Knoxville more competitive with other health care institutions while continuing
its mission of providing patient health care, medical education and research,
will go before the University of Tennessee Board of Trustees meeting on
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 on a level playing field with similar health care institutions. The
proposal would also protect existing UT benefits programs for approximately
3,500 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 health care 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, UT and the
State of Tennessee.
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