KentuckyOne’s two acute care hospitals and its business operations in Louisville still remain on the sales block.
Soon after I clicked the button to publish last week’s update on the status of the sale of Catholic Health Initiative’s assets in Louisville, I was told by an anonymous reader that a group of capital investors was the last of potential buyers still in the game. Perhaps naively I have been assuming that only other hospital systems would be interested in acquiring the clinical operations of Catholic Health Initiatives (CHI)/ KentuckyOne Health in Louisville. I was aware that at least parts of one of the doctors office buildings next to downtown Jewish Hospital had been transferred to a new landlord. A quick look at the Jefferson County Property Valuation Administrator’s (PVA) website and a bit of Internet research revealed much more. Beginning in 2015 and finishing in the spring of 2016, CHI sold all of its local medical office buildings and outpatient medical centers (of which I am aware) to a single, investor-owned, national real-estate investment trust (REIT) – Physicians Realty Trust and Physicians Realty L. P. (Nasdaq- DOC). I must be the last person in Louisville who knew the extent of these real-estate sales. This third-party owner is now necessarily a major player in planning the future of not only the downtown medical Center, but the healthcare infrastructure of the Jefferson County region. The rents must flow! Continue reading “KentuckyOne Health Has Already Sold Most of Its Real-estate Assets in Louisville.”
The University of Louisville is trying hard to recover from what can arguably be considered its darkest hours. It has, and is still weathering challenges to its accreditation at several levels. It has been turned upside down by a string of scandals that may yet lead to criminal charges. All of this has been well-reported publicly resulting in a community consensus that a lack of transparency and accountability at the highest administrative and governance levels allowed corrupt and abusive practices to fester for years. Where there should have been openness, there was deliberate obfuscation. It is against this background that the UofL’s Board of Trustees seeks to appoint a new President of the University using a process that could not be more opaque. Faculty members, some administrators, and students who have the most skin in the game are openly critical. I am too.
The descriptors ‘open’ or ‘closed’ in reference to such a search are by themselves poorly defined. However, the recruitment process selected by the Trustees would deliver us as Deus ex machina, a new president to solve our problems, but one who would not be named until after they were appointed. Such a process meets my definition of ‘secret.’ More of the same is the last thing we need. The Board is increasingly being criticized for its retreat into opaqueness generally. Its meetings are carefully scripted and I have yet personally to hear a substantive discussion publicly. I must conclude, as I have in the past, that all major discussions or decisions occur behind closed doors. Perversely, even those Trustee representatives of faculty, staff, and students are prohibited from sharing information with their own respective constituencies – or for that matter even sharing their own opinions publically. The assumption of this posture by the Board beggars the concept of shared governance. Continue reading “The Search For A New President of UofL Must Be More Open.”
Catholic Health Initiatives (CHI) just published its financial report for the first quarter of Fiscal Year 2018– the three months ending Sept 31, 2017. One initial media report led with what CHI would no doubt wish to emphasize, that the company has cut its “quarterly operating loss by more than half.” The actual reported system-wide loss from operations in Q1-FY2018 was $77.9 million compared to a loss of $180.7 million in Q1-FY2017. This change is being attributed chiefly to more efficient purchasing and to decreased labor costs. Indeed, CHI reported a decrease of 2,667 full-time-equivalent employees over the quarter. Whether such cuts are healthy for the company in the long run remains to be seen. I await more expert financial analysis than I am able to offer and to see how the financial markets or potential new partners or asset-purchasers react. It appears these latter are not being hasty. As I plow through the numbers, I see many other measures going in what appear to me to be the wrong directions.
The report gives special attention to what has been going on here in Kentucky. [I extracted all mentions of Louisville or Kentucky from the 61-page report into a separate document available here.] The percent of operating revenues contributed from the Kentucky Region was 7.5% this last quarter compared with 16.2% in 2013. This represents a drop from 2d place to 5th place among the 11 or 12 regions or operational segments. Perhaps the most newsworthy item is the first notice of which I am aware that the anticipated (hoped for?) date for a closing on the sale of CHI’s KentuckyOne Health facilities in Louisville has been put off six months to June 30, 2018. A reasonable person might conclude that KentuckyOne is having a difficult time finding a motivated buyer for its hospitals, outpatient medical centers, and physician practices here in Louisville. I am not surprised. The return of control of University of Louisville Hospital to the University has not improved the financial performance of Jewish/Sts Mary & Elizabeth Hospitals. With respect to apparently continuing discussions between CHI and Dignity Health to align their activities, the report uses the same language it did at the beginning of this year. No substantive indication is given as to how things are going. Although some media reports use the word “merger” to describe the process, that word seems to be carefully omitted in accounts by CHI itself. Continue reading “How Close Really Is KentuckyOne Health To Selling Its Louisville Assets?”
I was both pleased and proud to read yesterday’s letter in the Courier-Journal by Ken Marshall, President of University of Louisville Hospital, recommitting to a higher quality of medical care for our community, including its most vulnerable citizens. Alas, under the clinical and management captivity by Catholic Health Initiatives and KentuckyOne Health, the hospital has performed unfavorably in virtually every quality-comparison with other hospitals, including other teaching and safety-net hospitals. Indeed, major layoffs of clinical and support staff by KentuckyOne, and concerns about quality of care by some staff physicians drew Federal attention that threatened the Hospital’s accreditation.
