend their residencies. "This agreement prepares the way for OSU Medical School to continue its mission to train much-needed family doctors for Oklahoma," Hargis said.

The new public trust will be charged with establishing a new operating structure for OSU Medical Center. The deadline for completing the transfer and creating the new operating structure is June 30, officials said.

All 1,400 hospital employees, including 132 medical residents, will become employees of the new entity, not OSU or the state. Hillcrest HealthCare Systems will continue to manage the facility until the transfer is finalized.

In addition, all Indirect Medical Education funds will be returned to Hillcrest HealthCare Systems, the parent company of OSU Medical Center, officials said. OSU College of Osteopathic Medicine released $6.7 million of the funds in February and the remaining balance of $5.85 million will be paid by the time of closing, they said.

Finally, the pact includes a 10-year agreement under which Hillcrest HealthCare Systems will retain ownership of 98 behavioral health unit beds located in the hospital.

Oklahoma House Speaker Chris Benge, R-Tulsa, said in a statement the deal is an important first step for the state, the city of Tulsa and the medical school students.

"We are pleased with the progress that has been made. But there are still significant details to work out," he said. "We remain focused on three objectives: maintaining a pipeline of doctors to the entire state, ensuring the stability of the medical program at OSU, and limiting the financial liability for the state as much as possible."

OSU and Ardent Health Services began negotiations in mid-December after Ardent offered to donate the hospital to the state, along with continuing to managing the facility.

The sale of the hospital will not adversely affect patient care, Denning said.

"We woke up this morning and delivered quality patient care. On July 1, that won't change," Denning said.



Kim Archer 581-8315
kim.archer@tulsaworld.com



What happens next?


Oklahoma State University and Ardent Health Services will negotiate terms of a transition agreement:

   * OSU will need to establish a public trust, hire a partner firm to manage the hospital and create a new board of directors for the trust.


   * Ardent will offer to do what is needed to ease the transition. Options include collecting accounts receivable to providing marketing and public relations.