First Oral Arguments in Norton Healthcare vs. University of Louisville

Last Wednesday, I made a field trip to Frankfort for what is to my knowledge, the first face-to-face extended oral argument between the University of Louisville and Norton Healthcare over Norton Kosair Children’s Hospital. It is easy for me to get lost in the sequence of the legal proceedings, but nominally the hearing was over Norton’s motion to dismiss UofL’s counterclaims to its original motion of last year for Declaratory Relief from UofL’s attempt to seize physical control of its Children’s Hospital. (You see what I mean?) As I understand it, even if Norton were to succeed this week, the legal dispute between the two parties would not be over. Nonetheless, the two-hour hearing laid out the major positions and tenor of both parties and was instructive.

A representative of the Office Of the Attorney General weighed in with an opinion that the Cabinet was interested in a resolution of this matter, but opined that it was “premature to dismiss” U of L’s counterclaims. Much was covered, more than I am competent to deal with. Both parties kindly provided me with copies of their briefs and some exhibits so you can read these documents for yourself. [See below.] My take-away based on the arguments of the two parties, the input from the Attorney General’s office, and comments by the Judge, is that this matter is far from over. Judge Wingate is being asked to make a judgement of Solomon. I do not envy him. Continue reading

Catholic Health Initiatives Annual Report, FY 2014.

KentuckyOne Health still losing money– But how fast?

CHI riding a wave of acquisitions?

Once again Chris Otts of WDRB is first in our region to report on the release of Catholic Health Initiative’s (CHI’s) annual financial report for FY 2014. Data from the financial report shows continuing losses in CHI’s Kentucky operations of $69 million for the fiscal year ending June 30, amounting to a loss of 3.2% of Kentucky revenues. This compares to a modest profit of $33 million in FY 2013. I do not claim to fully understand such financial reports [help requested!], but Mr. Otts notes that the loss is stated before deducting financial expenses that would make the numbers worse.

Good news or bad?
Is this good news, or bad news for KentuckyOne Health, CHI’s business arm in Kentucky? Recall that towards the end of FY 2013, KentuckyOne reported accelerating losses of $134 million for the nine months ending March 31, 2014, and also forcast a $218 million budget deficit for FY 2015. This indicator of of potential financial disaster prompted layoffs of hundreds of Kentucky employees and announcement of plans to reduce and consolidate services. Mitigating this employee reduction was the hiring of positions focused on improving collections. How is this working out? I cannot say. The company is already 4 months into FY 2015 without a public financial update. I wish I could say I am hearing more good news locally than bad.

I refer readers to Mr. Otts’ report above which includes comments from KentuckyOne’s spokesperson, Barbara Mackovic, that the company is “on track” to reduce its budget deficits. Further savings are hoped for through additional consolidation in the downtown Louisville hospitals, increasing further my concerns about diminution of the status of University of Louisville Hospital. Highlighted as examples of investment in the Kentucky system are modest ($9 million) improvements to the emergency room at St. Mary and Elizabeth Hospital and a $1 million expansion of the Breast Care Center at St. Joseph East in Lexington. Promised investments in the partnership with University of Louisville have to my knowledge not been made, or at least not announced. (Invitation to UofL– Give us the good news please!)

Digging in a little deeper.
KentuckyOne and the University of Louisville have been very guarded about revealing much or anything of their internal operations in Louisville. Given that the two organizations use public money to manage a public hospital that has important safety-net responsibilities, and to run the clinical and teaching operations of our state medical school, in my opinion the degree of transparency and accountability provided is grossly insufficient. This is especially relevant given available accounts of substantial deficiencies and problems in the school and hospitals. I am surprised that our governmental representatives have not required more accountability. Therefore, given that the financial reports of CHI are one of the few windows available into the internal machinery of the KentuckyOne/UofL partnership, I take this opportunity to extract additional insight from what is available. Continue reading

Corporate Integrity Agreement in Angioplasty Abuse Case.

What comes after the fines? Which is worse?

Now that the initial round of federal legal proceedings against St. Joseph Hospital London and King’s Daughters Medical Center (KDMC) over false billing, improper financial relationships with physicians, or provision of unnecessary cardiac services has closed, I have largely lost track of where things stand. Civil proceedings by patients against the hospitals and several physicians are ongoing in Boyd and Laurel County courts where plainiff and defense attorneys have been busy.  Surely the federal monetary settlements and ongoing lawsuits have damaged the reputations and finances of the two institutions. The heavily promoted cardiac surgery program in London was closed. Cardiac patient volumes at KDMC have fallen to the point that they are referred to as an issue in its bond ratings. At least one physician working at St. Joseph London was sentenced to prison. Two other physicians from that hospital recently signed settlements of their own with the U.S. Department of Justice paying $360,000 to settle allegations that included payments for illegal referrals and having entered “sham agreements” that concealed their financial relationships with St. Joseph. Other hospitals and physicians that have similar contractual relationships must certainly be scrambling to make repairs.

