Review of UofL Hospital by Kentucky Auditor of State Accounts.

An Open Letter to State Auditor Adam Edelen.

Re: An appeal to make broad your audit of UofL Hospital.

Dear Mr. Edelen,

Although it is like pulling teeth, small amounts of information about the financing of the University of Louisville and its University Hospital are slowly becoming public. The public is aware that your office is looking at the University’s handling of its QCCT funding for indigent care in its hospital. I am writing to try to convince your office that examination of QCCT funding alone is insufficient and that to fully judge whether the state and local components of that fund are truly being used to the best advantage of the public, other aspects of University accounts must also be examined.

For example, in last week’s release of information in response to questions submitted by potential responders to the University’s RFP for a new partner, the amounts of transfers from University Hospital funds to the University were outlined to the tune of $74 million of the $430 million of hospital clinical revenues. More than 17% of hospital revenues go directly to the University! Some of this is Medicare money designated to pay the salaries of Residents, but under its ongoing veil of secrecy the University does not detail where its money came from, nor how it is spent.

Given that the University has a long history of pooling its state money and using it as it sees fit, and in the wake of the Passport and other scandals, the public is entitled to a fully justified explanation. How else can we know whether the $34.4 million of current QCCT funding is too much, too little, or just right. A dollar of money drawn from the QCCT means another dollar that might legitimately be used to support indigent care can be spent elsewhere. Indeed, I believe the whole concept of the QCCT fund needs to be revisited. Why, for example, should not state indigent dollars follow the indigent, no matter where that service is provided? Why shackle the indigent to a place they may not care to go? Does the current QCCT reimbursement formula lead to artificially higher charges to all patients at the hospital? Does having a captive patient population blunt faculty motivation to make University Hospital the most desirable and highest quality hospital in town? To make such determinations, the public needs a full audit of the University of Louisville, its Foundations and Hospital. Continue reading “Review of UofL Hospital by Kentucky Auditor of State Accounts.”

Ongoing Planning Between UofL and KentuckyOne Health.

Does all Kentucky business happen at basketball games?

I made an interesting field trip to New York City last Friday. By accident, I discovered that the University of Louisville’s Department of continuing medical education was offering a seminar in the Big Apple entitled, “What We Can Learn about Hospital Mergers, Capital Investment and Construction in a Landlocked Urban Environment.” This topic sounded familiar! Given all the excitement about religious intermarriages of hospitals, I thought it would be interesting to hear what some of the players would have to say off the battlefield. It took a few phone calls, but eventually I got my name on the list. As I learned later, this meeting was part of an annual affair for University officials and faculty going to the Big East basketball tournament. Physician members can get some of continuing medical education credits necessary for licensure. The trip also gives University representatives a chance to visit other medical schools and teaching hospitals and to talk about things like technology transfer and mergers. This year’s field trip included a visit to Mount Sinai Hospital and Medical School which had recently gone through a high-profile marriage with New York University, and an even higher profile divorce.

There were some 20 people in attendance at the conference– a pretty high-powered team. President Ramsey, Provost Willihnganz, Vice President Inman (development, governmental relations, and marketing), and the Deans of the Schools of Medicine and Education made up the starting five. On the bench were the director of the University’s Residency Programs, and various division chiefs and program directors including neurosurgery, neurology, and anesthesia. I was actually shocked to find in attendance two very senior officials from Jewish Hospital who were leaders in last year’s failed merger attempt. This was not a party to which I would have been invited had I not crashed it myself. A few of the group were obviously not happy I was there and I suspect their conversations following the scholarly presentations of the conference were guarded in my presence.   Continue reading “Ongoing Planning Between UofL and KentuckyOne Health.”

Follow-up on UofL’s Search For a New Partner:

Responses by University of Louisville to questions from potential applicants to its RFP.

On March 9, the University of Louisville released its responses to questions submitted following its pre-submission conference on February 28. Some of these answers clarified questions asked at the conference. An e-mail containing the information was sent to 36 individuals and was posted on the UofL website. Most of the recipients were University of Louisville people, but there were individuals from Norton, Catholic Health Initiatives, Baptist Hospital, Jewish Hospital, Stites & Harbison, Kauffman-Hall, Price-Waterson, Health Management Associates, and yours truly.

A total of 71 questions were responded to, or requested information provided in attachments, but amazingly little was revealed. Eighteen of the questions were dismissed with the equivalent of “read my mind,” “you tell us,” “depends on your proposal,” or “will tell you after we have decided.” Bare-bones information seems to be the rule of thumb. These were not the responses I would have expected from an organization that was seriously soliciting responses from a major-league player. “Brush-offs” is a term that comes involuntarily to my mind as I read the responses. You can judge for yourself. Please tell me in the comments section if I am being unnecessarily harsh. Continue reading “Follow-up on UofL’s Search For a New Partner:”

KentuckyOne Health Lays Off Its Lawyers.

