The board of regents of the University of Oklahoma has authorized university President David Boren to approve the terms of an affiliation between the university medical center and Columbia/HCA Healthcare Corp.
The university and Columbia have been in negotiations for more than a year. The goal is to create a joint operating agreement between University Hospitals-which includes Children's Hospital of Oklahoma-and nearby Columbia Presbyterian Hospital, both of which are in the Oklahoma Health Center in Oklahoma City.
Universities in numerous states, including California, Kansas and Missouri, have contemplated doing joint ventures with for-profit companies to infuse their hospitals and medical schools with needed cash. In many instances state governments have vetoed such plans and have changed the hospitals' governing structures instead.
In November 1995, Oklahoma's University Hospitals Authority, which governs University Hospital and Children's, announced it had selected Columbia as partner in a joint venture after inviting all major hospitals in Oklahoma and national hospital companies to submit proposals.
The authority said Columbia "made the most comprehensive proposal to assure robust operations . . . and was the only one to offer an infusion of significant additional capital."
Dean Luthey, the authority chairman, said the state hospitals needed a financial boost to enhance medical education, treat indigent people, develop systems and produce quality research.
The tentative 1995 agreement specified that a new board would be created. The university authority and Columbia each would have five seats. The chairman of the authority would chair the new board, but Columbia would manage the hospitals.
Columbia would pay $24 million to the authority and $26 million to the university medical school. The authority would retain its operating cash of $36 million. Each organization would retain ownership of its assets. Columbia would reap 60% of cash flow and the authority 40%.
Children's Hospital would receive $25 million to $40 million in capital investment.
A definitive agreement, once ironed out, must be approved by various regulatory and political powers in the state.
Boren said he expects a resolution soon. "We need to know within about three weeks what they are going to do. It can't wait until the next legislative session. If they don't do something, we're going to have to get more money from the Legislature."