
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SATURDAY, October 14, 1995                   TAG: 9510160044
SECTION: VIRGINIA                    PAGE: C-2   EDITION: METRO 
SOURCE: Associated Press
DATELINE: RICHMOND                                LENGTH: Medium

SALE OF MCV, UVA HOSPITALS UNDER STUDY

The Allen administration is considering selling the Medical College of Virginia and the University of Virginia's hospitals, the Richmond Times-Dispatch reported today.

Selling one or both of the state's two public hospitals - whose estimated combined worth tops $500 million - is the most controversial of three options being considered by state officials as part of a hospital privatization study sought by the administration and legislature.

``We're examining the options and looking at the pros and cons in the framework of what's in the best interest of the taxpayers, the employees of the hospitals and the customers they serve,'' said Robert Lauterberg, director of the state Department of Planning and Budget.

A study of the possibilities has been completed and is to be sent to Gov. George Allen and the chairmen of the General Assembly's money committees by Nov. 1.

Education Secretary Beverly H. Sgro said no decision has been made on whether privatization legislation will be put before the General Assembly session in January.

The hospitals in Charlottesville and Richmond treat a majority of Virginia's poor and most seriously ill patients, and train the bulk of the state's doctors. The hospitals face a widening gap between state allocations and the real costs of providing indigent care and medical education.

The study looked at three proposals: selling the hospitals, creating a quasi-governmental authority to take over the hospitals' management, or creating tax-exempt private foundations - the work of which would be largely closed to public scrutiny - to run the facilities.

Under each of the three privatization plans, several thousand non-faculty employees at the two hospitals would lose their state employee status, university and administration officials said.

Any of the three options would have to be agreed to not only by the General Assembly but also by investors who hold millions of dollars in bonds on the two facilities, officials said.

Officials from UVa and Virginia Commonwealth University, of which MCV is a part, overwhelmingly favor the authority option, while staunchly opposing the sale of their hospitals.

by CNB