on a related note:
PSU-OHSU merger idea refuses to quietly go away
State representative brings idea back for third go-around
Portland Business Journal - March 30, 2007
by Aliza Earnshaw
Business Journal staff writer
Though most people at Oregon Health & Science University and Portland State University oppose Rep. Mitch Greenlick's proposal to merge the two institutions, no one is sorry he's brought it up -- for the third consecutive session.
Greenlick's bill proposes separating Portland State from the Oregon University System, much as OHSU was separated from the statewide higher education system 12 years ago.
Greenlick also proposes enlarging the board governing OHSU and having it govern Portland State, with the idea of merging the two over 10 years.
Greenlick, a Democrat from Portland who has had a long career in medical administration and academia, believes that economic progress throughout Oregon is hampered by the lack of a major research university comparable to the University of Washington, University of California at Los Angeles or Berkeley, Stanford University, and a host of others.
Greenlick is not alone in his belief. Economic development professionals often point to this gap in Oregon's portfolio.
Large research universities win more federal and private grants for research, spin out more companies, and attract higher-caliber faculty and students than smaller universities normally do.
Officials at OHSU and Portland State didn't like Greenlick's idea when he brought it up in the last two legislative sessions, and they don't like it any better now, even though it has a chance of being passed by a Democratic Legislature.
But they are taking this proposal as an opportunity to make the case that more funding for higher education -- and more consistent funding --is what Oregon really needs, not a costly merger between two big institutions with very different purposes and cultures.
The issue of inadequate state funding for its universities sharpened last week, when the Oregon House Ways and Means Committee recommended a higher-education budget that falls far short of Gov. Ted Kulongoski's proposed budget.
Oregon's level of support for higher education is source of continual friction between the education and legislative communities. The business community also is affected by the issue.
People at Portland State might be open to the idea of splitting off from the state university system, if not a merger with OHSU, said Mike Burton, vice provost at PSU's School of Extended Studies and a former CEO of regional government Metro.
"OHSU has done some things as a private corporation that have been good for them," said Burton. "Maybe we can look at those things and see if we can do them at Portland State. But first, you have to remove yourself from the state university system, and we should be able to have those discussions."
The main objection to merging PSU and OHSU is that the very different nature of the two institutions could result in a merger nightmare, and dilute the focus of each.
PSU is a general urban university, serving mostly undergraduates, and relying heavily on tuition for its funding.
OHSU is a medical school that relies on hospital revenue, research grants, private donations and tuition for its operations.
Both universities receive state funding, but that has diminished sharply over the years as a percentage of their total budgets.
Officials worry about a culture clash, added administrative burden and the up-front costs of a merger when both universities feel their staffs are already stretched to the limits.
OHSU took over operation of the Oregon Graduate Institute in 2001, a merger that has so far cost about $5 million -- a level of expense that's affordable within OHSU's $1 billion-plus annual budget.
However, a PSU merger would be 10 or 20 times larger, and cost much more, said Joe Robertson, OHSU president.
He also worries about losing professors and researchers.
"After progressive and successive cuts in funding, I don't think the faculty would believe that this proposal would be adequately funded," Robertson said.
"Our faculty is barraged by offers" from other institutions that can offer much more money. "Frankly, retention is sufficiently fragile that if you cast another element of uncertainty into it, you threaten it," Robertson said.
Dan Bernstine, president of Portland State University, wonders how PSU will manage if the state cuts its support for the university on leaving the statewide system, as it has done with OHSU.
"If we lose the $137 million we get annually from the state, and become a quasi-private corporation, that still has to come from somewhere," said Bernstine.
Lacking OHSU's vast network of hospital and clinic services, Portland State's opportunities to support itself don't begin to compare.
Scott Gibson, who serves on OHSU's board, thinks that while a PSU-OHSU merger isn't suitable, Oregon's universities could benefit from two other mergers: a single business school combining those at PSU, University of Oregon and Oregon State University, and a merger of PSU's engineering school into OSU's.
"It makes more sense to do some smaller integrations that are profound, selected and thoughtful," he said.
Merging like entities would be "more manageable, with much quicker payback" than a PSU-OHSU merger.
Some university officials are suggesting that not only PSU, but also Oregon State University and University of Oregon might be better off outside of the overall university system.
These three universities have more opportunity to win research dollars from federal agencies and others, as well as milk their relationships with alumni and other donors for endowment and building funds.
Pulling the three larger universities out of the system could leave more funding for Oregon's three smaller regional universities, which are in even more dire financial shape than the larger three.
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