Norton vs. UofL Lawsuit on Front Burner Again.

Is accreditation of UofL Medical School hanging on the result?

This case has been slowly grinding through the court system since it was filed in September of 2013.  Although things had been brewing for some time, the trigger event was a letter of agreement between Norton and the University of Kentucky to work more collaboratively at Kosair Children’s Hospital.  An indignant UofL fired off a letter threatening to evict Norton physically from its hospital and retain the hospital’s equipment for itself.  UofL’s self-righteous demand was much discredited when it emerged that the University had earlier promised to turn over its pediatric service to KentuckyOne Health– Norton’s chief downtown rival that badly needs a children’s hospital for its planned statewide system.  Norton responded by filing a lawsuit requesting a judicial determination that UofL had no standing to take over the hospital to use with its new best friends. The festering boil is more than ripe to lance!

Too complicated for mortal, let alone an elderly mind.
I tried to keep track of how things were progressing but it got difficult. Most of the significant court documents are available in these pages and you can follow my earlier reports here. Along the way, Kentucky’s Attorney General joined the litigation– nominally to protect the Commonwealth’s interest in the land under the hospital– but in so doing joining formally with UofL in opposition to Norton.  Additionally, in the midst of all the action, Kosair Children’s Charities– for whom the Children’s hospital is named– joined in a tag-team lawsuit against Norton seeking to avoid having to pay the charitable funds it had promised to the hospital. (Kosair Charities is now a major donor to the University and supporter of its research.)  One or more informal and even court-ordered mediation efforts failed, somehow always at the last minute.  Special Master Commissioners were to be appointed by the court to sort out the complicated financial and legal claims made by both sides and to otherwise facilitate the progress of the litigation! It is my understanding the the Attorney General’s office is backing away from a justification to evict Norton from its hospital.  The lack of cash and a vanishing chance to seize physical control of the hospital for KentuckyOne may also be contributing to the shifting positions that UofL seems to be taking.

As an aside, it is my guess is that Norton might not feel particularly comfortable with the fact that both the Governor and his Attorney-General-candidate son (both of whom I support) were and are lawyers for the firm that is representing UofL in both of the lawsuits above.  On the other hand, this is an election year and what politician hoping to gain elected office or to protect their party wants to take sides between UofL and UK!

Even as we speak.
In the meantime, much damage is being done.  No one yet has said that my estimate of some $40 million in legal fees is too low, and the meter is still running.  The opportunity to have both Universities and their children’s hospitals working together to advance the health of Kentucky’s children (as in transplants and heart surgery) is evaporating as I write. The University of Kentucky is turning to Cincinnati Children’s Hospital as a pediatric heart surgery partner when it should have been able to partner within the Commonwealth.  Now both of Kentucky’s programs are threatened.  What UofL may claim as academic independence and prerogatives can be viewed by others as simple selfishness and greed.  The University’s students are watching their teachers and mentors use heavy-handed methods to get their way.  Surely no one is comfortable watching these two Louisville organizations on which we depend for so much, engaged in this gladiatorial combat.  At this point, even a Solomon’s judgment is going to give us a damaged child.

Since my last update.
At my update in March, UofL’s demands seemed to have shifted somewhat . The University downplayed but did not apparently abandon its claimed right to evict Norton.  Short of cash at home, UofL apparently seemed willing to settle for money.  Frankfort Circuit Court Judge Wingate noted, “what remains in this case is the issue of the amount of the reimbursement that needs to be paid from Norton. This should be able to be taken care of through mediation.”  Further proceedings were pretty much put on hold, but things did not apparently go anywhere fast.  Obviously the Judge’s rosy prediction failed to emerge.  In the meantime, UofL continues to torpedo efforts to work cooperatively with UK.  The Department of Pediatrics, and indeed University Physicians, Inc., the multi-specialty faculty practice that should have been a good thing for the University, are in bad shape financially. (How they got that way is an interesting story in itself.)

Medical School Accreditation.
I have been waiting for announcements that the UofL and the Kosair Charities lawsuits have been settled, and also for the anticipated announcement that the UofL School of Medicine has been released from its probationary status by the Liaison Committee for Graduate Medical Education (LCGME).  Neither has happened.  Given that the LCME once considered Kosair Children’s hospital and corresponding financial support from Norton as considerable strengths of the Medical School’s programs, I wonder if the LCME is also waiting for some resolution from the courts. Without a children’s hospital, one of the the Medical Schools’ strongest teaching programs gets flushed away.  Seems to me that UofL is more vulnerable to being damaged by the rupture of the current partnership than is Norton.  All of us will be damaged in any event. Whoever’s idea it was to promise to turn the school’s pediatric service over to CHI/KentuckyOne and to put that promise in writing made a disastrous miscalculation, one whose damage will be with us for some time to come no matter what happens now.