Various of the many items measured and methodologies used by the numerous evaluating entities have been criticized, and in my opinion sometimes rightly so. After all, what constitutes quality? One major criticism of current federal and proprietary hospital quality assments is that they do not adequately take into consideration the socio-economic status or severity of illness in the patient populations served. With all the valid current emphasis on the nonmedical determinants of health care status and outcomes, how can we not take these into consideration? Nevertheless, for University Hospital there is nowhere to go but up. Continue reading “University of Louisville Hospital Pledges To Do Better.”
Is this the last word?
The Record of Decision dated May 30, 2017 and signed by the Secretary of the U.S. Department of Veterans Affairs on October 12 makes it sound like an easy decision. The 23-page document contains only three words or phrases in the text highlighted by the VA to draw attention to the central logic of the decision.
Page 1. “The purpose of the proposed project is to provide Louisville area Veterans with facilities of sufficient capability (functional) and capacity to meet their current and projected future health care needs.”
“The proposed project is needed because the current hospital and CBOCs [outpatient clinics] are operating at maximum capacity and are unable to accommodate the projected increase in the regional Veteran population. The configuration and condition of the existing 63•year-old Louisville VAMC facility offers limited options to expand to meet these needs, and parking at the Zorn Avenue VAMC is insufficient.”
Page 7. “For these reasons, VA does not view the general locations or sites suggested in public comments as reasonable alternatives warranting additional investigation and detailed evaluation in the EIS [Environmental Impact Statement]. Chapter 2 of the Final EIS includes a detailed description of the site selection process, as well as the reasons for eliminating the Fegenbush and Downtown sites, and for not reconfiguring the existing VAMC on Zorn Avenue.”
It has not been a straight path! Continue reading “VA Declares Brownsboro Site The Final Choice For New Hospital.”
Catholic Health Initiatives (CHI) released its Annual Report for Fiscal Year 2017 last week. Given that the company is in the middle of discussions with Dignity Health about a possible merger or alignment, and the attempted sale of half of its hospital beds in Kentucky, the report is of considerable interest. I cannot pretend to understand the arcane rules of accounting underlying the numbers and discussion in the report. Others in a position to do so emphasize the increasing $585 million loss in operational income from the company’s core healthcare business, and the considerable outstanding debt of $8.7 billion. There is a reason that bond rating agencies have been downgrading CHI’s rating and assigning a negative outlook. What I intend to do below is to highlight material from the report that is specific to Kentucky, to offer a few general comments, and to ask my readers to help us interpret what is at stake for Kentucky.
Earnings Before Interest, Depreciation, and Amortization (EBIDA).
CHI uses this method of accounting to present much of its financial numbers. EBITDA is (according to Wikipedia) “not recognized in generally accepted accounting principles” but intended to allow comparison of profitability between different or heavily leveraged companies. [The ‘T’ in EBITDA is for taxes, which are less relevant for a non-profit.] It has been suggested that “EBITDA doesn’t give a complete picture of a company’s performance.” and that because it is not defined in GAAP, “companies can report EBITDA as they wish.” Furthermore, CHI lists its EBIDAs “before restructuring, impairment, and other losses.” In short, I have no confidence in my ability to interpret the financial health of CHI from this report. Can anyone help us?
Items Specific to Louisville.
From the 127-page document, I extracted all paragraphs in which Louisville (or Kentucky) is mentioned, along with the page number from the original document. A lot is stuff we already knew here in Louisville. There is a good bit of repetition, boiler-plate, and business-speak language that seemed not very specific or informative to me. Maybe that is the nature of annual reports. Allow me to highlight (in sequence) some of the mentions. Continue reading “Catholic Health Initiatives Releases Annual Financial Report.”
Lest anyone doubt Gov. Bevin’s inclination, indeed intention to intervene in the academic decisions of Kentucky’s state universities, I draw your attention to his recent speech to the Kentucky Council on Postsecondary Education (which sets Kentucky’s higher education policy and which he largely appoints) in which he “suggests” to our university Boards and administrations that they should shed whole academic programs that do not contribute to employment and economic development as he envisions it. This should not come as a surprise to anyone, because he made the same statement early in his term shortly after he celebrated his intention to open the separation of church and state more widely. Others have already noted how a broad-based general education has not done badly for the Governor personally. I will add that the Governor’s initial public spokesperson in Kentucky did not do very badly with her history major from a Kentucky college. She moved from working for a governor to working for the president of the United States.
It is my impression that a “suggestion” from Gov. Bevin forebodes a more aggressive intervention on his part. I point to the “pressure” brought to the University of Kentucky to fire a professor who was critical of one of the Governor’s healthcare policies, and his “pressure” brought on the University of Louisville Hospital and KentuckyOne Health to sever and not renew its transfer agreement to accept the rare patient from Planned Parenthood or other abortion provides who has a serious complication from surgery. (This latter matter is now in Federal Court.)
