University Hospital – Public or Private? UofL still wants to be the Judge!
Thanksgiving Day delivered a gift to the Citizens of Louisville in the form of a report by the Courier-Journal’s Andrew Wolfson that Judge Martin McDonald has rejected the hospital’s claim that it is a private corporation. The judge echoed my opinions and those of others that the University has “spent a lot of time trying to dream up legal fictions to maintain control” of the hospital. “Maintaining control” means that the University and its hospital have been able to hide the financial and other performance information that lie behind its claim to be in dire financial straits and justifying its recent handover to an outside private corporation. Despite at least three recent external and highly critical management audits of the hospital and its indigent care operations, the University has not had to provide a financial audit to justify the massive amounts of money it has funneled away from its Hospital’s bottom line.
Only last week, the Commonwealth signed off on a highly troublesome set of documents that transfers control of most of the clinical operations of the University and much of its academic and financial independence to KentuckyOne Health, part of a nationwide Catholic health and hospital system. In my opinion, the Commonwealth lost an important opportunity to settle this matter once and for all before its virtual endorsement of the University’s warrantee that UofL had the “free and clear ability and authority” to enter such a comprehensive reorganization of its governance structure. Indeed, the Academic Affiliation Agreement to which they Commonwealth was a signatory, appears to further immunize the University and its new partner from having to disclose “all information that relates to or is used in connection with the business and the affairs” of the new partnership.
No new information that was the subject of the lawsuit by the Courier-Journal, WHAS-TV, and the ACLU of Kentucky has yet been released. I rather suspect that the University will appeal Judge McDonald’s decision and that this case will linger on for a long time to come. In the meantime, the Commonwealth has given the University the operational right to define its own obligation to the Open-Records Law and public accountability at a time when the stability of the healthcare system of Louisville is in jeopardy.
In my opinion, the new partnership documents make a show of transparency but limit any audit to governmental agencies for formal inquiries under conditions set out by the University. The language describing what the University is willing to reveal is in tangled legal gobbledygook, but seems to me to be designed to make it difficult, if not impossible, to find out what the Hospital and University are doing with their public funds. The University has been very successful in keeping this control in the past and I must therefore use that as a predictor for what they are likely to attempt in the future.
The only reason the University’s last attempted merger deal failed was because Jefferson County Attorney Mike O’Connell demanded that the University and Catholic Health Initiatives produce the documents for public review. Once that happened, the deal designed in large measure to pump money into the University’s commercial research enterprise and which compromised the University’s independence crashed and burned. The University’s strategy to avoid this fate on the second go-around was to bury the concept of transparency and accountability even further. Sadly, they got away with it. It is also my opinion that despite the glowing public relations rollout of this new arrangement and its potential financial benefit to the University, neither the Commonwealth nor the public has any idea of what is coming. I believe this is a travesty the public will only learn about after the fact.
The relevant documents that have been made available and my initial analysis of them are available elsewhere in these policy pages.
Peter Hasselbacher, M.D.
22 November, 2012
Request: I would like to read as many of the court documents in this case as are available to the public. Can anyone provide them to me, or tell me where I can go to look?