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Clarkson, UNMC Reach Litigation Settlement; Agree To Integrate Hospital, Clinical Operations

Clarkson Regional Health Services and the University of Nebraska Medical Center today announced that they have reached a proposed settlement of the litigation pertaining to an agreement between the two institutions dating back to 1953.

Under the proposed settlement, Clarkson and UNMC will create a joint operating company to manage the hospital and clinical operations of both institutions. The 1953 agreement, which in part pertains to property the University of Nebraska sold to Clarkson as a building site for its hospital, will remain in effect for a period of five years.

The proposed partnership will combine the health-care delivery systems of both organizations under a single management and governance structure. The combined organization tentatively will be called Medical Center Hospitals Corp., which will operate as a private, not-for-profit entity.

UNMC Chancellor William O. Berndt, Ph.D., and Clarkson President and CEO Louis W. Burgher, M.D., Ph.D., listed five key factors for the partnership: seizing an outstanding opportunity, securing the future of education and research, maximizing resources, improving competitiveness and enhancing clinical excellence.

By merging hospitals and clinical operations, Clarkson and UNMC will seize an opportunity to build a world-class health system and academic health center, while becoming a dominant player in the health-care arena, Dr. Burgher said.

Dr. Berndt added: The partnership joins two institutions known for their clinical excellence. The combined expertise of the two institutions will strengthen the vital education and research missions that Nebraska has come to rely on from UNMC. We both have a longstanding commitment to quality specialty care and have been focusing on the development of outstanding primary care initiatives.

Medical Center Hospitals Corp. (MCHC) will be owned and governed equally by the University of Nebraska and Clarkson Regional Health Services. Existing assets of either organization are not included in this proposed partnership. The proposed settlement is pending initial approval of the University of Nebraska Board of Regents, which meets April 5. The Clarkson Hospital Board of Directors gave its approval to a letter of intent at its board meeting Monday. Both boards in the future will be asked to give their approval to a definitive agreement setting forth the detailed terms of the settlement.

The new corporation will be governed by a board composed of 12 voting members — six representing Clarkson, six representing the University of Nebraska — and two non-voting members, the dean of UNMC s College of Medicine and the CEO of MCHC. The dean and the CEO will work as a team with other key administrators on broad system issues such as long-term strategic planning and allocation of resources. The College of Medicine dean will be responsible for all academic endeavors and decisions; the CEO of the proposed partnership for the daily operation of the hospitals and clinics.

This partnership is a good fit for both institutions, said Bruce Lauritzen, chairman of the Clarkson board. Together, these organizations can accomplish much more than they can alone. L. Dennis Smith, Ph.D., president of the University of Nebraska, said, The combination of resources from two neighboring institutions — space, personnel, equipment and financial strength — will position both institutions to compete more effectively in today’s health-care environment. According to officials, the proposed partnership will:

— Provide a full continuum of quality, cost-effective health care.

— Create an environment conducive to both the private and academic practice of medicine.

— Provide greater access to care through a regional network of sites.

— Maximize resources to improve the health of the community and the region.

— Provide the primary teaching facility for UNMC.

— Build on a longstanding relationship between the two institutions.

Clarkson Regional Health Services includes a 401-bed hospital, 16 clinical sites and 650-member medical staff. Clarkson has 1,420 full-time, 326 part-time and 306 casual labor employees. UNMC includes the 434-bed University Hospital, 11 clinical sites and University Medical Associates, a 298-member physician group. UNMC has 6,089 employees, including 2,729 in the hospital and clinics.