KentuckyOne Health To Sell Its Major Assets In Louisville.

Beginning last Thursday, word began trickling out to journalists and the public that KentuckyOne Health, a major regional unit of Catholic Health Initiatives (CHI), was preparing to announce plans to sell almost all its hospitals and medical centers in Louisville and a handful elsewhere in the state. I had been told earlier in the week that the announcement would be made today, Monday, but there were so many leaks that KentuckyOne sent an email to its employees outlining its plans.  I presume KentuckyOne wanted take control of the message before the reportage dam broke. The email can be read here.

For those of us in Louisville, the only major facility not being sold is Our Lady of Peace, a psychiatric hospital.  Both of KentuckyOne’s acute care hospitals, (Jewish Hospital and Sts. Mary and Elizabeth Hospital), the Frazier Rehabilitation Institute, and all four outpatient Medical Centers (Jewish East, South, Southwest, and Northeast) are on the chopping block. Nearby Jewish Hospital Shelbyville, which recently underwent a critical review by the Inspector General for an EMTALA violation, is also for sale.  KentuckyOne employs many physicians. The fate of individual owned- or contracted medical practices in Louisville and elsewhere is not clear to me from the email. Continue reading “KentuckyOne Health To Sell Its Major Assets In Louisville.”

Indigent Hospital Care in Louisville at a Crossroads.

Both state and city contributions to the QCCT charity care fund are no longer needed and have now been eliminated.  Will funding be needed again if Medicaid expansion is reversed? If so we need a better way to provide medical services to this population.

Perhaps the most innovative aspect of the 1983 contract under which Humana assumed management of our state-owned University of Louisville teaching hospital was the Quality and Charity Care Trust Agreement (QCCT).  In exchange for a fixed minimum of financial support from the City of Louisville and the State of Kentucky to fund indigent inpatient medical care, Humana promised to provide all necessary indigent care to eligible citizens of Jefferson County and to a limited number of out-of-county individuals.  It appeared to me at the time that the arrangement worked well, but I came to realize that as a consequence, the brand-new University Hospital would be explicitly defined for the community as a trauma center and poor-people’s hospital.  To the extent that University Hospital inherited the mantle of the formerly segregated Louisville General, University Hospital remained the place where people of color, those at the margins of society, or those served in the teaching clinics of the medical school were expected to be cared for. Private patients were admitted elsewhere. The Hospital has yet to shed this unfortunate constraining heritage. I have written a fair amount about this program. Continue reading “Indigent Hospital Care in Louisville at a Crossroads.”

Potpourri of Health Policy Issues in June.

My cup runneth over with potential issues to explore.

June has been a busy month both locally and nationally insofar as things I like to write about. The shame-on-me is that I have not carved out enough time to do so!  In part I am still picking up the pieces after my early spring travels. Exploring how to unpack and deal with the new Medicare prescription drug data base also took a lot of time.  The truth is that I am a slow writer handicapped by a default and probably over-wordy professorial style.  I haven’t even been able to update the Institute’s Facebook and Twitter pages!  What follows is a list of things that occured during the month that I wanted to write about and hope to do so in more detail later.  These are not necessarily in chronological order or of importance.

The Supremes Rock & Rule!
We were presented with two back-to-back major decisions by the U.S. Supreme Court. The first, King v. Burwell, allows federal subsidies of health insurance premiums for low income individuals and their families to continue even if their insurance was purchased in states that chose to allow the federal government to operate their health insurance exchanges.  The lawsuit brought by Obama/Obamacare-haters to limit premium support to insured individuals in states like Kentucky that chose to operate their own exchanges would have essentially gutted the Affordable Care Act (ACA) and tossed millions back into the uninsured category. For the time being, Obamacare stands intact for at least the next year and a half, despite promises by opponents to throw up additional challenges. All our legislators should be working together to deal with a major remaining deficiency of the ACA.  The Act has been very successful in decreasing the number of uninsured people, but it makes little headway against the exploding costs of unnecessary, marginally effective, or for that matter even necessary medical care.  Continuing to forbid the federal government to negotiate over the prices of drugs is a case in point. Subsidies were deemed necessary for a reason! Continue reading “Potpourri of Health Policy Issues in June.”

It’s Official. Louisville Contribution to QCCT Indigent Care Fund Cut to $5 million.

Some Had Advance Warning

The Board that oversees the Quality Community Charitable Trust that helps support medical care to the indigent and medical needy was apparently given advance notice of this latest reduction in government contributions. From $7 million yearly (since at least FY2012-13) the amount has been reduced to $5 million, a 29% cut. Although the state used to contribute substantially more than the city, the two units of government contribute (at least for now) at essentially the same level. No explanation or justification for the reduction of the QCCT appears anywhere in the Metro budget. In fact, the single mention of the QCCT at all is in its line-item entry.