Corporate Integrity Bludgeons.
I recently obtained a copy of KDMC’s 61-page Corporate Integrity Agreement (CIA) made with the Department of Health and Human Services Office of Inspector General as part of its federal settlement. St. Joseph agreed to what must be similar CIA language. Indeed, previous experience with CIAs by St. Joseph London’s new senior officer was emphasized in a recent announcement of his hiring. Continue reading

Ebola in America Exposes Weaknesses Of Healthcare System.

American medicine and public health fail their Ebola stress-tests.

A reader asked me why I was not writing about Ebola. I considered doing so, but I have no special expertise in the disease itself. I had concluded that there are enough experts– self-professed or otherwise– churning the waters. I could have used the opportunity to reinforce my feelings about how badly information about medicine or other science is communicated to the public by some sensationalistic commercial news industries. I was embarrassed at how some public health officials violated one of the first laws of medicine taught to medical students– “never say never or always.” Much credibility was lost when it was inappropriately claimed that “it can never spread here,” as the number of Ebola contacts that needed to be followed rose to triple digits, the number of cases acquired in America went from one to two, and as those with incubating disease or risky exposures walked, flew, or sailed among us. American medicine is infrequently humble and Americans don’t like to be told what to do.

It was troubling to watch public and political figures who knew less than I pontificate and pander to advance their own agendas. I was sympathetic but not surprised that my fellow citizens are so easily manipulated or frightened about the wrong things. Influenza and tuberculosis kill millions of us worldwide and are much more infectious than the current strain of Ebola.(One case of tuberculosis on an airplane can infect a number of other people.)   Thus is proved another law of medicine: “the devil we know is not as scary as the devil we do not.” I worked in hospitals in the 1970s when a Lassa fever victim came to New York City, and in Philadelphia when Legionnaire’s disease was identified. I can personally attest to the truth of this latter aphorism!

What might I offer?
On reflection, the impact of Ebola virus in America confirms my belief that the American healthcare bubble is bursting– albeit in carefully documented slow-motion and in response to a piling-on of other factors. Some comment is in order. One dictionary’s definition of a “bubble” is a “good or fortunate situation that is isolated from reality or unlikely to last.” I believe this describes healthcare in the United States today. The irrational exuberance that fueled the real-estate crisis of 2008 and the tech-bubble earlier in that decade is compounded in healthcare by an unjustified optimism in how much American medicine has to offer, or how much profit can be extracted without killing the goose.  Will half of us be paying to take care of the other half?  The most recent indicator I could find was that in 2011, 18% of our gross national product was going to pay for healthcare.  In 1994 it was 13.6% and in 1950 is was 4.4%.  Surely– and especially as my baby-boomer generation enters its dotage– this is not sustainable!

Following the real-estate bubble that plunged the United States and the world into recession, virtual “stress-tests” were applied to banks to judge their financial health. Some were quite sick. Few were completely well. I put to you that the Ebola virus is only the most recent stress-test telling us that our non-system of health care is in its sickbed if not in need of the last rites.  Continue reading

UofL Hires New Director for Bone Marrow Transplant Program.

One program or two?

I had not planned on writing quite so soon about bone marrow transplantation, but in doing my background work on U.S. News & World Report’s designation of the James Graham Brown Cancer Center as a regional high-performing cancer program, I learned that the Center has just recruited a new director for their bone marrow transplant program. Dr. William Tse is an experienced clinician and academician, was recruited from West Virginia University, and will begin in Louisville in early November. This was a fast, high-priority recruitment for the University of Louisville and the Brown Cancer Center following the loss of several clinical and research faculty faculty to the University of Kentucky, and a requirement for a minimal number of specifically-trained physicians to retain essential accreditation. Bone marrow transplantation, part of the growing field of cellular or stem-cell therapy, currently plays important part in the treatment of leukemia and other malignant diseases, and of inherited genetic disorders. Cellular therapy comprises a prominent part of the University’s commercial research portfolio.

