No, OHSU is a privately owned hospital and medical school. It also has a lot of research. The NIH (National Institutes of Health) provides grants to scientists all over the nation, to private and public institutions alike. The grants are merit based, not institution based. OHSU was recently in the news because
Brian Druker from OHSU came up with the worlds first CURE to cancer. Granted, it was to a very specific and not very common type of cancer, but never-the-less, it was a huge breakthrough. Phil Knight donated $100,000,000 to create the
OHSU Knight Cancer Institute and appointed Brian Druker to head it up.
There does need to be some overriding projects, that cross state line, or benefit the greater good. Like the science I mentioned earlier. There are scientists in every state, but if the same money was divvied up by state, there would be some science that deserved to be funded based on merit but because it was in a state crowded by science institutions, the money would run out, While some science that did not deserve to be funded would get funding because it was in a state with fewer scientific institutions. This same issue can cross to many other areas aside from science.
Also, many businesses would leave states with higher taxes (they do this already, but the issue would be magnified) to go to states with lower taxes, or to states with a weaker economy so they would draw funds from wealthier states. I agree that the federal government needs to be shrunken, but there are still many areas where having a federal government is much more conducive to smooth operations and can actually save money or better allocate funds.