Who is running the show and does it matter?
As of today, there are only two American medical schools still on probation– UofL and Baylor College of Medicine in Houston.  I hope it is a coincidence and not an omen that Baylor is also part of the Catholic Health Initiatives system.  Of note, the University of Arizona College of Medicine- Phoenix was just put on accreditation warning by the LCME, apparently as a result of its “partnership” with Banner Health.  The reported concern of the LCGME was that the Dean of the medical school did not have sufficient control of the school or access to the university president.  In my opinion, our Dean in Louisville stands in the same shoes.  The conduct of non-educational affairs of our medical school lies in the hands of its Executive Vice President for Health Affairs David Dunn, and President James Ramsey. They are calling the shots and that would be obvious to the LCGME.  This is a critically important issue.  Following last week’s Board meeting, I am concerned that the stated priority for a promised new educational building on the Health Sciences Campus  is not as robust as is required. The priority for the HSC Instructional building will be submitted in November, “but a lot can happen before then.”

Why am I writing about this now?
The final act on the agenda of the UofL Board  of Trustees meeting was a litigation update by its lead Stites & Harbison attorney. The resulting board-resolution was made available to me by the University and is attached. The two parties appear to be having their heads knocked against each other once again.  A “mediation order mandates that by September 18, 2015, each party must submit a confidential statement outlining the parameters of two to three proposals acceptable to that party.”  [No more shifting sands of demands.  No more torpedoing of settlement by piling-on last-minute poison pills.]  “In October, each party is scheduled to meet individually with the appointed mediators,” and in November will “enter into five consecutive days of mediation.”  Of course, both parties remain free to “pursue settlement discussions separate and apart to effectuate a final and binding agreement,” and presumably not by means of an oral agreement!

Because this is planned to be a fast moving process that will likely require timely participation of the respective Boards of the two institutions, UofL management asked the Board of Trustees to allow its Executive Committee to act on behalf of the whole board.  The Board of Trustees gave such approval.  The resolution was passed, apparently without discussion and not in public session.  To my knowledge, the membership of the Executive Committee for this newly seated board has not yet even been named!

UofL has felt it has to win at all cost.
Now you know as much as I do.  I am hoping for the best.  One might think that forcing the parties to outline some acceptable positions before the actual head-to-head mediation might be effective, but I have no experience in that approach.  Surely it will make it more difficult to claim the high ground should mediation fail yet again.  And yet it might.  From the first moment that UofL announced its plans to merge with Catholic Health Initiatives, and then to form a joint venture with KentuckyOne Health, I predicted that a struggle over who controls Children’s Hospital was going to be both prominent and destructive.

When I first came to Louisville in 1984, I was called to make consultations on children in at least 3 different hospitals.  Since then, a strong Norton Kosair Children’s Hospital staffed by University and community physicians managed to rise above the internecine hospital wars of Louisville to serve well the families of Louisville and the region. I fearfully predicted in 2012 the possibility that the result of the UofL- Norton estrangement might be two separate free-standing children’s hospitals in Louisville.  We are well on the way to that result today.  Two hospitals competing for the scarce resources of money, specialty personnel, and the critical mass of patients needed to support a children’s hospital in Louisville cannot be justified.  No party should have control of this community treasure for the purpose of excluding non-network providers, or to gouge competing health plans or hospitals with unfair charges.  Who would argue differently?  Such concerns must be addressed in any mediation.

It is no secret that I have been disappointed if not ashamed of my University for the academic, ethical, clinical, and financial independence it has given away given away in exchange for support of its commercial research aspirations.  UofL may argue that it was necessary to have taken sides and that the medical community was ripping itself apart anyway.  I would like to think we could have taken a higher road.  Ironically, the scare tactic/threat of a failed University of Louisville Hospital that was used as the justification for all the perturbations above has dissipated.  However, the fact that University of Louisville Hospital is on its best financial footing ever is due to Governor Beshear’s courageous support for healthcare reform in the shape of the Affordable Care Act.  If nothing else, a state University is supposed to bring its community together, not rend it asunder.  I invite both parties to surprise us with a little courage of their own.

Peter Hasselbacher, MD
President, KHPI.
Emeritus Professor of Medicine
September 8, 2015









One thought on “Norton vs. UofL Lawsuit on Front Burner Again.”

  1. The probationary status of the UofL School of Medicine was lifted October 15, 2015. See posts before and on that day.

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