September 29, 2008

Med Seeks to Sign on to UT Clinic — Proposed Building Would Be Profit Source

By Daniel Connolly

The Regional Medical Center at Memphis plans to ask the University of Tennessee Health Science Center about participating in its plan to build a new clinical office on Union that would attract paying patients.

The Med's interest in the project reflects its desire to earn money and turn around a projected $14.4 million operating loss this fiscal year.

Hospital board chairman Gene Holcomb said Thursday that he wants The Med's new interim CEO, Claude Watts Jr., to approach UT executives about working together.

The Med runs large outpatient clinics, and Holcomb said he doesn't want the organizations to compete against each other, unless it's clear that this is what both sides want.

UT Health Science Center chief of staff Kennard D. Brown said the university works with many hospitals and other health care organizations.

"We will be glad to discuss additional opportunities to extend these partnerships and better serve the greater Memphis community and the region," he said.

The Med is losing money because it offers expensive services such as trauma and burn care and treats many patients who lack health insurance.

In August, only 6 percent of its patients had insurance through commercial providers such as BlueCross BlueShield of Tennessee, which pay at relatively high rates and can help offset the cost of charity care.

UT officials first mentioned the construction plans Tuesday at a meeting with hospital leaders and state legislators.

The university plans to tear down an unused building near the intersection of Union and Dunlap and replace it with a new building where patients could visit dentists, doctors, nurse practitioners and pharmacists affiliated with UT. Students would also practice there.

Currently, UT offers such services at buildings scattered throughout its campus. A new building could help draw paying patients, UT Health Science Center chancellor Dr. Pat Wall said earlier this week.

The university would use patient revenues to fund the project, which would cost an estimated $40 million.

The new clinical building would be part of a package of university construction and renovations that would cost roughly $250 million over the next five years, Wall said.

The state budget is tight, and the university plans to raise much of the money itself through donations and grants for scientific research.

Many details of the construction plan are still tentative, university leaders said earlier this week.

At a hospital finance committee meeting Thursday, Holcomb expressed frustration that he hadn't known about UT's plans until he read them in The Commercial Appeal.

University spokeswoman Sheila Champlin wouldn't comment.

UT and The Med are a short distance apart from one another in the medical district and work together extensively. For example, many of the doctors and other staffers who work at The Med have faculty appointments at UT.

Also Thursday, hospital board member Darrell Thomas called for The Med to place more of its cash reserves at , a black-owned organization. He said The Med should support minority-owned businesses.

After some discussion, Holcomb told Thomas to approach the bank and see if owners would offer an interest rate comparable to what it's getting in a money market account at First Tennessee Bank, part of publicly traded First Horizon National Corp. If so, The Med might move roughly $5 million to the bank, he said.

- Daniel Connolly: 529-5296


New construction plans at UT

Build a $50 million laboratory research building. Support from organizations such as the National Institutes of Health would pay for it.

Raise $10 million in private donations to remodel the Dunn Dental Building.

Improve the General Education Building using $3million in state funding already in hand.

Convert the old Nash and Crowe research buildings into office space in a project that would start years from now.

Originally published by Daniel Connolly [email protected] .

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