OKLAHOMA CITY-The Oklahoma Legislature has passed a bill to allow University Hospitals Trust Authority in Oklahoma City to solicit bids for constructing an ambulatory-care center without following the state's competitive-bidding rules.
The Trust Authority, which oversees state-owned University Hospital and Children's Hospital of Oklahoma, both in Oklahoma City, wants to use a design-build contract for the center to be used by the University of Oklahoma's teaching physicians.
The public not-for-profit facilities effectively merged with Oklahoma City-based, for-profit Presbyterian Hospital in a private-public partnership called University Health Partners in 1998. Columbia/HCA Healthcare Corp. owns 271-bed Presbyterian.
The state had to pass legislation to allow a merger for the university hospitals, which had faced declining revenues, lower patient census and poor financial returns. The state still owns the hospitals but leases them to Columbia, which operates them as for-profit facilities.
The new bill was approved over the objections of several House members, who said sidestepping competitive bidding would reduce the Trust Authority's accountability and open the door to insider deals.
"If it's such a good idea, let's do it for every other agency of state government," said Rep. Mark Seikel, a Democrat. In fact, the idea of spinning off the teaching hospitals into a joint venture was to let the institutions function more flexibly than a state agency.
Rep. Tommy Thomas, the Democrats' floor leader, said waiving competitive-bidding rules for Oklahoma's teaching hospitals recognizes their public-private status.
"This is an effort to make them more like private hospitals," Thomas said. "I don't think anything's sinister here."
Meanwhile, during the same special session of the Legislature, the Oklahoma Hospital Association is fighting a rear-guard action to reserve the state's anticipated tobacco settlement for public health uses.
The state's education establishment is eyeing the tantalizing pot of money, estimated to be worth $2 billion over the life of the settlement.
"They want to use the tobacco settlement to fund higher education bonds," said Patti Davis, vice president of government relations at the state hospital association. "We think it was intended to build healthcare." The association is working with a broad coalition of health groups to hold the education lobby at bay.
"The state medical association, children's advocates, aging advocates, nursing homes, allied groups like the American Heart and Lung associations, are saying, 'Let's segregate this money. Let's not squander it,' " Davis said.
Higher education wants to use the tobacco money as security on
$500 million to $750 million worth of bonds for new construction. The hospital association and health groups want to put the money into a special fund that would pay for smoking cessation, youth education, programs for individuals suffering chronic smoking-related illnesses, and other health-related uses. But a bill to create that health fund was vetoed by Republican Gov. Frank Keating.
Oklahomans have one of the highest rates of smoking in the country, with attendant rates of illness, Davis said. A "multipronged approach" will be needed to curb tobacco use there, Davis said.
The health groups are willing to let the education establishment take no more than $10 million of the tobacco money.
One complicating factor for the hospital association is that the University of Oklahoma Medical School wants to use the tobacco money to build two cancer treatment centers, one in Oklahoma City and one in Tulsa, which could be funded through a bond issue secured by the tobacco windfall.
"They (the medical school) are in the mix in both scenarios," said George Humphreys, research director of the Oklahoma House of Representatives. "They're being considered in the bond issue and also in the discussion for the tobacco fund.
"Oklahoma City has the medical research program. But Tulsa feels it has been bypassed on so much higher education," he said.
The Legislature's regular session ended May 28. It was in special session in early June. The issue probably won't be resolved until the Legislature reconvenes in a second special session in August, Davis said.