But St. Vincent's counter-proposal to the UAMS' term sheet for an affiliation in oncology and cardiology services and administration was this: All clinical "service lines," not just cardiology and oncology, would be included. St. Vincent would also have majority ownership of the non-profit MSO [the management services organization] that would provide administrative support to the hospitals and physicians for a fee.
Their proposal, then: To consolidate the hospitals, and let St. Vincent manage them. Fortunately, UAMS said no again, and St. Vincent has withdrawn its counter offer.
Asked what in particular UAMS found objectionable in St. Vincent's proposal, UAMS Chancellor Dan Rahn mentioned the specifically the framework for ownership, which states that "Financial consolidation (in accounting terms) is important for St. Vincent, so St. Vincent would have majority ownership of the MSO [Management Services Organization]," for a term of 25 to 30 years, but the chancellor said "the whole thing, the way it was framed" was problematic. The proposal, however, would have provided that UAMS "retain sole responsibility for all education and research," which should be included in any joint agreement.
The counter proposal was received Monday evening, and withdrawn yesterday by St. Vincent. However, the two entities are still negotiating, Rahn said, and he believes that by the time the University of Arkansas Board of Trustees meets May 22-23 in Stuttgart that UAMS and St. Vincent will have reached a consensus "on things we could start with" in an affiliation and will present a joint recommendation to the board.
UAMS is "facing significant financial challenges," Rahn said, because of the federal sequester (which cut $10 million from its budget) and changes in Medicare reimbursement, and some kind of partnership is necessary for UAMS to fulfill its mission of education, research and care. He added that UAMS' non-classified employees — those whose pay isn't mandated by the state pay schedule — are not getting a raise in the next fiscal year.