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.”
Just got 269 pages of documents with a summary.
The summary supports previous claims of major financial mismanagement– if not worse. Oversight by Foundation Board was feeble if not inadequate. Ramsey supporters, enablers, and apologists, and shares blame with former President Ramsey and other University executives. The so-called elite, chardonnay swilling, trouble makers who dared rock the boast and ask questions are vindicated in spades.
You can read the executive summary here.
Statements by current UofL President and Chairs of UofL Trustees and Foundation affirm their commitment to transparency and emphasize that the report reflects the management of previous administrations and boards.
Bad enough to put people in jail or to claw-back money? We’ll have to see.
More when I dig into the details.
Here is a copy of the entire document. (6.7 MB) What do you see that sticks out as either good or bad?
Peter Hasselbacher, MD
8 June 2017
At least 447 Medicare outpatient drugs had prices more than double between 2011 and 2015 and 36 increased their prices ten-fold!
In every week of recent months our attention is being called to one or another exorbitant or unexplainable increase in the price of yet another prescription drug. We have long recognized continuously rising prices for brand-name drugs, but the new business model of the pharmaceutical industry includes taking control of the distribution of traditionally generic drugs and jacking prices up even faster and higher than their brand-name cousins– if that is even possible. It appears that the more medically-necessary or lifesaving the drug is, the higher the price increases are. This is what happens in a free market environment when an industry has its consumers over a barrel and is free to have its way with them.
Some poster-children of the trend include the anti-parasitic drug pyrimethamine (Daraprim) which is essential to treat certain infections in immunosuppressed people and whose price per tablet increased from $13.50 to $750 overnight; the EpiPen injector system used to administer epinephrine to people entering anaphylactic shock; insulin for diabetes; Plaquenil, and more recently Suboxone, the drug used to help manage opioid addiction. As I will show below, there are many more drugs with recently inflated prices still cruising below the radar! Continue reading “Exorbitant Increases in Prescription Drug Prices Neither New Nor Uncommon.”
The Executive Committee of the UofL Board of Trustees is assembling now. The executive committee can act for the whole. I predict it will vote on the relationship with KentuckyOne Health. It is likely the vote will involve severance of the joint operating agreements. UMC would then take control of the entire Hospital. From what I have heard, and because of recent financial events, I will be surprised if this does not happen.
Tomorrow the State Auditor will announce the results of the audit of the relationship between the University and its Foundation. I understand that the audit will not be kind.
We will soon know more.
Endowment growth stalling compared to other institutions.
Numerous earlier reports by Mr. Chris Otts of WDRB brought to the attention of the public information about financial dealings of enough concern that at least two major donors to the University of Louisville withdraw their support, triggering in large measure an intervention by the University of Board of Trustees to take a more controlling role in the University of Louisville Foundation and a full-scale fiduciary audit. This latter offers the potential to clear the air or to lead to even more troublesome revelations. Mr. Otts’s latest report deals with unauthorized spending of the University’s endowment by the Foundation in support of its commercial research, real estate, and other agendas both known and unknown. The result has been a substantial fall in the value of the endowment as its principal is consumed.
Sparked by Mr. Otts’s use of information provided to him by the University as reported to the American Association of College and University Business Officers (NACUBO); and by comments made by Trustees Greenberg and Benz at last week’s meeting of UofL Trustees raising serious concerns about the endowment; I went to NACUBO’s website myself. Summary files for public use are available including the market values of the endowments of some 850 of the most important Colleges and Universities in the US and Canada from 1990 to 2015. I abstracted these and plotted the market value of UofL’s endowment along with its rank among other institutions in this regard. Spending information or investment yields for individual institutions are not made available to the public, although summary statistics on aggregates in broad categories are available. A static image is presented below, and an interactive version revealing the underlying data is available.
In summary, the amount of our endowment rose progressively from 1990 until around 2007 after which much volatility occurred to the point that the market value of the endowment in 2016 is indeed less than it was 10 years ago in 2006! UofL appears to be eating its nest egg, and compared to other institutions of higher education, is losing ground in endowment growth.
Financial stresses abound.