What lies ahead?
The handwriting on the wall is clear for this once-innovative program that cast University Hospital as the poor-people’s hospital of Louisville and made it easier for other hospitals to contribute less than their fair share. A combination of multiple changes in the QCCT partners, a crack-down by Medicaid on the methods used to finance the fund, and a scathing audit of oversight and management practices led the way. An increasingly difficult budget situation in both Frankfort and Louisville, and the anticipation that the Affordable Care Act (ACA) would reduce the amount of indigent and medically-needy care necessary provided either the coup de gras or the excuse for state and local governments to back further away from their commitment.

As I have argued many times in the past, this is not necessarily an undesirable result.  As long as our community demands that the healthcare system care for all comers to its doorstep, there must follow a corresponding expectation of community support to help pay for such services. Our community is no healthier than its sickest member, and whether it is paid for from private insurance, government funding, charity, or some provider’s other pocket– the risk of the few must be spread over the resources of the many. I believe however, that we need a different system locally (if not nationally) to share the assumed obligation. Continue reading “It’s Official. Louisville Contribution to QCCT Indigent Care Fund Cut to $5 million.”

Is the QCCT Agreement That Supports Indigent Care Still In Force?

Current agreement outdated, parties in arguable default.

Is less or more support for University Hospital necessary?
The indefatigable and prolific reporter Laura Ungar covered last week’s board meeting of the Quality and Charity Care Trust (QCCT ) for the Courier-Journal. Apparently the meeting was largely informational with no formal action taken. It was reported to the QCCT board that the percentage of uninsured patients for the first three months of this year decreased to 13% from 23%. This is good news of course, but University Hospital, like all other hospitals and safety-net providers, remains appropriately concerned about the ultimate effects of the accountable Care Act on overall provider revenues. All of us have our fingers crossed. Time will tell.

The substantial decrease in state funding for the QCCT that emerged from the recent Kentucky legislative session from the current year’s $18 million to $6 and $4 million in the next two years was obviously a subject for discussion. Apparently Louisville Metro is also decreasing substantially its annual local government contribution from the current $7 million, but this the first I have heard of that additional reduction. [Anyone out there who can clarify things for us?]

Funding and implementation of current program obscure at best.
What caught my eye and stimulated this article was a statement that in addition to the specific yearly state legislative appropriation, that the University of Louisville augments the state total from its own “fixed general funds” in the amount of an additional $5 million. As hard as I have been trying to learn about the finances and administration of the QCCT, this latter source of funding was also news to me. I confirmed from a University spokesperson that this additional funding is linked to the controversial and mysterious “rent” that has been paid by University Hospital to the University. This “pass-through” of money from University Hospital to the University of Louisville, to the state, and back to the QCCT for clinical care is part of a long-standing intergovernmental transfer (IGT) mechanism used to pull down matching Medicaid money for the state’s use.

Note that previous declarations of the “rent” paid by the Hospital to the University spoke of $8,876,993.  I am not confident that everyone is talking about the same thing!  When talking about public money, it should’t be this confusing. Continue reading “Is the QCCT Agreement That Supports Indigent Care Still In Force?”

Governor Steve Beshear Exercises Line-Item Vetoes on State Budget.

Gov. Beshear used his line-item veto on the state budget passed by the General Assembly to alter two higher-education education items. They relate to the Kentucky Community and Technical College System, and to the University of Louisville.

With regard to the former, the Governor altered language with the intent of giving more leeway to the governance of KCTC to use agency bonds and fees to fund capital projects on their campuses. With regard to the latter, the Governor reduced the University’s role in evaluating its own need for QCCT funding for indigent care or the effect of the reduction in the amounts appropriated. Continue reading “Governor Steve Beshear Exercises Line-Item Vetoes on State Budget.”

Kentucky Legislature Restores Partial Funding for QCCT Indigent Care Fund – Sort of.

Amounts in House budget reduced.
Strings attached.
Meddling in Metro-Louisvile’s business.

The Kentucky House and Senate completed an increasingly contentious budget process last night after a weekend of behind-the-scenes horse trading. (The multitude of coal severance earmarks were also restored– a not-unrelated observation.) I suspect that few people actually believe the accompanying bilateral declarations of how well the two political parties worked so wonderfully together in the public interest. The lyrics of Kumbaya are known by heart in Frankfort: “Someone’s laughing, someone’s crying, someone’s singing, and lots of people are praying that things turn out all right!”

