In March 1949 E. B. Bowles and Hugh Callaway, state senators, and Walter P. Haynes, house speaker, introduced legislation to build the University of Tennessee Memorial Hospital and Research Center. The legislation stipulated that the center was to be a memorial to the men and women of Tennessee engaged in military service in World War II. This memorial was highly appropriate, since the need for the hospital and research center was largely based upon the proximity of UT to Oak Ridge and the availability of radioactive isotopes for use in medical research and, with an associated hospital, clinical practice.
There was considerable opposition to the project, with one of the most vocal opponents being Harry S. Berry from Memphis, a member of the UT Board of Trustees. Berry viewed the hospital as an indigent care facility serving the local area and the research center with which it was coupled as a first step toward obtaining a medical school in Knoxville, to which he was opposed. At the height of the squabble, Knoxville State Representative Kenneth Bailes introduced a bill in the legislature to divert the state’s $3 million for the research center/hospital to the construction of a field house-armory on the UT campus that would serve as Tennessee’s memorial to World War II veterans. The bill was not successful, and after considerable wrangling about funds and scaling back of the project to meet the available funds, the firm of Baumann and Baumann architects was employed to design the building, and ground was broken in November 1953.
The hospital and research center opened on August 9, 1956, with the transfer of patients from General Hospital to UT. (It was dedicated on July 18, 1956.) UTMRCH was paid for by the State ($3 million), City ($2 million), and County ($1 million), and UT, with the facility to be operated by the university. In 1964 the hospital and research center were placed under the administration of the Medical Units at Memphis. The name of the entity was changed to UT Center for the Health Sciences-Knoxville in 1975 and to the University of Tennessee Medical Center at Knoxville in October 1986. In 1988 the medical center was designated a Level I trauma center for adult patients in Tennessee.
In 1997 the board of trustees voted to request that the legislature allow it to consider alternative operating models for the hospital portion of the complex, including leasing, selling, or converting it into a separate nonprofit entity. The legislature passed a bill in 1997 allowing UT to transform the hospital into a not-for-profit organization, severing ties between the hospital and the university. Legislators included in the bill special fail-safe policies for current employees at the time of the change. At its June 1998 meeting, the board of trustees approved establishment of an independent, nonprofit corporation to manage the medical center, University Health System, and at its June 1999 meeting, the trustees approved the transfer of the UT Medical Center, Knoxville to University Health Systems. Under the transfer agreement, UT continued to own the hospital building and grounds and lease the property to UHS. And UHS was to pay the university $25 million the first year and $2.5 million each year thereafter for leasing the property and buildings.