In the space of a week, Moody’s Investor Services released credit opinions for the University of Louisville and the University of Louisville Foundation; and Catholic Health Initiatives published its Annual Report for the Fiscal year ending June 30, 2016. The results were not very pretty. The rating for the bulk of the University’s existing bonds dropped one grade to A1 with an outlook determined to be stable. The Foundation did not fare as well. Its rating dropped three steps to A3 with an outlook revised to negative. Catholic Health Initiatives disclosed operating and non-operating losses totaling $667 million. CHI had declines in its own bond ratings earlier this year, due largely to excessive debt reported to stand at $9 Billion as it seeks to partner or merge with another Catholic hospital chain. The drops in grade and financial losses are by themselves troubling. However, language in the details of the reports links the organizations together, highlights the harmful consequences of recent management and political manipulations on the University, overestimates the health of current business relationships between the parties, and underestimates the impact of promised roll-backs to Medicaid and the Affordable Care Act on the financial health of our local hospitals and the University. For these reasons, I fear that things are going to get worse before they get better. Continue reading “Credit Ratings for UofL, UofL Foundation, and CHI Downgraded.”
Later this morning, the Board of Directors of the University of Louisville Foundation will meet to discuss matters crucial to its future relationship to the University of Louisville. Following the forced resignation of former UofL Pres. James Ramsey, a Foundation board comprised largely of friends and appointees of Ramsey seems more interested in protecting his legacy and image than in facing up to the wholesale loss of confidence in the Foundation by the community. Having been forced to partially lift the curtain on its internal activities, and in the face of refusal to fully disclose its confusing if not inappropriate financial machinations to University of Louisville trustees, the Foundation still clings to the incomprehensible belief that it has the right to select and oversee the outside entity that will audit its financial activities. If allowed to do so, the Foundation would thus define both the scope of such an examination and control the dissemination of its result. After all, he who pays the piper calls the tune. All this from a Board of Directors that appeared prepared to retain Ramsey as President of the Foundation and award him even more money from the University’s assets. Of course, it is possible that more than just protecting Ramsey’s reputation is at stake. As yet undocumented allegations of financial mismanagement or worse are circulating. Certainly it is in the interest of the entire University community that no doubts remain after a long-overdue, no-holds-barred audit of the vaults of the Foundation. It is follow the money time! Continue reading “Ramsey Supporters on UofL Foundation Resisting Oversight by University Trustees.”
We are not ready in so many ways.
Given that the Zika virus and the mosquitoes that carry it from one human to another have been advancing north from South America through the Caribbean and Mexico, and that parts of the USA share the same permissive semi-tropical environments necessary for the disease to spread, most public health scientists and officials have assumed that home-grown Zika disease and its sequela would show up in the course of time. Officials in North Miami, Florida believe that time has come. Even with all the warning in the world, Congress could not be persuaded to act before leaving Washington for vacation. Imagine, public health being sacrificed at the altar of political control and the national shackling of anything having to do with women’s health policy to a self-defined pro-life lobby and the religious dogma that supports it. The failure to prepare now, as it has been in the past, is all about control of the levers of power that drives political life.
People, including pregnant women who have contracted Zika virus, have been present in the USA for some time, having caught the disease while traveling abroad in endemic areas, or having acquired the disease sexually from partners who did the traveling for them. (Yes, Zeka is also a sexually-transmitted disease.) Since the virus can linger for months in various places within the human body, we can assume that transfer of the disease by nonsexual intimate contact or exposure to body fluids is also possible. Blood donors in parts of Florida are already being told not to do so, and testing of donated blood for the virus more broadly is being advocated. It is likely that Zika is here to stay for a while, if not forever. “So what?” you may ask. Continue reading “They’re Here! Zika-bearing Mosquitoes now present in USA.”
For those hoping for a “fresh start” at the University of Louisville, last Wednesday’s Board of Trustees meeting must have been more than a little disappointing. Earlier in the day, the Attorney General requested that the Board take no actions with long-term consequences until the matter of the legality of its appointment process is adjudicated by the courts. The day before the meeting, one of the newly appointed trustees resigned, presumably because his public statements about science, religion, and minorities generated too much public opposition – in my opinion a failure of the vetting process. He was replaced by another nominee from the list of 30 generated by the Governor’s Postsecondary Education Nominating Committee who also happens to be a partner in the law firm that handles the bulk of the University’s outsourced legal work. The replacement trustee is a well-respected and competent individual, and there is absolutely nothing wrong with attorneys serving on nonprofit boards. However, if I were an attorney seeking some of the University’s business, or a party in opposition to the University in some litigation, I would see such an appointment as more of the inside baseball that is often attributed to UofL. Continue reading “First Meeting of UofL Board. Fresh Start or Not?”