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Published: Wednesday, 11/16/2005

UT, MUO explore possible merger

BY LUKE SHOCKMAN AND KIM BATES
BLADE STAFF WRITERS

The Medical University of Ohio and University of Toledo are looking at a proposed "business combination" that could include merging the two institutions.

Dr. Lloyd Jacobs, president of MUO, discussed the merger possibility yesterday during his annual state of the university address, stunning many in attendance.

"I'm still in a little bit of a state of shock. It's an incredible concept," said Dr. Lawrence Elmer, president of MUO's faculty senate, who added that he's open to the idea.

Dr. Jacobs and his counterpart, UT President Daniel Johnson, said details on the proposal are still sketchy and it's too early to say what will ultimately happen.

However, the two have been discussing the matter privately since at least June 8, according to copies of e-mail correspondence obtained by The Blade yesterday.

The two university presidents said a more complete proposal is expected over the next couple of months.

Both men stressed that any closer link would need approval of their boards, as well as the state board of regents and the Ohio General Assembly.

"Today's message," Dr. Jacobs said, "is everything is on the table," including a possible merger.

"I would like to see us come out of this conversation with a strengthened relationship. It could be a merger," Mr. Johnson said. "What is the optimum relationship? That's what we're looking for here."

Board members and regents said they were open to a closer relationship, including a merger.

"Operationally and philosophically, I don't see why this can't happen," said Dan Brennan, UT board chairman.

George Chapman, MUO board chairman, offered a more cautious public position: "I believe every option has to be explored, but no one should jump to the conclusion that a formal affiliation or merger is inevitable."

"I don't think you'll get much argument [in opposition] from either board," said attorney Susan Gilmore, an MUO board member and former UT faculty member.

She called the proposal a "tremendous opportunity."

"Higher education in Ohio is such a critical piece of the economic puzzle that is so undervalued, that I think anything we can do to enhance the effectiveness of existing dollars and make it easier to attract new dollars is just critical," she said.

James Tuschman, a former UT trustee and now a member of the Ohio Board of Regents, said he supports the idea of a potential merger between the two and believes the other regents do as well. He said he also thinks it would have support among legislators.

"Unless we strike oil here in the state of Ohio, we have to do more with less. And this is an example of doing more with less," Mr. Tuschman said.

Gov. Bob Taft also supports a possible merger.

"The discussions are a positive development. These are the kinds of collaborations that can lead to economies of scale and long-term benefits for the students and entire region," he said in a statement released through press secretary Mark Rickel.

Though few details were made public, a "business combination analysis" report performed for MUO for $40,000 by Ryan Beck & Co. of New York City provides some insight.

"As a result of our analysis, we believe that the proposed combination between MUO and UT would be beneficial for both institutions as well as the state of Ohio and for the community of Toledo," the report stated.

Such a combination, the document noted, would cut administrative costs, improve the ability to borrow money, and increase grant funding opportunities.

Dr. Jacobs said the push to save money is not driving the proposal.

"This is not about belt-tightening. This is about a reach for greatness," he said.

Linking the two institutions would improve the prestige of both, as well as give a combined institution greater political clout and make it more appealing to prospective students and faculty, Dr. Jacobs and Mr. Johnson said.

"We're looking for the type of relationship that will give us the greatest potential to be a major player," Mr. Johnson said.

In many ways, it's unusual that the two institutions have gone their separate ways for as long as they have, Dr. Jacobs and Mr. Johnson said.

Both noted that few medical colleges today are "stand-alone" institutions.

Joseph Keyes, senior vice president and general counsel for the Association of American Medical Colleges, agreed. Of the nation's 125 accredited medical schools, only 20 are free-standing schools, he said.

"Medical education wants to be higher education, and being with a university is regarded as a good thing academically," Mr. Keyes said.

MUO has about 3,500 employees and a $300 million annual budget, including its hospital operations.

Nearly 600 medical students, 470 graduate students, and 1,000 nursing students attend its South Toledo campus.

This fall's enrollment at UT was 19,201 students.

The four-year university, which has 3,535 employees and a general fund budget of $257.6 million, is in the midst of a 10-year, nearly $300 million master plan upgrade. The bulk of its buildings are on its main campus along Bancroft Street in West Toledo, but UT also has a separate Scott Park campus off Nebraska Avenue and holds some classes at the SeaGate Centre and the Toledo Museum of Art.

The two institutions collaborate in many areas, including its nursing program. MUO nursing students now take the first two years of their study at either UT or Bowling Green State University and the next two at MUO.

Matt Shiple, a senior nursing student at MUO who started at UT, said he thinks a merger "is an excellent idea. ... When you're away from the university campus, you're kind of isolated from the other students and other areas of study."

The concept of a possible merger was also well received by faculty and students on the UT campus, who agreed the idea should be explored.

"I just like investigating to save costs. That's from a student's viewpoint every day," said Tom Crawford, president of UT student government. "A lot of other great universities, Ohio State, University of Michigan ... have their own med schools. Why can't we?"

Mayor-elect Carty Finkbeiner, in a prepared statement offered in response to an inquiry by The Blade, said that he supports the proposed merger.

"I believe the merger of the Medical University of Ohio and the University of Toledo will strengthen the reputations of both institutions and the educational opportunities in the city of Toledo," he said.

Contact Luke Shockman at:

lshockman@theblade.com

or 419-724-6084.



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