(CN) - Nebraska Medicine, a nonprofit that operates two hospitals and 70 health care clinics in the state, on Friday sued to stop the University of Nebraska from buying a 50% stake currently held by Clarkson Regional Health Service and become its sole owner.
The planned $800 million acquisition of Clarkson's stake and real estate holdings will destroy Nebraska Medicine's independence and give the university's board of regents control over its operations and financial assets without the checks and balances under the current joint structure, the hospital operator said in a complaint filed in Douglas County District Court.
"The University of Nebraska should not be allowed to violate its contractual obligations in order to control the operations of Nebraska Medicine nor should it be allowed unfettered access to Nebraska Medicine's funds, including funding from donors and organizational resources, especially when those funds could be utilized for non-health care purposes, such as making up for the University's well-publicized revenue shortfalls," Nebraska Medicine argues.
Nebraska Medicine, then called Nebraska Health System, was created by the 1997 merger of Bishop Clarkson Hospital and University Hospital in Omaha.
The health care provider is run pursuant to a 2016 joint operating agreement between Nebraska Medicine, Clarkson, the University of Nebraska Board of Regents and the University of Nebraska Medical Center.
According to Nebraska Medicine, this arrangement has been upended because Clarkson wants to get out of the nonprofit and get paid for it, and the board of regents wants sole control over Nebraska Medicine and its finances.
The university announced on Jan. 2 that Clarkson wanted to sell its stake in Nebraska Medicine and that the university's acquisition of it was the logical next step in, what it called, "the overall vision to create the world's best health care system in Nebraska."
Since 2016, the university said, Nebraska Medicine and the University of Nebraska Medical Center - which share the same campus - had become increasingly integrated as Nebraska Medicine serves as the primary teaching site for the medical center's educational programs.
Most Nebraskans, according to the university, already think of Nebraska Medicine and UNMC as unified and aligned organizations, and they are indistinguishable to the public.
Nevertheless, Nebraska Medicine says in the complaint, the proposed buyout must be stopped to preserve the health care provider's integrity and autonomy as well as the public's trust in independent medical care.
Its success, including in fundraising, growth, recruitment, and patient care is, in large part, due to the stewardship of its competency-based, independent fiduciary board, the nonprofit claims.
"We are saddened and puzzled by this unnecessary action," the University of Nebraska Board of Regents said in a statement. "The Board of Regents has stated multiple times, including several times in the recent public board meeting, that we have a sincere desire to work in a collaborative fashion with Nebraska Medicine to grow and strengthen health care."
Nebraska Medicine seeks declarative relief to the extent that the transaction violates the parties' joint operating agreement and an injunction blocking the buyout.
The hospital operator is represented by attorneys from McGrath North Mullin & Kratz, PC LLO in Omaha.
Source: Courthouse News Service
