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U. LEADER SAYS SCHOOL IS UNAWARE OF ANY UNLAWFUL ACTION AT MEDICAL CENTER

The principal goals of the University Hospital are to provide the highest quality teaching, research and clinical care, says University President Arthur K. Smith.

Achievement of these goals is important, not only to Utah, but to the entire Intermountain region, which depends on University Hospital for many types of specialized care. The hospital not only contributes to Utah's quality of life, it is a significant economic factor affecting emerging and relocating businesses, said Smith.The state provides only about 10 percent of the medical center's funding. The center has managed to achieve its goals by, among other things, obtaining substantial outside support for research, affiliating with other hospitals and generating clinical revenues. Affiliation agreements and clinical practice arrangements are apparently the subject of the current U.S. Justice Department antitrust investigation, he said.

"After conducting its own investigation, the university is unaware of any unlawful conduct at the medical center," Smith said.

Affiliation agreements (university medical centers agreeing to cooperate with other hospitals in research and clinical training) are common across the country.

"These agreements do not necessarily lead to a reduction in competition. The university's agreement with Primary Children's Medical Center has not caused a reduction of pediatric services at University Hospital. In fact, the University Hospital continues to compete vigorously in those areas in which it historically has provided pediatric services," said Smith.

Similarly, clinical practice plans - like Pediatric Faculty Physicians - that regulate medical faculty delivery of medical services are common across the country, Smith said. At the university, there has been less centralization of clinical practice than at some other schools. So the department of pediatrics faculty set up PFP to contract on its own behalf.

Smith argues that this situation is not unusual. Many public university medical schools use private corporations to perform clinical contracting functions. A centralized contracting office was established at the medical center last year to contract on behalf of all clinical departments. "This made PFP unnecessary, and its functions have now been assigned to the central clinical contracting office."

The current investigation resulted from the actions of the Utah attorney general's office, which also represented the university in a 1990 case - Pharmaceutical and Diagnostic Services Inc. vs. the University of Utah, said John Morris, legal counsel to Smith.

In the case, the chief judge for the U.S. District Court for Utah ruled that the "university defendants constitute the state acting in its sovereign capacity. As such they are entitled to . . . antitrust immunity," states Morris. The court noted that the immunity extends to "other university officials in this case," argues Morris.

Based on the Pharmaceutical and Diagnostic Services case, the university is asking a federal judge to block the antitrust investigation, claiming immunity.

This past week, Morris sent 10 boxes of documents to the Justice Department. Cost of the investigation to the U. so far is estimated at $1.5 million.

"The university is committed to full compliance with all applicable state and federal law and to appropriate cooperation with the current antitrust investigation," said Morris. "However, the university also has a responsibility to resist - within legal limits - illegitimate and inordinately expensive requirements imposed by federal enforcement personnel."