Lawmakers seek to split Tucson hospitals from university board

Saying they fear a power grab, state senators voted Wednesday to wrest control of University Medical Center and Kino Community Hospital from the Arizona Board of Regents.

The proposal by Sen. Andy Biggs, R-Gilbert, would set up a new board to manage the Tucson hospitals. Its board would be dominated by people appointed by the governor as well as House and Senate Republican leaders.

His Senate colleagues concurred, approving the measure on a 27-3 vote. Only final House approval is necessary to send the measure to the governor.

The move is a direct response to the vote by the regents last Friday to alter how it intended to structure the final merger of the University of Arizona College of Medicine with the two hospitals. Most notably, it would set the stage for shrinking the 27-member UMC non-profit board and make the chief executive officer of the new entity, UA Healthcare, also a vice president of the college, meaning the person would have to be a doctor.

That would eliminate Kevin Burns who currently serves as interim president of UA Healthcare.

Katie Paquet, spokeswoman for the Board of Regents, said Burns resigned on Wednesday. Burns did not immediately return phone calls seeking comment.

Regent Rick Myers said the change would take what is a great "community hospital'' and instead make it a leader in research.

But Biggs said he sees this as an effort by the regents to exercise closer control of the whole operation.

More to the point, he said the regents want to convert what he believes has been a successful non-profit operation of the hospital into a government system. That's the way it was until 1984 when the non-profit was set up, with Biggs saying the old arrangement "was bleeding the state dry.''

Put simply, Biggs said, is the system is not broke.

He said the hospital is running at a surplus and is even prepared financially to deal with the upcoming cuts in Medicaid funding. Biggs said there already are working agreements in place between the hospital and the medical school, with the facility ranked in the top 5 percent of the nation's teaching hospitals.

"And then you're going to bring in a bunch of academics to the hospital system to say, 'We're going to govern you the way we govern the universities'?'' Biggs said. "Hello! You think there's a problem there?''

That's also the assessment of Sen. Linda Lopez, D-Tucson, who supported the legislation. She said if there is a power grab at work here, it is by the Board of Regents and not by the Legislature.

She said the current arrangement works well.

"They've invested all kinds of money into the infrastructure at what was UMC and also at Kino Hospital,'' Lopez said. She said the nonprofit corporation most recently provided $90 million to help support the medical school.

"Now we see this move by the Board of Regents saying, 'Sorry, we can do better.''

Myers said supporters of the legislation are missing the big picture.

He said the current board itself concluded that, at 27 members, it was too large. And the bylaws themselves require a minimum of 19 board members.

Myers said the changes approved by the regents say the new 0board could be as small as nine, though he said the final decision would be left to the board itself.

The board proposed in Biggs' amendment would include the chief executive and chief financial officers of the nonprofit corporation, the dean of the college of medicine, the UA president, a departmental chair from the college of medicine, a faculty medical staffer and 12 independent community board members, four named by the governor, four by the Senate president and four by the speaker of the House.

But Biggs said there is no effort to undermine what the hospital now does. In fact, his proposal contains specific language saying it is the intent of the legislature that the facility be operated exclusive for charitable, scientific and educational purposes, and that the board carry out the purposes of the university and the medical school.

The legislation, however, is premised on more than who serves on and the size of the board.

In voting last week, the regents decided that rather than have a CEO to run each hospital, there would be a single CEO who also would be a medical professional and serve as a vice president of the medical school.

The underlying problem, Myers said, is the hospital is not "meeting its potential.''

"If we want a great community hospital in Tucson, we've got a number of them, including UMC,'' he said. But he said more could be done in research in conjunction with the medical school.

"Health care in the state of Arizona is broken,'' Myers said, with medical costs outstripping the ability to pay for care. "And community hospitals which are seeing patients in beds and taking good care of people aren't fixing that.''

What UMC should be doing, is preventing people from getting sick, "doing the kind of things an academic medical center should be doing.''

Lopez, however, said she's not convinced that having a doctor run the hospital is the best idea.

"You need a business person to do that,'' she said. "That's why they've been able to make money finally.''

Paquet said she had no information on what salary Burns was earning or what kind of a financial arrangement he got on his resignation.

The current arrangement dates back to 1984 when state lawmakers voted to lease the hospital to what at the time was University Medical Center Corp., a new company composed of members of the Board of Regents and current and former university administrators.

Proponents said that, as a private corporation, the hospital could make money-saving changes and compete more effectively with private hospitals.

In its first year under the new structure, the hospital, which had posted a $4.5 million loss before the change, managed a profit of $113,938.

Even from the start, though, lawmakers have wrestled with the question of who should control the board.

In 1985, Sen. Hal Runyan, R-Litchfield Park, proposed limiting the regents and university employees to no more than one-third of what was at the time a nine-member board. A deal worked out at the time did limit the hospital board membership but left the regents in control of all appointments.