Ardent, OSU Reach Agreement on Hospital

Ardent Health Services and Oklahoma State University have signed an agreement that will put into place an ownership structure of OSU Medical Center and OSU College of Osteopathic Medicine’s residency program.
The agreement calls for Ardent’s Hillcrest HealthCare System, the owner of OSU Medical Center, and OSU-COM to sell the hospital for a nominal $5 million to a public trust.
The value of the sale is considered goodwill, as the facilities, equipment and infrastructure at OSU Medical Center, formerly known as Tulsa Regional Medical Center, is estimated between $140-160 million.
The two parties have negotiated since mid-December to reach an agreement aimed at best meeting the needs of both organizations while at the same time providing tremendous benefit to the entire state of Oklahoma.
“This agreement prepares the way for OSU Medical School to continue its mission to train much-needed family doctors for Oklahoma,” said OSU President Burns Hargis. “Although there is still much to do to complete the transfer of the facility, I am confident we are on the right track and it will happen soon. I want to commend Ardent for its collaboration and commitment to find a suitable solution.”
The public trust created by this agreement will be charged with establishing the operating structure for OSU Medical Center. The agreement sets a deadline to complete the transfer and create the new structure by June 30, 2008. The hospital employees, including the medical residents, will then become employees of the new entity, not OSU or the state. HHS will continue to manage the facility until the transfer is finalized.
The agreement includes that all the Indirect Medical Education funds will be returned to HHS, the parent company of OSU Medical Center. OSU-COM released $6.7 million of the IME funds in February with the remaining balance of $5.85 million to be paid to HHS between now and the time of closing.
The proposal also includes a 10-year agreement under which HHS will retain ownership of 96 behavioral health unit beds located in the hospital.
By transferring the hospital from a private to a public entity, it will allow the hospital to realize significant financial improvement through the elimination of sales and use and property taxes; a reduction in liability insurance; and retention of all IME funds.
OSUMC is a 363-licensed bed hospital with about 1,400 employees. It is the primary teaching hospital for OSU-COM’s residency program and currently the hospital hosts 132 medical residents and interns in 11 residency programs. In 2006, OSUMC provided $22.5 million in cost of unfunded care to uninsured and Medicaid.

Was this article helpful?

Related Articles

Leave A Comment?