Shouldn’t we have seen it coming?

A number of sources, including Patrick Howington of the Courier-Journal, have reported that KentuckyOne Health recently dismissed its entire internal legal department. Other layoffs in the name of “streamlining” are foreseen. This, of course, is no surprise. After all, laying people off to reduce overhead is one of the reasons companies merge, isn’t it? I mean who didn’t see this coming? In fact, during the only two-sided public debate before the last merger attempt collapsed, one audience member asked the merger proponents what they probably thought was a supportive question related to the wonderful number of new jobs that would be created– right? The merger proponents embarrassingly had to hem and haw about how that might not be the case. In fact, the hospital partners of the current KentuckyOne Health entity have been laying people off for many months. Despite lots of flashy advertising, business has not been good. Artificial hearts and occasional hand transplants do not alone a well-rounded and efficiently-run hospital make. The results of several decades of unsuccessful management will take some time to alter. I am hopeful that more attention to their core business will pay off. The downtown medical center needs all its hospitals to be willing to cooperate in the public interest. We do not have that at the present time. Continue reading “KentuckyOne Health Lays Off Its Lawyers.”

Notice of Next Meeting of UMC Ad Hoc Operations Review Committee.

Media Advisory

The next meeting of the UMC Ad Hoc Operations Review Committee will be held on Monday, March 12, 3:30 – 5:00 p.m. in the Glass Room in the basement of the Ambulatory Care Building at University of Louisville Hospital.

The published agenda is:

  • 1) Approval of minutes of 2/21/12 meeting
  • 2) Conversation with Dixon Hughes Goodman re scope and timing of their work
  • 3) Next steps


As was promised, I received this  notice on March 2.  The public is invited.  Why not attend to show that there is community concern other than mine!  Of course, I am only too happy to report for you.

The committee’s formation was announced by UofL President Ramsey last Feb 2 and its work was expected to be completed by April.  The first committee meeting was held almost 3 weeks later on Feb 21.  It was clear at that time that there was no common vision of the scope of the Committee’s work.  A consultant was hired to help define those goals and to do the work of the committee.  Next week’s meeting will be almost 6 weeks after inception with  only 3 weeks left till April.  The agenda reprinted above makes it clear that the scope of the project remains undefined.  At this rate is It is hard to imagine that much can be done over the next 6 weeks to keep on schedule for an April finish.  Indeed, the University hopes to complete its parallel RFP process and have its new/old partner on board in early April!  So why are they doing this?  There are several respected and  high-powered people on this committee, but it appears that the University is poised to do what it wants anyway before their Committee process can inform any decision.  Talk about wasted time and squandered opportunity.  If there is anybody in Louisville who feels they can trust this University and its leadership, please tell us why you think so in the comments to this posting.

Peter Hasselbacher
March 6, 2012

Universal Medicaid Managed Care in Kentucky: Month Five.

Long-term recommendations from the State Auditor, and a “Modest Proposal” from me.

Two days ago, Adam Edelen, Kentucky’s new Auditor of Public Accounts, began his term in office with a bang by releasing the results of his initial investigation of the performance of Kentucky’s four Medicaid managed care vendors. There is obviously a practical limit to the amount of information that can be collected and analyzed in a short time, and the Auditor’s office appropriately acknowledged this. Nonetheless, the results were consistent with anecdotal reports and legislative hearings, and were correspondingly very discouraging. The State Auditor offered suggestions in hopes of improving future services.

In early February, Mr. Edelen asked the Commonwealth’s four Medicaid Managed Care Organizations (MCOs) to provide his office with information from the months of November and December of 2011. He asked for basic statistics such as: the number of members served, the number of claims filed and paid, the dollar value of those claims, and the number and value of rejected claims with the reasons for rejection. (Note that we are only talking about two months.)

In a press release of February 29, the Auditor noted that the managed care organizations had received $708 million while paying out only 420 million as of February 15. That is a float of $288 million! Although there was plenty of criticism of the MCOs, the Auditor also shared some of the blame on the Cabinet which was said to have failed to learn the lessons of the difficult transition to Passport 14 years ago and was ill-prepared to monitor and enforce its contracts with the new MCOs. Continue reading “Universal Medicaid Managed Care in Kentucky: Month Five.”

UofL Meets Some Potential New Partners.