Things looking up?
I had the opportunity to speak with one of the program’s current physicians who is optimistic about the future of the program. Although I was not given the updated procedure numbers for the two programs, I am told that they are on the way back up, as are are the numbers of clinical research protocols planned. Here is a chart updated with numbers of bone marrow transplants in 2013 as reported to the state. Continue reading

University of Louisville Hospital Designated as Best Regional Hospital for Cancer in Louisville.

Kudos to my colleagues at University Hospital.

jgbcancercenterI recently wrote about the disappointing representation of Kentucky’s hospitals in this year’s 2015 version of US News & World Reports list of Best Hospitals. Of Kentucky’s approximately 130 acute-care hospitals for adults, not a single one achieved national ranking in any of 16 different specialties. Nine Kentucky Hospitals were designated as a “Best Regional Hospital” by having one or more of 16 specialty services considered “high-performing” as defined by scoring in the top quarter of all eligible hospitals for that specialty nationally.

I went on to discuss what are in my opinion some of the difficulties and shortcomings of current attempts to rank hospitals for quality and safety. I reinforced US News’s stated intent that their program was designed to identify hospitals best suited for the most difficult cases where the services of large, high-volume teaching hospitals with abundant in-house technology might make a difference. Hospitals not on their lists may still provide high quality routine care. With a focus on cardiology and cardiac surgery, I also discussed how the mix of data elements examined can boost or diminish a given hospitals standing [and perhaps even add fuel to the current technology arms-race among hospitals].

University of Louisville Hospital makes list of Best Regional Hospitals.
I made my points and was prepared to put the matter aside when two things happened that prompted this follow-up article. The first was another full-page advertisement in our local newspaper– this time proclaiming the University of Louisville Hospital’s James Graham Brown Cancer as the “Best in Louisville for Cancer Care.” I served in that hospital for the greater part of my clinical career and was tickled and proud to see one of its former competitors joining in praise of it. I too wish to congratulate the Cancer Center of the University of Louisville. [In the spirit of full disclosure, I am a patient of the Cancer Center and have a vested interest in its quality!]

Continue reading

Recent Court Decisions Impact University of Louisville Hospital.

Same-sex marriage advances– hospital secrecy recedes.

While I am sure it is coincidental, I find it ironic that on the same weekend the Supreme Court refused to take on the same-sex marriage issue in Washington– thus making such marriages legal in 11 additional states– the Kentucky Court of Appeals ruled that University Medical Center Inc. is indeed a public agency. I wondered what was happening to that lingering litigation. I will try to assemble and post the various briefs from the trial and appeals courts and try fill in the gaps. The opinion gives a useful overview of hospital history. Read it here.

The stories are linked.
From my perspective, the two stories are linked because of the intrusion of religious dogma into the administrative, research, and clinical operations at University of Louisville Hospital, and indeed at UfoL itself. One of the first things KentuckyOne Health did when they took over management of University Hospital was to take away longstanding benefits to employees in legal same-sex marriages and committed domestic partnerships— a rather cruel way to save a few dollars I thought. KentuckyOne and the University claim that the hospital itself is now a private institution, can follow their own rules, and is immune to the accountability demanded by Kentucky’s Open Records Act. Jefferson County Circuit Court, Kentucky’s Attorney General, and the Appeals Court all took a rather different view, albeit for different reasons, and returned our hospital to its public. KentuckyOne and its partners now have to decide whether to appeal the decision to the Kentucky Supreme Court. I suspect they will. Avoiding exposure of what lies behind the curtain has become reflex in University matters. Continue reading

Initial Release of CMS Open Payments Program Deeply Deficient.

As a teacher I give a grade of D- with a C+ for effort.

Yesterday I began to dig into the first public report by the Center for Medicare and Medicaid Services of their Open Payments program, also known as the Sunshine Act. Under this part of the Accountable Care Act (ACA), some (but not all) payments and transfers of value to physicians and teaching hospitals by pharmaceutical companies, medical device manufacturers, and group purchasing organizations must be reported. There is little doubt that such payments powerfully influence the practice of medicine for better, but mostly for worse. Initial reporting in the media finds individual physicians and organizations scrambling to justify or to correct the often very startling amounts received.

I still believe the program is a great idea. The public has no idea of the extent to which industry has captured the health policy market, including the professional activities of physicians and other practitioners. Much will be learned by focusing on the outliers on both ends of the curve are already emerging from the mass of data. Indeed, I hope to be able to contribute myself. Nonetheless, in fairness to all involved, it must be recognized that this was a deeply flawed implementation. Continue reading

Sunshine Act Data for Industry Payments to Physicians and Teaching Hospitals Now Available.