The 253 page document (House Bill 235) is only an outline of the various administrative units and projects receiving public funds, or of expenditures for which legislative approval is required. A summary of changes made in-conference is available here. No one can read it without recognizing the large number of earmarks that are the price for securing votes. The budget document also provides an indicator of the priorities of Kentucky’s State Universities and Community College system. Their itemized requests for public funds (or for permission to spend other money) make up 20% of the total budget document! I will write more about this latter use of the document later. In this article I summarize the partial restoration of funding by the legislature of the increasingly complicated and controversial QCCT indigent care program used to support inpatient services at University of Louisville Hospital. Continue reading “Kentucky Legislature Restores Partial Funding for QCCT Indigent Care Fund – Sort of.”

QCCT Fund for Indigent Care Takes a Further Beating in Kentucky Senate.

As reported in these pages earlier, the Governor’s budget (and that of the House) decreased QCCT funding for indigent care at University Hospital by 70% percent over the next two years. The justification for this decrease was that the new healthcare reforms being put into place would result in fewer patients showing up for care at Louisville’s designated poor-people’s hospital. Perhaps there were other reasons too.

QCCT gets zeroed out.
The Senate’s Budget Committee upped the ante by immediately eliminating this subsidy altogether! Senate Republicans justify this further decrease with an amazingly cynical bit of political sophistry. Senate Republicans argue that because every person in Kentucky is now eligible for some form of health insurance, that no patient will be eligible for QCCT funding in any case. Some folks may actually believe this. Of course not even the most ardent defenders of the Accountable Care Act (ACA) claim that everyone will be covered by the complicated system of programs and options that could be cobbled together against intense partisan opposition. Among other reasons, out-of-pocket costs to patients will still present a prohibitive barrier for many. Failure to fund the full “traditional” $21 Million program releases University Hospital from its obligation to provide care to all comers. There will still be plenty of work to go around for all Jefferson County providers to take their share. Continue reading “QCCT Fund for Indigent Care Takes a Further Beating in Kentucky Senate.”

QCCT Funding for Indigent Care: Back in Play Again.

Massive Cut Proposed in State’s Biennial Budget for Indigent Care in Jefferson County. Time for a new game-plan?

I knew I was going to have to write something more about the Quality and Charity Care Trust (QCCT) when I saw that the Governor’s budget was slated to decrease the annual appropriation substantially from $21 million to $9.5 and $6.15 million in fiscal years 2015 and 2016 respectively. That represents a 70% reduction and would surely be a body blow to University of Louisville Hospital.

I am unaware of the rationale behind the proposed reduction, but together with the decreasing contributions from the city of Louisville, it is clear that our state and local legislators are rethinking the appropriateness of the QCCT funding mechanism as the principal means to support the care of medically indigent of our community. I have argued that they are correct to do so.

The QCCT fund to support inpatient care at a public University of Louisville Hospital may have made sense in the early 1980’s, but I do not think it does any more.  Much has changed, including the amount of funding and the rules regarding its use.  Our healthcare providers and our community itself have also changed. This was never a funding system that should have been considered to operate in perpetuity. Perhaps the Governor’s Office knows something that we do not. Continue reading “QCCT Funding for Indigent Care: Back in Play Again.”

UofL Required to Trade Sports for Indigent Care!

Well… maybe.

A few weeks ago, Louisville’s Metro Council approved with only few changes the 2012-13 Budget prepared with Mayor Fischer’s administration. The University of Louisville had protested strongly over what it called a “reduction” in the funding of the QCCT fund that goes solely to UofL for indigent care, and incidentally makes it possible for the hospital to transfer large sums to the University for other undisclosed purposes. In reality, the net amount for the University’s benefit was the same as it has been. The Mayor and Council rightly refused to play the same misleading bookkeeping game of payment and rebate. Looming over our local deliberations was a threat by some state legislators to reduce their contribution to the QCCT fund by the same amount as any reduction by local government. This despite the fact that Frankfort has been playing its own version of a shell game with UofL for just as long, and indicates that many in state government are also losing their patience with current University leadership. We are left with having to parse the meaning of the word “reduction.”

Initial reports of the Councils deliberations told of added language to the effect that if the City’s income were better than projected, additional funds might be given to the University through of the QCCT. No demands were made on the University to become more transparent and accountable in its use of the money as others, including Metro Council have requested. It seemed that once again, the University had gotten what it wanted through bully and bluster. I waited to see the final budget language, and now that it has been published, I am quite surprised. Here is the exact language added as it appears in the Public Health and Wellness portion of the approved budget. Continue reading “UofL Required to Trade Sports for Indigent Care!”