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COOPERATIVE AGREEMENT ISN'T UNIQUE, IHC SAYS

Though a federal investigation hints that Primary Children's Medical Center may be violating antitrust laws, the hospital is doing only what it believes will benefit children, says the vice president of the hospital's parent company.

Steven D. Kohlert, senior vice president of Intermountain Health Care Inc., said that cooperative agreements between hospitals - agreements that appear to be the target of the investigation - are nothing new or unique to Utah.Many independent pediatric hospitals throughout the United States use arrangements between university medical schools and private organizations, he said.

The arrangements are intended to create an environment that supports the highest quality medical education, research and attracts strong medical sub-specialty resources, said Kohlert.

"Most importantly, this relationship between the U. of U. School of Medicine and Primary Children's has improved patient care with one of the strongest pediatric programs available nationally."

The agreement between the university and Primary hospital was patterned after similar arrangements throughout the country, said Kohlert. The affiliation and the ground lease agreements were reviewed and approved in December 1985 by then Attorney General David Wilkinson, Kohlert said.

Primary Children's moved from its old location in the Avenues to its new $75 million facility adjacent to the university medical center in 1990.

"We have been extremely cautious to follow both the spirit and letter of antitrust law," says Douglas Hammer, IHC general counsel. "In fact, over the past two years, we asked Attorney General Paul Van Dam's office on at least a dozen occasions if they saw any problems with current programs or with the original agreements approved by Wilkinson. Our offer was always to sit down and work out any concerns. We were consistently told if any concerns existed, they would call."

Then, without any prior notification, IHC received subpoenas from the U.S. Justice Department in August 1991, he said.

IHC believes it is in full compliance with antitrust laws and that the investigation should never have been started in the first place.

State-owned universities are exempt from antitrust laws in light of rulings from the U.S. Supreme Court and U.S. District Court, argued Hammer. One such case was successfully argued on behalf of the university by Van Dam's office in 1990.

"We agree with the university's position that they are exempt from such actions," said Hammer. "Several cases give immunity to private organizations involved with state-owned universities."

Because of the enormous cost of the investigation, IHC officials hope the immunity issue will quickly bring the investigation to a close.

"IHC will always be committed to full compliance with all laws, including those concerning antitrust issues," said Kohlert. "We'll work to resolve legitimate concerns."