Governor Nominates Mark O. Hatfield to OHSU Board of Directors

02/05/00    Portland, Ore.

Gov. John Kitzhaber has nominated U.S. Sen. Mark O. Hatfield to the Oregon Health Sciences University Board of Directors. The nomination will be forwarded to the Senate for confirmation on Feb. 24.

"During the course of a political career spanning five decades, Mark Hatfield has distinguished himself as a leading voice and powerful advocate for health care," said Kitzhaber. "This is a natural progression to his continuing contribution and commitment to Oregon's only academic health center."

"OHSU is honored to have Mark Hatfield join our Board of Directors," said OHSU President Peter O. Kohler, M.D. "Sen. Hatfield has been leading the fight for medical research at the national level for several years. He will provide excellent guidance for OHSU as we take part in the health advances occurring at the most promising time in history for medical discoveries, both for cures and health promotion."

The Governor has nominated Hatfield for the position formerly held by Neil Goldschmidt who will be retiring from the board this winter. "We have enjoyed Goldschmidt's participation for almost five years on the board, and we will miss his keen wit and insight," Kohler said.

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, with as much as 42 percent of its budget coming from the state. By the late 1990s, state support had dropped below 10 percent of the university's budget. This reduction in state support increased OHSU's reliance on other sources of revenues, making it crucial for the university to be proactive, competitive and agile. At the same time, changing market forces made it increasingly difficult for OHSU as a state agency to respond quickly and with the flexibility essential to compete for necessary support.

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, OHSU no longer is governed by the state's Board of Higher Education. Instead the institution is governed by the OHSU Board of Directors. 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 university's costs to provide 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. Today, the institution has been able to maintain 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.

"Many challenges remain, however," Kohler explained. "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. We look forward to Hatfield's vision and wisdom in helping guide the university through an era filled with immense challenges and opportunities."