Topeka ? They weren’t holding hands and singing “Kumbaya.”

But officials from often-feuding Kansas University Medical Center and KU Hospital reported on Tuesday that they now are getting along a lot better.

And they told lawmakers they would complete a new working and finance agreement within two months or so.

The update came as lawmakers started studying two comprehensive audits into the operations and finances of both KUMC and its teaching hospital, KU Hospital.

The audits were ordered last spring, after months of bitter fighting between the two institutions as KUMC sought a major affiliation with another hospital that competes with KU Hospital.

“We’ve kind of cleared the air,” state Rep. Peggy Mast, R-Emporia, chairwoman of the Legislative Post-Audit Committee, said after the new reports were discussed.

The audits covered a lot of ground – from KUMC’s increasing focus on research to a final payment made to the former chief of KU Hospital – and found no major problems at either institution.

KUMC Executive Vice Chancellor Barbara Atkinson said she was “completely pleased” by most of the findings.

“I think it was very positive for us and very positive for the hospital,” Atkinson said.

Both Atkinson and Bob Page, president and chief executive officer of KU Hospital, said the two institutions are close to hammering out a new affiliation agreement that would pay KUMC approximately $400 million over 10 years as part of its statutory duty to provide support to KUMC.

“Both institutions have been partners for 100 years … through good times and bad. We know that in order to succeed, we need to succeed together,” Page said.

‘New era’

Atkinson said Page, who was chosen this summer to lead KU Hospital, had “ushered in a new era of constructive engagement.”

But it was just a few months ago that the two institutions were embattled as KUMC negotiated a cross-border affiliation with St. Luke’s Hospital in Kansas City, Mo.

During that process, KU Hospital, which is the medical school’s primary partner, raised alarms, saying it would suffer financially if KUMC affiliated with one of its competitors.

And powerful legislators said that Kansas tax dollars used to support the medical school would flow into Missouri and that the affiliation would hurt the core mission of KUMC to produce physicians for Kansas.

Lawmakers launched the audit after several attempts to restrict KU’s affiliation efforts failed during the 2007 legislative session.

Affiliations

But on Tuesday, Atkinson defended the affiliation with St. Luke’s. “It allows us in the Kansas City region to become a leader in the life sciences,” she said.

Under the recently signed deal, KUMC will receive $1 million a year for four years from St. Luke’s. The funds will be used to promote research and hire faculty, Atkinson said.

The affiliation also calls for 100 new medical resident positions at St. Luke’s and allows the hospital to use the KU brand.

KUMC leaders also have insisted the agreement will help the university achieve National Cancer Institute designation, enhance research for life-saving drugs and train more doctors for Kansas.

But KUMC also has to reach an affiliation agreement with KU Hospital, and officials there want to ensure they play a major role in cancer research.

Questions persist

Atkinson and Page said tensions between their respective institutions eased after they reduced the number of negotiators at the bargaining table.

Even so, state Sen. Chris Steinegar, D-Kansas City, asked the institutions to provide information on how much they have paid attorneys during what he called “a lawyer fight.” Atkinson said she would provide that information.

The audits covered numerous questions swirling around the institutions, including whether the KU Hospital board was within its bounds to give former hospital chief executive officer Irene Cumming a $1.8 million separation agreement earlier this year. Auditors said they couldn’t say whether the amount was correct, but the board “was acting within its legal authority.”

The audits also addressed one of KUMC’s major complaints in recent years – that KU Hospital was not providing enough financial support. The audit found that compared with similar medical centers, KUMC’s assertion was correct based on 2005 figures.

But Senate Majority Leader Derek Schmidt, R-Independence, noted that KU Hospital has significantly increased its financial commitment to the medical school since then.

“This is interesting, but it’s kind of historic. We are not where we were in 2005. This is a snapshot of data that is no longer a reflection of reality,” Schmidt said.

And one part of the audit noted concerns about the lack of research opportunities at the KU School of Medicine in Wichita. But Atkinson said there would be a proposal in the 2008 legislative session to increase research there.