Although the Governor’s office denies any intervention on his part, in my opinion, and that of the parties being leaned on, the pressure could only have come from the Governor himself directly or indirectly through proxies. The Governor has not been shy about stating his intention to achieve his economic and religious agendas. Why should be not believe him? In my opinion, such tactics do not deserve the banal description of “pressure,” but meet the definition of bullying. We all know what happens when a bully is not confronted – the result is more of the same. University accreditors at SACS, are you watching? Kentucky elected officials and our general public, are you? Our Universities cannot fight this battle by themselves.
Peter Hasselbacher, MD
Emeritus Professor of Medicine, UofL
September 14, 2017
“Contrariwise,’ continued Tweedledee, ‘if it was so, it might be; and if it were so, it would be; but as it isn’t, it ain’t. That’s logic.”
? Lewis Carroll
I began my day yesterday morning attending Medical Grand Rounds at University of Louisville Hospital. These weekly sessions teach the principles of evidence-based, scientific medicine to the physicians of tomorrow. They simultaneously emphasize the ethical and patient-centered ideals that underly and legitimize the practice of medicine. For the physicians of today (and of yesterday like me) they provide a way to refresh and celebrate the ever-expanding knowledge of the science of medicine, and to reaffirm and share together our commitment to the highest standards of our profession.
Because I was already nearby and interested in the proceedings, I drove across town to observe the second day of trial in the courtroom of Judge Greg N. Stivers in the United States District Court for the Western District of Kentucky to hear the constitutional challenge to new Kentucky abortion restrictions which was brought by EMW Women’s Surgical Center (joined by Planned Parenthood) against Gov. Matthew Bevin and Health Secretary Vicky Glisson. Judge Stivers will pass judgement on whether the language, intent, or implementation of laws controlling transfers and transport of women with complications of abortion from an outpatient clinic to a hospital unduly burden the right to terminate a pregnancy. Continue reading “Alice In Wonderland in a Louisville Federal Courtroom.”
[Below is the full text of my shortened Op-Ed piece published on-line by the Courier Journal on Aug 8, and in the print edition of Aug 9. The complaint by Dr. Mullins and links to background and documentation are also available.]
I submit this as an open letter to the Southern Association of Colleges and Schools Commission on Colleges (SACS) and to the Louisville community. On August 2, the Courier-Journal reported extensively on a lawsuit brought against senior members of the University of Kentucky’s administration and the administration of Governor Matthew Bevin by Dr. Raynor Mullins, a distinguished senior member of the faculty of the School of Dentistry at UK. The lawsuit alleges that Dr. Mullins was fired from his non-tenured faculty position in retaliation for comments that were critical of Gov. Bevin’s plans to reshape Kentucky Medicaid– a plan intended to considerably reduce the number of Medicaid beneficiaries and cut back on benefits, including dental services. The lawsuit names as defendants “Mark Birdwhistell, UK’s Vice President of Administration for UK HealthCare; Dr. Stephanos Kyrkanides, Dean of the UK College of Dentistry; and ‘John Doe,’ described as an official in the Bevin administration.” (Dr. Birdwhistell is a major architect of Gov. Benin’s healthcare plan.) The story was picked up by the Associated Press and is appearing across the country. What is happening in Lexington is relevant to the accreditation status of the University of Louisville and the reputation of our Commonwealth. Continue reading “Who Will Defend Kentucky’s Academic Institutions Against Political Capture?”
Financial and operational stresses at Jewish Hospital likely to be taking a toll on one of the headline partnerships between the Hospital and the University of Louisville. Increasing dependence on Medicaid patients and a blossoming load of uncompensated care may be blocking access for the medically indigent and recipients of color for at least some solid organ transplants such as heart and liver.
Since the middle 1980s when I came to Louisville, Jewish Hospital has branded itself as a high tech “Heart Hospital.” It promotes the early adoption of high-technology. Indeed, a few years ago it received a special designation as a heart hospital in Kentucky from U.S. News & World Report that it would not have received had it not had a cardiac transplant program. In the middle 1990s, the University of Louisville formally shifted the private practice activities of its cardiologists to Jewish Hospital. The transplant surgeons at Jewish, to my knowledge, all have formal University faculty appointments. Jewish Hospital and the University of Kentucky Hospital are the only two hospitals in the state with a Certificate of Need (CON) for adult human solid-organ transplantation. (The University of Louisville does not own this CON for transplant.) Accordingly, this high-profile program is both important for, and a marker of the institutional health of both Louisville institutions.
For this and for other reasons, I have been writing about Kentucky’s transplant programs for the last few years. Most medical schools with a major clinical medical center consider having a transplant program as an important part of their service profile. I became concerned that although in the 1990s through 2010, Jewish Hospital performed the most such organ transplants in Kentucky, that a steadily-growing UK program overtook our own as early as 2010. My academic pride was injured. My concern included that a weakening Jewish Hospital was losing the resources or the will to continue this important program. It is after all an expensive undertaking. Continue reading “Louisville’s Human Organ Transplant Program Stagnates As Lexington’s Grows”