University Hospitals Authority details indigent-care funding, OU Health finances and a request for a new pediatric heart hospital

Randy Dowell, CEO of the University Hospitals Authority and Trust, and CFO Diane Galatian briefed the Appropriations and Budget Subcommittee on Health about OU Health’s finances, the authority’s historical governance, and a proposed pediatric heart-hospital capital request.

Background and governance: Dowell summarized the authority’s history — hunting back to the early 20th century — and the 1998 public–private transition that placed hospital operations with a private operator. He said OU Medicine Inc. was established in 2018 to return the health system to an Oklahoma‑based 501(c)(3) and to keep operating surpluses in-state for medical education, research and clinical programs. The University Hospitals Trust is the trust entity that owns campus properties and is the trust’s sole member of OU Health.

Indigent care and recent appropriations: Dowell reviewed a long-standing statutory arrangement in which the state subsidizes indigent inpatient care at university hospitals. He said the state’s recent appropriations to cover that obligation — designed to support Medicaid supplemental payments and hospital financial stability after pandemic pressures — have helped OU Health’s bond rating and liquidity. Dowell said the hospital generated an improving operating margin and cited an estimated net income for the current fiscal year, subject to audit, while noting pandemic-era contract-labor and supply pressures drove earlier losses.

Pediatric heart hospital request: CFO Diane Galatian outlined a proposed pediatric heart hospital project with an estimated cost of $294,000,000. The authority presented a budgetary ask of $20,000,000 in FY-26 to move the project forward; Galatian said that figure was illustrative and reflected a sample debt-service payment on a hypothetical bond issue. She said the authority preferred options that minimize interest expense, such as legacy capital or one-time cash, and requested a collaborative discussion with legislators about the financing approach, debt sizing and whether some appropriation could reduce lifetime interest expense.

Other updates: Dowell credited the Legislature with support for emergency-department upgrades, pediatric behavioral health expansion, and Stevenson Cancer Center research funding and noted OU Health’s growth in outpatient activity and medical residency positions. He said mission-support payments from OU Health fund university research and education programs and described those transfers as variable and tied to operating performance.

Committee questions and next steps: Members pressed for documentation on OU Health’s financial metrics, mission-support payments and the structure of any debt servicing proposed. Dowell and Galatian said OU Health publishes audited financial statements and agreed to follow up with detailed financial files and to meet with members to walk through bond and payment scenarios.