Pre-submission Conference for Request for Proposal RP-57-12
University of Louisville and University Medical Center, Inc.
Feb 28, 2012

Transitional Research Building

Investing In and Delivering Health Care Services, Education, and

Research in Conjunction with University of Louisville and University Medical Center

The University of Louisville and its Hospital have been seeking a new partner to help with their various diverse missions. I attended the Pre-Proposal Conference that was held today in UofL’s new, palatial, and seemingly unpopulated Transitional Research Building. This meeting is a requirement of Kentucky’s contracting and purchasing regulations. In addition to University folks that I recognized, there were perhaps 10 or 11 other individuals. The audience included representatives from Baptist, Norton, and KentuckyOne Health. There were two or three people whose affiliation was unknown to me. The meeting began with introductions of the 5 panel members from UofL and its Hospital: Attorney Glenn Bossmeyer, Dr. Gregory Postel, CEO James Taylor, Facilities VP Steve Amsler, and Asst. Purchasing Agent Curtis Monroe. (Mr. Amsler was previously Vice President for Facilities at Jewish Hospital/St. Mary’s. I cannot recall that he said anything at the conference. Neither did I recognize any questions asked by representatives of KentuckyOne.) Continue reading “UofL Meets Some Potential New Partners.”

Information About UofL and UMC Partner Search Requested

Can you help Public of Louisville understand what is happening with regard to the ongoing efforts of the University of Louisville and University Medical Center Inc. in their undiminished quest for a new partner before it it too late do anything about it?

Over the past few months, in our community and in this Policy Blog, there has been much discussion about the University of Louisville’s efforts to find a statewide partner for its clinical, teaching, and research programs.  Its first solution fell flat over issues of secrecy, intrusion of religious directives into academic and clinical life, giving away a public asset to a private corporation, and other substantial deficiencies.  Given the initial reactions by University officers, no one should be surprised that they are at it again.  A request for a proposal (RFP) has been filed seeking a new partner.  To my viewing, it looks like the RFP has been written for a single preferred responder, but you can judge for yourself.  Worst of all, the whole process is now cloaked in even more secrecy then the first go around.  There will be a total blackout until after the papers are signed.  There is no acknowledgment that the Governor or anyone else will have anything to say about it.  I would like to think that that is incorrect.  I doubt even the University would have the audacity to act against overwhelming concerns of the public it claims to be serving. However, I have yet to overestimate University’s chutzpah!

I have heard a number of things third-hand about how the University plans to rush this deal through to completion before the issue of whether or not University Medical Center Inc., is a private or public entity is settled in the courts.  I am therefore reluctant to repeat the information in this Policy Blog without corroboration.  If you have first-hand information about how UofL or UMC is proceeding, or if there is any continuing role of KentuckyOne Health in this saga, I hope you will contact me directly using the “Contact Us Link” in the right-sided panel of this page.  I am also interested in KentuckyOne Health’s plans for St. Mary’s Hospital.  Will it remain a hospital, or will its certificate of need be transferred to a new east-end facility as Norton did with the former Humana Southwest Hospital? I promise you, I will never reveal my sources.  If you wish, you may call me at the Institute’s number, 502.802.5092.  Feel free to contribute a comment here or elsewhere on the site..  Registration is not required.

The public deserves honesty and transparency.  Please help us to that end.

Peter Hasselbacher, M.D.
Feb 27, 2012

University Medical Center Inc., Ad Hoc Operations Review Committee Meets.

Background of Internal University Review.

Last January, the University of Louisville announced that it was forming its own Internal Review Committee for University Hospital. In large measure, this must have been in reaction to the increasing calls for an audit of the Hospital’s use of the QCCT fund for indigent medical care. Indeed, the Auditor of State Accounts had already announced he would perform such an audit. Surely the University and its Hospital must already know a great deal about its own finances. After all, having a handle on internal finances is part of the job of running a hospital. Furthermore, for several years the University had been preparing for a merger/acquisition for which both internal and external reviews by the potential partners would have been mandatory as part of due diligence. University leadership admits it knows enough about the Hospital’s finances to submit an RFP to take on a new partner. Nonetheless, there is nothing wrong with taking a fresh look at the way any business is being run. Good for them!

This new committee did not emerge in a vacuum however. The University is emerging from a period of intense criticism of the way it interacts with its community– indeed that criticism continues. In my opinion the committee’s formation at this time is also part of an intensive and comprehensive public relations effort to improve or at least paper over its image. I believe this is a major reason why the offer was made that the review committee’s meetings would be open to the public. That is a major reversal of the tactics used by the University when it tried to merge with Catholic Health Initiatives and Jewish Hospital/St. Mary’s. In those proceedings, the University attempted to operate in secrecy until the last minute when it was forced to reveal at least part of its plans. The community did not like those plans. We now have an opportunity to see if the University and its leadership have changed their spots. This jury of one is still out.

