University of Louisville’s Dream Partner?
A notice in yesterday’s Courier-Journal announced that the Baptist Healthcare System was changing its name to Baptist Health as it acquires the Pattie A. Clay Hospital in Richmond KY. The shorter name is a little punchier and more touchy-feely: this in keeping with the hospital system’s warm and fuzzy marketing themes. Why not?
What I had been overlooking this past year was Baptist’s expansion of influence throughout the state. If all goes as seems planned, Baptist will finalize a full acquisition in October of the Madisonville Regional Medical Center and Trover Clinic, all soon to become Trover Health. This is a prestigious high-quality acquisition for Baptist Health and I congratulate them. Baptist now has mainline hospitals in cities across the entire state including Paducah, Madisonville, Elizabethtown, Louisville, La Grange, Lexington, and Richmond. In fact, I am unaware of any other hospital system in Kentucky so well represented statewide.
Possible Partner for UofL?
If all the University of Louisville was looking for was a clinical partner with which to establish an accountable care organization, a statewide clinical referral network, or additional sites in which to train physicians, Baptist would have to be at the top of the list. Both KentuckyOne Health and the University of Kentucky are both focused in eastern Kentucky where UofL would be perceived as an interloper. KentuckyOne Health is having financial and other problems of its own. UofL and UK do not have a great tradition of cooperation on which to draw.
I had heard early on in our local search-saga that Baptist had flatly rejected an overture from UofL. If the University was smart, it would not give up so easily. Perhaps we will all be surprised next month when the covers come off the Baptist/Trover agreement. After all, UofL has been stalling its way into this Fall from making any announcements of its own. However, if all the University wanted was better clinical integration with the rest of the Louisville medical community, it should not be contemplating entering exclusive agreements that will automatically force patients and their doctors to choose sides.
Academic Affiliation Agreement With Trover Health?
Whether or not the University of Louisville Hospital is included in any way in the expanded Baptist system, the University of Louisville itself will have to be. For many years, the Trover Clinic and its affiliated hospital have been major teaching partners for the medical school. Indeed, that teaching affiliation was the centerpiece of UofL’s demonstrable commitment to training its students in a rural setting. It is not an overstatement to say that a continuing relationship is of great importance to the medical school’s accreditation. The all-controlling academic affiliation agreement between the two institutions is going to have to be rewritten. I wish I could see it.
Clinical Capacity Not the Only Goal.
However we all know that simply expanding University of Louisville Hospital’s clinical reach was not the only goal, nor indeed a major goal of the University’s quest for a new owner. Millions of dollars were supposed to flow into the coffers of its commercial research enterprise. While Jewish hospital was once a willing partner in those sorts of endeavors, I would be surprised to see Baptist Health moving in that direction. In my opinion, emphasizing research as it did was not helpful to Jewish Hospital in the long run and diverted its attention from more important hospital operations. Frankly, I think a failure to keep its priorities straight is what has also brought University Hospital to its self-described knees.
Hospital and Doctor Wars Only Going to Get Worse.
There is an extraordinary push nationally to form bigger and bigger hospital-based networks of healthcare providers. The most socially acceptable justification for these mergers and partnerships is to form “accountable care organizations” in which to provide maximally coordinated care using the best medical and administrative practices to provide the safest and most effective medical treatment. In the real world, a major goal is to become the “elephant in the room” in order to be able to call the shots in financial relationships with medical insurers or with the government. (For example, this is what has finally forced the private practices of the University faculty together to act as one, not so the University can direct them to practice at University Hospital where they are badly needed.) We have seen how this struggle of giants is playing out in Kentucky with one hospital system or doctors group or another refusing to contract with Medicaid, or Humana, or Anthem to the detriment of us patients who are only hoping for some modicum of medical care upon which we can rely and afford. Alas, I do not see that modest vision happening soon, do you?
Peter Hasselbacher, MD
President, KHPI
Emeritus Professor of Medicine, UofL
10 September 2012
After I posted this piece, I had an opportunity to speak with Bert Whitaker, the current CEO of Trover Health System. The reasons for allowing Baptist Health System to acquire the assets of the Madisonville hospital and clinic will sound familiar. The hospital is doing well currently, but wants to provide the same level of service to its community in the future. Trover is hearing the nationwide drumbeat that because of changes in America’s healthcare system, including it’s lower reimbursement and emphasis on outpatient services, standing alone will be increasingly difficult. They feel fortunate to find a partner with a similar mission. (I say both sides were lucky!)
In its search for a partner, Trover went through a long RFP process that included its community. There were many responders. All those who have spoken to me about it were proud of the process and of its final result. This stands in contrast to the machinations of the University of Louisville which operated in secrecy and whose result was unacceptable to the public of Louisville and Kentucky. There is a lesson here for the UofL administration which seems unwilling or unable to break its bad habits of back-room dealing.
I asked about what will happen to the medical training programs in Madisonville. The desire is that they will become even stronger. Trover is rightfully proud of the educational activities that help distinguish it. Acquiring a hospital with strong medical education programs was apparently also of interest to Baptist.That is a good way to attract and retain physicians for one’s system. Details such as who the signatories will be on an academic affiliation agreement are not available to me.
I asked to what extent University of Louisville Hospital might have been involved in the Baptist-Trover negotiations and I think I got a straight answer that it was not. Obviously Trover, and now Baptist will have an ongoing relationship with the University of Louisville Medical School itself. Of course this does not preclude the possibility that Baptist was or is having parallel negotiations with the University involving its Hospital. There seems to be no limit nationally on the rate of hospital and system acquisitions, but surely there must be some rate limiting factors.
I am thinking back to when Norton bought 4 Louisville hospitals at once from Columbia/HCA. It was a massive pill to swallow at the time, but Norton came out winners. A former CEO of Jewish Hospital ridiculed Norton at the time calling it (in words to the effect of) a “failed healthcare system.” Maybe Baptist perceives a lesson, but University Hospital has some staggering handicaps that are not going to be solved by money alone. I often wonder how University Hospital would have done if the University had left its hospital administrators alone to manage things solely in the best interest of the hospital, or if the University had not been so content to allow its principal teaching facility to be branded a “poor peoples” hospital. We will never know.
Peter Hasselbacher, MD
President, KHPI
Emeritus Professor of Medicine, UofL
11 Sep 2012