Data for Kentucky extracted and available for use below.

Quick overview provided.

The Center for Medicare and Medicaid Services (CMS) released the data yesterday for the first iteration of its long-awaited, much-debated, and rollout-impaired Open Payments to Physicians Program, commonly referred to as the Sunshine Act. Federal law now requires that pharmaceutical and medical device companies disclose a variety of cash payments and other transfers of value to physicians and teaching hospitals. The rationale is the justifiable concern that such payments influence the practice of medicine in an undesirable manner. The Open Payment Programs and other releases of previously hidden information are in response to the demands of the public for more transparency and accountability in healthcare finance and delivery. I think is it a good idea, but we are going to have to learn as we go how to understand and use the information.

Some preliminary observations from “Identified” General Payment File only:
• 4069 Kentucky physicians received a total of $6.6 million in payments for non-research purposes.
• One physician received $230,609.
• An additional 6 physicians received more than $100,000.
• 131 physicians received more than $10,000.
• 50 physicians received more than 100 individual payments each.
• On the other end of the scale, 1810 physicians received less than $100.

Here is a simple scattergram of total payment amounts to each individual KY physician. The curve is heavily skewed to the left. A few are major recipients, most are at the free lunch level. Not included here or in the bullets above are the the many payments from the “de-identified” file for which the names of the physician or hospital are not yet resolved. (See below) Continue reading

U.S. News & World Report’s Best Hospitals— Do we have any in Kentucky?

U.S. News & World Report (USNWP) recently released its newest iteration of “Best Hospitals 2014-15.” It did not take long for hospitals around the country to begin to use that newsmagazine’s endorsement in their marketing materials, including offering licensing and advertising fees to USNWP for the privilege. Readers of this health policy series of are aware of my unaltered position on the importance of transparency and accountability in our national system of medical care. However, you should also be aware of my increasing skepticism that existing attempts to distill complex clinical or medical financial information into simple icons or letter grades to represent safe or quality medical care are not yet ready for prime time. Indeed, by themselves, such “ratings” can be unhelpful or even misleading in assisting an individual to select a hospital for a specific need. In Kentucky we have seen previously highly-rated services shut down when the facts on the ground were revealed. Continue reading

Additional Court Documents Available In Kosair Charities v. Norton Healthcare.

court-jacketI made another pilgrimage yesterday to Jefferson Circuit Court to review all the available public documents in this internecine dispute. In particular, I had not seen the various affiliation and other agreements between the two parties. It seems to me the case will hinge on how these agreements are interpreted.

This time I got lucky and was able to photograph everything in the official court jacket including Norton’s motion to dismiss Kosair Charities’ complaint, and Kosair Charities’ response.  Accompanying as attachments to these motions were a number of major agreements made over the last 30 years between the two organizations. Links to all the items are presented below.  Frankly, I have not yet had time to analyze all the documents, but it appears that most of the major arguments on either side are now out in the open. I will try to get my head around them. I confess I do so with a sense of sadness. Any help in interpretation would be appreciated. Let me know if I got any of the links wrong.

The Attorney General’s Office filed to intervene. My interpretation of the documents is that the request to join the case as a plaintiff was approved.

I had a specific interest in why Plaintiff Kosair Charities requested that Judge Perry recuse himself. I anticipated that the grounds for such a request would be made available to the public, but the recusal and transfer of the case to Division 13 and Judge Fred Cowan was made without additional comment. I suspect that the pace of the case will slow a bit as it wends its way to its new home.

Peter Hasselbacher
President, KHPI
Emeritus Professor of Medicine, UofL
Sept 5, 2014


Court Documents in Kosair Charities Committee v. Norton Healthcare,

Jefferson Circuit Court 14 CI 02523jacket-cover-court-docs Continue reading

Crunch Time for UofL Bone Marrow Transplantation Program.

bmt-ky-1999-2012For the 30 years in which I have been associated with the University of Louisville, it’s bone marrow transplantation program has been a feather in its cap and that of the James G. Brown Cancer Center. The University of Louisville Hospital holds the Certificate of Need (CON) for adult bone marrow transplantation in Louisville – one of the tiny handful of programs that other local hospitals could not take away or did not want. Therefore I was concerned when I began to hear of doctors-lounge gossip that the program was going through a difficult patch. Unfortunately, a review of publicly available information validates my concern. Continue reading