Affiliation Agreement ( .PDF )
The Kansas University Medical Center, Kansas University Physicians Inc. and KU Hospital affiliation agreement encompasses everything from the composition of the medical staff to the rights to the clinical use of the KU brand. And it includes a lot of money:
$70 million: The cost of the medical office building and parking structure to be built.
$46 million: How much the hospital will pay KUPI and KUMC.
$10 million: How much KU Hospital will pay for an additional 100 medical residents.
$3.1 million: How much KUMC will pay KU Hospital each year to lease the medical office building.
$1.25 million: How much KUMC will pay KUPI for its services.
$1 million: Funds from KU Hospital to KUMC to support achieving National Cancer Institute designation.
KU Hospital affiliation
- KU hospital negotiations face 'tough sledding' (11-16-07)
- Progress cited in KU Hospital, Med Center negotiations (11-14-07)
- Legislative Post-Audit report addresses questions on both institutions (10-31-07)
- KU Hospital, Med Center tensions diminish (10-31-07)
- Regents seem pleased after KUMC talks (09-18-07)
- KUMC closer to agreement with St. Luke's (09-12-07)
Westwood When it was all said and done Tuesday, there were no champagne corks popping in celebration.
Instead, those involved with approving one of Kansas' largest-ever hospital affiliation agreements retreated to lunch or to their cars and on to other things.
The Kansas University Hospital Authority board approved its affiliation with KU Medical Center and Kansas University Physicians Inc. Just like that, 18 months of bitter negotiations - with grievances sometimes aired in the media or in front of legislative committees - came to an end.
"This is a really good document - a really good plan," said KU Hospital CEO Bob Page. "Now it's up to Barbara (Atkinson, KUMC's executive vice chancellor) and her team and me and our team to make this work."
Among the changes that will be most visible to patients are a new building that will house doctors' offices - eliminating the need for patients to wander from one side of the labyrinthine KU campus to the other.
KU leaders also say this affiliation will lay the groundwork for KU achieving designation as a National Cancer Institute. Such a designation would give Kansans and others in the region easier access to potentially life-saving cancer treatments.
The deal was approved with unanimous support of the authority board. Perhaps most prominent, the amount of financial support from the hospital to the university and the physicians will immediately increase - once the affiliation is signed by all parties - from $31 million per year to $46 million per year.
The support is divided into more than a dozen categories, the majority of which goes to providing "appropriate salaries to our physicians," Atkinson said.
The agreement for the first time ties financial support for the School of Medicine to hospital patient revenue. Before, the school received a base amount.
Page said getting all three parties to benefit from the success of the clinical operation was a critical shift in the affiliation.
"The key is to have a lot of incentives on the campus so everyone can work together," he said. "We have laid the groundwork to have a truly terrific medical operation."
The new medical office building that the hospital will build on university land will then be leased back to the university for about $3.1 million per year.
"It's important for the physicians to have good office space to see patients," Atkinson said. "A new office building was the No. 1 goal when I became dean five years ago."
The building, which would tentatively be located south of the existing hospital in Kansas City, Kan., would be accompanied by a 600-space parking garage, built by the university. Officials expect construction to begin Jan. 1, 2009.
The most contentious and difficult negotiations centered on how KU Hospital and KUMC would control the "KU Cancer Center" brand and how cancer care would be handled.
Under the agreement, KU Hospital and KUMC are the only institutions that can use the brand name KU Cancer Center. All other institutions can call themselves an affiliate of the KU Cancer Center, but only when that right is extended by the hospital. This had been of particular concern to KU Hospital because it feared St. Luke's Hospital in Kansas City, Mo., would be able to use the KU brand in a way that would harm KU Hospital. In an affiliation previously agreed upon, St. Luke's will provide $1 million in unrestricted funding to KUMC. St. Luke's also will pay the costs to have up to 100 KUMC residents at its location.
The affiliation also creates a Cancer Partners Advisory Board, which is to be made up of hospitals that are major sites of both clinical trials and academic research. The affiliation requires as many Kansas hospitals to be board members as hospitals from other states throughout the region.
KU Hospital also continues to maintain the lead role in providing clinical services for cancer patients.
Atkinson said this "absolutely" sets the groundwork for achieving National Cancer Institute designation.
"We needed to be working together to do that," she said. "We needed to be able to have affiliations with other hospitals in order to achieve that goal."
The last major piece of the affiliation - though it includes hundreds of other details - was a total realignment of the KUPI group. No longer will KUPI and School of Medicine leadership be intertwined. Also, the hospital and medical center will have equal representation on the KUPI board.
"This agreement is good for KU physicians and good for the patients we serve," KUPI president Dr. Kirk Benson said in a statement. "Moving into the future, we are better aligned with both the university and the hospital in our enterprise planning."
'Extraordinary' health care
KU Chancellor Robert Hemenway said the agreement showed the potential the hospital and medical center have when they work together.
With this agreement, "we can supply health care to people in the Kansas City area and the state of Kansas in extraordinary ways," Hemenway said. "We had to find a way to work productively together. We can't be competing with each other."
Competing with St. Luke's Hospital had been a major concern of KU Hospital going into the negotiations. In addition to acknowledging the previously agreed-to KUMC-St. Luke's affiliation, there are built-in protections in the KUMC-KU Hospital affiliation. Neither St. Luke's nor KU Hospital is allowed to recruit each others' doctors - or to recruit doctors that the other is trying to bring to Kansas City.
The university also agreed to monitor and defend KU Hospital's exclusive rights to the KU brand in terms of clinical care.
At the conclusion of Tuesday's meeting, representatives of both KU Hospital, including board chairman Dr. George Farha, and KUMC expressed satisfaction with the agreement's terms. Even Kansas House Speaker Melvin Neufeld, an outspoken critic of the entire affiliation process, said he was pleased with how the final affiliation turned out.
"The goal all along was to protect the state's assets in KU Hospital and KUMC - and not do anything that harms the hospital," he said. "My understanding of the agreement is there won't be interns, fellows or faculty taken out of KU Hospital."
Neufeld, R-Ingalls, said he hoped the legislative interest in the process was beneficial in bringing about an agreement that everyone seemed pleased with. Neufeld said he wanted this to be the bedrock for achieving NCI designation.
The affiliation now goes to the Kansas Board of Regents and KUPI board for approval. Both groups meet Thursday. When both governing bodies sign off on the affiliation, it will go into effect with the signatures of the leaders of the university, the hospital and the physicians.