Approved: March 7, 2007
Date
MINUTES OF THE HOUSE GOVERNMENT EFFICIENCY AND TECHNOLOGY COMMITTEE
The meeting was called to order by Chairman Jim Morrison at 3:30 P.M. on March 5, 2007, in Room 526-S of the Capitol.
All members were present except Representative Tafanelli, who was excused.
Committee staff present:
Mary Galligan, Kansas Legislative Research
Tatiana Lin, Kansas Legislative Research
Renae Jefferies, Office of Revisor of Statutes
Gary Deeter, Committee Assistant
Conferees appearing before the committee:
Irene Cumming, CEO and Executive Director, University of Kansas Hospital Authority
Others attending:
See attached list.
The Chair welcomed guests and recognized conferee Irene Cumming, CEO and Executive Director, University of Kansas Hospital Authority. Ms Cumming gave a brief history of the Hospital, which in 1998 changed from an entity under the Kansas Board of Regents to an independent hospital authority with the mission of operating a teaching hospital, a research site, and continuing service to the uninsured (Attachment 1 and Attachment 2). She traced the changes in culture, in technology, and in the facility to put the patient first, changes which significantly raised the rank of the Hospital on several national indices. She noted the increase in patient satisfaction, in percentage of nurse education level, in patient volume, and the decrease in staff turnover. Ms. Cumming referenced several capital investments, among them: a new heart center, a new cancer center, a trauma center, a burn center, and an organ transplant program.
Answering questions, Ms. Cummings replied that oversight of the telemedicine program was conducted by KUMC rather than the Hospital. She said the Hospital has a world-class heart facility, specializes in breast cancer treatment, will soon have specialized expertise in lung cancer, and is compared favorably with the top-rated Cleveland Clinic. Referring to Hospital support, she said each department has funding agreements for receiving compensation. She explained that the increase in Medicare funding has allowed state support to remain level rather than increasing. She noted the difficulty of comparing the Hospital with other academic hospitals, since each is governed by different policies.
Ms. Cumming continued her testimony by saying that the proposed affiliation between the University of Kansas Medical Center (KUMC) and St. Luke’s Hospital in Missouri carries significant risks for the Hospital Authority, risks that continued negotiations have been unable to resolve. Commenting that the Hospital is supportive of a collaborative approach, she said the most important issue is the need to define the status of the Hospital as the primary academic, clinical, teaching, and research hospital for KUMC. She observed that, although affiliation of KUMC with St. Luke’s might result in millions of dollars becoming available to the University, splitting the relationship of KUMC with the Hospital through affiliation with a third party could harm the Hospital, especially since the Hospital views St. Luke’s Hospital as a competitor in the Kansas City area. She stated that a consultant recommended that before an affiliation with St. Luke’s be consummated, the Hospital and KUMC should work out a harmonious agreement. Acknowledging that the Hospital signed a Letter of Intent on February 1 to explore an affiliation, she expressed concern that such an affiliation between KUMC and St. Luke’s could dilute the Hospital’s identity and diminish the market niche it has established; she noted a further concern that the Hospital may find it more difficult to recruit physicians. She said a consultant, Chartis Group, has recommended two proposals that offer resolution, but KUMC has asked for major revisions of the proposals.
Ms. Cumming answered many questions from Committee members:
• She replied that the Stowers Institute has urged a conclusion to the proposed affiliation, leading the interested parties to set deadlines.
• She said the proposed affiliation looks more like a merger with St. Luke’s, a merger which might result in a decline in the number of residents assigned to the KU Hospital, might create difficulty in recruiting the best physicians, and would blur the brand identity of the KU Hospital.
• She acknowledged that there is no legal barrier to stop KUMC from affiliating with St. Luke’s Hospital.
• She noted that KU Hospital has affiliation agreements with other hospitals, but these hospitals are not direct competitors; further, the other hospitals receive a few residents, whereas St. Luke’s could take up to 100 residents, seriously diluting the pool of residents from which to draw.
• She stated that the Hospital has no problem with KUMC affiliating with Children’s Mercy Hospital, since the KU Hospital does not have a strong pediatric program.
• She said that nationally most affiliations result in mergers.
• She replied that the driving force behind the affiliation of KUMC and St. Luke’s is the Stowers Institute in Missouri, a $2-billion investment, an entity that requires KUMC to achieve NCI (National Cancer Institute) recognition, recognition that can be achieved by affiliation with St. Luke’s. Because Kansas City wants Stowers to remain in the area, the community is supporting the proposed affiliation and offering significant funding incentives.
• She observed that an affiliation would offer advantages for KUMC and St. Luke’s, but not for the KU Hospital.
A member expressed dismay that KUMC would attempt an affiliation with another hospital without including the Hospital Authority.
Answering a question, Ms. Cumming said that a preliminary offer of $400 million in support of KUMC had been considered by a Board committee, but that the Board had not considered it or voted on it. Betty Keim, a member of the Hospital Authority Board, explained that the Board proposal was prematurely released to the press before the Board made any final decision on the proposal, but that the Board was aware of the proposal.
The meeting was adjourned at 5:12 p.m. The next meeting is scheduled for Tuesday, March 6, 2007.