OHSU BOARD OF DIRECTORS AND GOVERNANCE STRUCTURE

The Board of Directors is the governing board of OHSU. Its members are appointed by the governor and confirmed by the Senate. This governance structure is relatively new for the institution and the state. OHSU became a nonprofit public corporation in July 1995.

From 1974 through June 1995, OHSU operated as part of the state's higher education system, obtaining as much as 42 percent of its budget from the state. By the late 1990s, state support had dropped below 10 percent of the university's budget. To secure other sources of revenue, the university needed to be proactive, competitive and agile. As a state agency, however, OHSU found it increasingly difficult to respond with the speed and flexibility needed to compete in a changing health care market.

OHSU began exploring new avenues to stay financially viable. In July 1995, the state and OHSU formed an innovative partnership that replaced several layers of state government oversight and regulation, transforming OHSU from a state agency into a public corporation with a more streamlined governance structure.

Today, the state's Board of Higher Education no longer governs OHSU. Instead the OHSU Board of Directors governs the institution. Its academic programs continue to be coordinated with the state's higher education system.

Although no longer a state agency, OHSU is not a private business. The new structure retains the university's responsibility for carrying out its public missions, including training the only doctorally prepared nurses, dentists and physicians in Oregon. In turn, the state retains its corresponding responsibility to help support the costs to the university of providing these public services.

As Hatfield joins the OHSU Board, there is little doubt that the public corporation model has put OHSU on the forefront of change in the health care industry. The institution has maintained its programs and public missions while relying on fewer state dollars (7 percent of its operating budget) by reducing its costs through increased efficiencies. Four years after becoming a public nonprofit corporation, OHSU continues to grow as other academic health institutions suffer severe budget shortages.

OHSU President Peter Kohler, M.D., stresses, however, that many challenges remain. He explains that in the increasingly competitive market, OHSU must continue to practice sound business principles and aggressive management. It must be able to look to the state for continued support of its public service missions, in addition to increasing revenues from other sources.