On Friday January 6, the relationship between Catholic Health Initiatives and its Louisville hospitals was reshuffled as Jewish Hospital and St.Mary’s Healthcare joined the rest of CHI’s Kentucky hospitals without the University of Louisville Hospital. The University still has hopes that it will be able to join the new entity at a later time. The announcement gives us some insight into what the earlier acquisition would have looked like: the New CHI-directed system will be called KentuckyOne Health, and it already has a logo.

This is a logical move for these institutions. The formerly independent Jewish Hospital was already under the effective control of CHI having merged with the former Caritas Hospital (now St. Mary’s). By all accounts, Jewish Hospital (and St. Mary’s?) were already in a desperate financial situation as their clinical services continued to unwind. The new merger has been backdated to January 1. There was probably lot of scrambling over the past week to rearrange the former deal. Somehow the phrase “having a gun to your head” pops into my mind. I have no knowledge what other offers have been made to Jewish. Obviously CHI wanted to keep the institution in its fold.

What has not been spoken of at all is what role St. Mary’s Hospital has in this new future. It was not one of the premier hospitals in Louisville before, and has lost even more of its luster since. I am being told by people who’s contacts are better than mine that the plan is to close St. Mary’s and transfer its beds to Jewish Medical Center East, much as Norton closed Southwest Hospital and opened Brownsboro East. (The plan from its construction was to turn Jewish Medical Center East into a hospital.) The new Jewish Hospital East will become a woman’s hospital to compete with Norton and Baptist just up the street and around the corner. Indeed, we are already seeing the advertisements for the new Jewish Hospital Women’s Center. Perhaps University Hospital will reduce the size or even close its obstetrics service as it sends more of its patients to the East End or even to a Jewish Hospital Downtown: certainly it will now have more competition for patients. If it had still been in the deal, my wager at even odds would have been that University Hospital would have transformed itself, or at least part of itself, into a stand-alone cancer hospital. The above predictions and speculation fit well with the facts as they are emerging. I suspected they were coming weeks ago.  I understand now why the proponents of the old deal were not willing to say that jobs in Louisville would not be lost in their new entity. I suspect we will find out in short order much of what was hidden in the prior two or more years of sub rosa planning. Continue reading “Jewish & St Mary’s Merges with St. Joseph’s. University out of deal, but very profitable indeed.”

Since the failed initial attempt by the University of Louisville to force its own acquisition by Catholic Health Initiatives, a number of current University faculty members have approached me privately to thank me for my small roll in bringing the secret agreements into public view. They told me many of their colleagues were also very unhappy with the plans.

I confess that over the last month I had begun to feel like the old dinosaur I am, witnessing the apparent extinction of traditional academic principles. The question I had for my former colleagues was, “if there were so many of you, where were your voices when the public needed to hear them?” Of course I already knew the answer: they were afraid of losing their offices or their jobs. “How could that happen” you might ask? The fact is that bullying is not just a phenomena of grade schools. Of the few faculty letters to the Courier-Journal these past months, the only three that spoke against the acquisition were from retired faculty like myself. A few administrative faculty wrote in support, but I felt as sorry for them as I did for the young (she looked young to me!) new Chairperson of the Department of Obstetrics and Gynecology who had to begin her Louisville career arguing for the University that nothing was going to change and everything would be all right.

I have not had any feedback after reprinting a critical letter allegedly sent from many senior faculty and faculty administrators to President Ramsey and Provost Willihnganz last summer. I for one am assuming it is not a forgery! In any event, we already know it was essentially ignored.   Is there anyone from the University who is willing to at least tell us how many faculty finally signed the letter? (Use the confidential “Contact Us” link on the right.)   I will not ask anyone to personally identify themselves or any other faculty member, nor will I do so. I know your concerns about retaliation are real. Isn’t that sad?

Peter Hasselbacher, MD

A Review by David Dranove,
Consultant to Jefferson County Attorney O’Connell.

In mid-December, The University of Louisville and its proposed partners, under an order from Jefferson County Attorney Mike O’Connell, released some of the previously secret documents underlying the proposed acquisition of University Hospital by Catholic Health Initiatives (CHI). Mr. O’Connell asked Professor David Dranove, a respected faculty member at Northwestern University’s Kellogg School of Management to review at least some of the materials. On December 28, two days before the Governor rejected the proposal, a four-page “Perspective” from Professor Dranove was released to the public. I am unaware if the opinion was circulated in enough time to be considered by the Governor’s or Attorney General’s Offices, but at least one phrase from the report has been seized upon by the University and its partners as a justification to soldier on.

I do not know which documents Professor Dranove looked at nor what aspects of the deal he was asked to consider. In fact, it is not obvious to me that Professor Dranove read the most important documents at all. He seems unaware that the proposed merger also involves St. Joseph’s Hospital System and invents a new name for the merged system: “CHI-Kentucky” instead of “Network-Entity” which is used throughout the documents. He admits that he was not asked to consider church-state issues. There is no mention of any specific financial details, no comment on any of the proposed organizational or administrative structures, and no possible alternatives to merger. The report discusses the current national wave of consolidations as hospitals and their captive employed physician practices face increasing competition with each other. The report seems to assume that the new Patient Protection and Affordable Care Act (Obama-Care) will favor large organizations that can serve as Accountable Care Organizations (ACOs) and be eligible for higher Medicare payments for quality. (Of course it is equally likely that such an organization would receive less money for lesser quality!) Continue reading “An Outside Perspective on Recently Failed Merger Attempt.”

What Comes Next?

Today I sent the following letter thanking Gov. Beshear for his careful approach to the Commonwealth’s consideration of the proposed acquisition of University Hospital by CHI. (PDF version here.)  I sent appropriate versions of the same thanks to Attorney General Conway and State Auditor Luallen for their roles in preparing an objective analysis for the Governor. The University of Louisville has chosen to press ahead with a modified configuration of its current plan.  The community also needs to press for an explanation of how this run-away-train of an agreement was allowed to proceed so far out of the eye of the Commonwealth and the public.  In my view, the answer lies in a fundamental shift in the priorities of the University over the past two decades.  It is time for the community to reevaluate if we are in agreement.
Peter Hasselbacher, MD Continue reading “Thank You Governor Beshear.”