Summary of the first meeting continued below. Continue reading “University Medical Center Inc., Ad Hoc Operations Review Committee Meets.”

UofL and UMC File an RFP for a New Hospital Partner

The University of Louisville and University Medical Center Inc. seek a knight in shining armor to bail them out.

“Investing in and delivering healthcare services, education and research in conjunction with the University of Louisville and University Medical Center.”

The University of Louisville and University Medical Center, Inc. have jointly filed an RFP “to seek a business partner that will bring capabilities, experience, and commitment to include but not limited to: Critical Care, Facilities/Operations, Teaching/ Training and Research.

The following represents my initial thoughts as I read through the request for proposal (RFP) and the attached current Affiliation Agreement by which UMC operates University Hospital for the Commonwealth and the University. I apologize for typos and bad grammar. I am trading off timeliness for polish. I will attempt to clean it up in the days ahead. Because the timeline chosen by UMC and the University is deliberately and unduly brief, I would rather have something out there to work from then nothing at all.

Executive Summary
By way of an executive summary of my initial thoughts, shaped as they are by other recent events in our community, I offer the following.

The qualifications and criteria for judging responses to this RFP parallel exactly the justifications and solutions advanced at the time of the recently failed acquisition of University Hospital by Catholic Health Initiatives. I am having the feeling of déjà vu all over again. The extraordinarily short timeframe of action, together with the severely constricted avenues by which an external agency can gather information are not compatible with the due diligence that should be required of any third party not already intimately involved in the operation of the downtown medical center. The criteria for processing applications described in the RFP gives the University and UMC great leeway in whom they might select or refuse to consider. I cannot in my own mind come to any other conclusion than that this RFP was written solely with a single applicant in mind who has already signaled interest in close affiliation with University Hospital and with whom the structure of agreements has already been agreed. I cannot force the word, “sham,” from my thoughts. What a shame. I will be glad to be proven wrong.

The RFP process does not permit any public disclosure until after an agreement is signed. There is no recognition that any acceptance by the Commonwealth of Kentucky is required. The University of Louisville and UMC appear to have ignored any lessons they might have learned from the fiasco of last fall and winter. This community demanded the right to know what decisions were being made about their healthcare and by whom.

The rush to conclusion seems incongruous with the magnitude of the undertaking. I cannot personally ignore the conclusion that the haste is intended to allow documents to be signed before the Kentucky Appeals court has ruled on the issue of whether University Medical Inc. is a private entity free to do as it pleases, or whether it is an arm of the University and of the Commonwealth. What rational corporation would take on the responsibilities of this RFP without such determination made and finalized?

Many numbers are thrown out but fewer definitions and even fewer comparative data. An attempt is being made to compare our situation here in Louisville with other Academic centers around the country. This is justifiable and worthwhile, but cannot alone determine the direction our community should take. The current consultants to UMC have stressed that every medical center is different. We want ours to be different to. We want it to be better.

All the comments in this brief represent my personal opinions but I would like to think they are informed opinions. There is no one in Louisville more committed than I to the long-term survival of University Hospital as an ethical and excellent teaching facility, and for a healthcare support system for the underserved that is characterized by quality, dignity, and justice.

In my mind, the least positive implication of this rush to conclude a deal is that we will memorialize in stone for yet another generation, a segregated and second-class system of healthcare for those who do not qualify for mainstream medical services. The comments below are not mine, but I could not have expressed them better. A respected authority describes the system we have now in Louisville.

“If someone decides there are some hospitals in Louisville whose job it is to take care of the poor black and the marginalized and that it’s okay if they have to be kept waiting for a couple of weeks and it’s okay if the carpet is frayed, it’s okay if the phones don’t get answered, and it’s okay if the doctor is late, but there are other hospitals in Louisville where upper-class white people get taken care of by doctors who answer the phone on the first ring and smile a lot. There’s shag carpeting, and wood wainscoting on the wall. Was there a plebiscite … in Louisville where people voted and said they wanted to have segregated medical care? I don’t think so. But, there is a very strong theme that it’s okay for medical students and interns and residents to learn on poor people, but when you’re done, then you’ll be able to take care of private patients.”

Edward C. Halperin, MD
From: “Slave Medicine and the Banality of Evil.”
Gheens Foundation Lectureship,
University of Louisville School of Medicine, Feb 2, 2012

To participate in the above system of contemporary segregation is to participate in an evil.  I think it is time for a plebiscite in Louisville, and I trust that our citizens to favor a different set of priorities. Those decisions must not be made behind closed doors by a self-selected privileged few. The leadership of our University and our health care systems need to hear from all of us.

Peter Hasselbacher, MD

Analysis of RFP continued below. Continue reading “UofL and UMC File an RFP for a New Hospital Partner”