Category: Hospital Mergers

Catholic Health Initiatives Reports Increasing Financial Losses in Kentucky.

Last Thursday, Chris Otts of WDRB News may have been the first to report on Catholic Health Initiatives’ (CHI) most recent quarterly report to its creditors covering the 90 days ending March 31, 2014. Meant to be read in conjunction with last November’s audited annual report, the current unaudited update covers the first full year that CHI has controlled “substantially all of UMCs operations” at University of Louisville Hospital (ULH). The news report focused on the fact that KentuckyOne Health, the manager of CHI’s multiple hospital-related operations in Kentucky, had lost an additional $134 million on its “faith-based” hospital operations over that 90-day period. This stunning loss comes on the heels of an earlier report that KentuckyOne had lost $100 million in the six months ending December 31, 2013.

More than just financial data is provided.
The full report is in the public domain. My reading confirmed what was reported by others. However, I was struck more by other tidbits of information that confirm or add to our knowledge of what is happening behind the surgical drapes hung to to keep the rest of us from assessing the health of this hospital system of which a public asset is part. Continue reading “Catholic Health Initiatives Reports Increasing Financial Losses in Kentucky.”

Changes Coming to Downtown Louisville for KentuckyOne Health.

Not so bad so far!

I have been scanning the usual media outlets for some clue about what went on at the Tuesday institutional town meetings that Jewish Hospital announced publicly last week. I am finding nothing, nor have I any idea what was discussed.  I have a feeling that if something big had been revealed, that we would have heard of it by now. KentuckyOne and the University of Louisville continue to keep the lid on pretty tight.

What I did find was a YouTube video message from KentuckyOne’s CEO, Ruth Brinkley. It contained nothing particularly surprising or controversial. Its principal function appeared to be to calm employee anxieties that arise naturally during rapid institutional change. It begins by telling the “good news” that half of the $218 million budget deficit has been made up through the hard work and sacrifice of employees, although no details are offered. It restates the obvious, that major change takes time and is difficult. Employees were told that no further large-scale layoffs were anticipated.

Patient referrals and provider recruitment.
Other successes announced include increased referrals to system physicians and mid-level primary care providers through the “Anywhere Care” tele-health initiative or from referrals through HealthGrades. Fifty-eight new primary care providers of a variety of professions have been added to the network.

Employees are told they can help by speaking well of and conveying their pride in the organization to their family and friends. They are urged to select KentuckyOne primary care providers. Suggestions for cost-saving measures from employees are solicited with special recognition awarded for measures that are adopted. Much of the rest of the message is a restatement of the goals of the organization including improving the health of Kentuckians. It is noted that the challenges still facing KentuckyOne are not unique to it. [I agree.] Continue reading “Changes Coming to Downtown Louisville for KentuckyOne Health.”

Troubles Persist at King’s Daughters Hospital.

Settlement proceedings with federal agencies ongoing.

A measure of the difficulty facing our Louisville Hospitals.

Last March I gave an update on the struggle of King’s Daughters Hospital in Ashland, KY to recover from the abrupt decrease in patient volume and income following the disclosure of a Federal investigation of their cardiac program. Several years of financial boom and building turned into a bust of multi-million dollar losses and a downgrading of their bond rating. A paragraph in their FY2013 Audit led me (and pretty much everyone else) to believe that the hospital had reached a settlement with the Department of Justice and Inspector Generals’ offices. My efforts to obtain a copy of the settlement from Kentucky authorities was unfruitful despite apparent cooperation with my request. A report in today’s Modern Healthcare gives the reason why as well as an interim financial update.

The jury is still out!
In fact, settlement discussions were indeed in progress but are not final. The $48.9 million mentioned in the footnote of the audit referred to a reserve set aside to cover any fine and associated legal costs. The Hospital corrected the misleading language.

“Standard accounting principles require a reserve be set to reflect potential exposure for legal matters once the amount can be reasonably determined. Unfortunately this accrual was reflected in the audit footnote disclosure as though a final settlement agreement had been executed. While it is true King’s Daughters has been in ongoing negotiations with the Department of Justice, a final settlement has not occurred. King’s Daughters will update this notice if a final settlement with the Department of Justice is reached.”

Ongoing losses despite some improvements.
As of March 2014 the hospital reported a 13.5% decrease in admissions and a 15.2% decline in patient days for the year. Meaningful savings in operating expenses were won and the state’s expanded Medicaid program led to a decrease in “self-pay” uninsured patients. These gains were lost to unspecified severance benefits, and consultant and legal fees. The hospital, like others, continues to pay a heavy price for its alleged angioplasty-misadventures. Continue reading “Troubles Persist at King’s Daughters Hospital.”

D-Day Today for KentuckyOne Health?

Waiting on KentuckyOne Downsizing Day.

By all accounts, today is the day KentuckyOne Health will begin to reveal the first steps of its plan to decrease expenditures by $217 million before the end of Fiscal Year 2015. Specific details were not offered at the time the cuts were announced, but nothing was taken off the table. It seems likely that some hospitals or outpatient facilities will be closed or sold. We should expect to see clinical programs eliminated or consolidated rather than trying to offer everything everywhere. We will surely see terminations and reassignment of staff members.

None of this is in intrinsically inappropriate. KentuckyOne has to balance its books. There is much duplication of clinical services in Kentucky, but unfortunately also many areas with limited resources. The challenge for KentuckyOne is to achieve a balance of downsizing, consolidation, and redistribution of services in a way that does not give the appearance of compromising their goal of providing excellent care to Kentuckians at prices they can afford. I wish KentuckyOne well. One of my principle objections to KentuckyOne’s operations is that it is using its publicly funded healthcare system in public facilities as a vehicle to promote the religious objectives of its owners. It may even be possible that some of KentuckyOne’s financial problems stem from its position on religion-based healthcare. That may be a problem KentuckyOne cannot fix on its own. Continue reading “D-Day Today for KentuckyOne Health?”