The University of Kansas Medical Center is breaking out.
Next week, when its television and print ads start running in the Kansas City area, the hospital will have operators in a call center standing by to direct patients to the physicians featured in the ads.
Sound revolutionary? Hardly. University of Kansas competitor St. Luke's Hospital, a mile east across the state line in Kansas City, Mo., has been running a hugely successful call center for years.
But it's a first for 409-bed KU Medical Center. The new call center is just one of the emblems of the hospital's newfound freedom from the fetters of state control.
On Oct. 1, when new affiliation agreements take effect, the hospital will no longer be a creature of the state university system but an independent authority with its own board. The University of Kansas Board of Regents signed off on the deal Sept. 16. Now the hospital can find its own orbit in the competitive Kansas City metropolitan healthcare market.
For years KU Medical Center has been in a public blind spot. The public didn't perceive it clearly because it didn't effectively get its message across, which created a void where the huge research and teaching center should have been.
"That void is going to be filled quickly," said Sandy Praeger, the Republican chairman of the state Senate Health Committee and now a member of the new authority board. "I'm excited about defining the market and going out and achieving those market goals. It's not just good for the hospital; it's good for the state. We need the hospital to be a strong force."
Robert Hemenway, University of Kansas chancellor, was elected chairman of the authority board. The hardest part, he said, is overcoming the "considerable anxiety" involved in separating a hospital from the schools of medicine, nursing and allied health when "they've been wedded together for over 100 years."
Yet already there's a speed and flexibility in decisionmaking that was never there before. In the academic setting, decisions proceed after prolonged debate. And in a state institution, many of those decisions must be approved by the regents or the Legislature.
But in August, KU Medical Center negotiated the purchase of 11 primary-care centers from local managed-care plan TriSource (Sept. 21, p. 48).
"We made that decision in two weeks," said Irene Cumming, KU Medical Center's chief executive officer. "That's record time for anybody to make a transaction like that."
Cumming said the creation of a hospital authority has brought new life to the organization.
"I was appointed CEO in April 1996. Clearly, as I looked out on what my charge was, the most important thing was what we're achieving today-separating the hospital. Now we can do all the strategic initiatives that are so necessary. We're as excited as we can be. Now we're ready to implement our plan," she said.
The hospital had a couple of advantages starting out. First, it had no subsidies to wean or debt to pay off. For years it has paid its own way on operations, without relying on state taxes. Its new building was paid off in 1996, and it can issue bonds without permission from the Legislature.
According to HCIA, a Baltimore healthcare information company, the hospital earned $7.6 million in fiscal 1997 on $185.4 million in net patient revenues. The hospital projects a surplus of almost $6 million for fiscal 1998, ended June 30.
Second, it wasn't the first state academic medical center to follow this course. Such institutions as the University of Cincinnati Hospital, Medical College of Virginia, Oregon Health Sciences University and the University of Colorado Hospital all within the past few years privatized or adopted the authority structure.
"Each of us learns from the mistakes our predecessors have graciously made for us," said Jon Jackson, KU Medical Center's chief operating officer.
Many of the transition difficulties came in contract negotiations, Jackson said. The university complex and the hospital, intermingled within a jumble of buildings in Kansas City, Kan., had to create business relationships that had never before existed.
The university will provide certain services to the authority on a contract basis. They'll share a computer center, and the hospital authority will provide housekeeping services to the university.
Quality and satisfaction clauses have been written into the agreements. "If we don't provide good quality service," Jackson said, "they can hire another vendor."
Thus dawns a new day for authority employees. Cumming and her team agonized over how the 2,300 state employees at the hospital would respond to losing their civil service status when they moved to the authority. They even gave the employees the option of staying with the state.
Only five employees insisted on retaining their state employment status, and new jobs were found for them. The rest moved into the new era.
"I would have thought, just knowing state employees and their feelings about job security, it would have been a lot more contentious," authority board member Praeger said. "I think they see the possibilities. It's a good demonstration of faith in the leadership at the hospital that they were willing to make the transfer."