UofL-Norton Dispute over Norton Kosair Children’s Hospital: Documents and Statements

The prominent dispute between Norton Healthcare and the University of Louisville over who controls what at Louisville’s Norton Kosair Children’s Hospital broke into public view the day I was leaving for a two week cruise around the British islands. I have been scrambling to catch up ever since. Due to the magic of technology, I was able to post two initial articles from the Amsterdam Airport and the middle of the Irish Sea.

There has also been much local media attention ably reported by Terry Boyd of Insider Louisville, Laura Ungar of the Courier-Journal, David A. Mann of Business First, Devin Katayama of WFPL, and others. Our local television outlets also covered the story. The matter spilled over to the national media. It is a great story for journalists!

Show Us the Documents.
Many statements have been attributed to the various players at Norton and UofL. Naturally, each wants to advance their particular viewpoints and each claims to be acting in the public interest. Some of the statements reported seem contradictory to me.

My instinct throughout this policy blog has been to go to primary documents and data wherever possible. In that spirit, I intend to use this post to assemble all primary documents and official press releases to make them available to the pubic. Therefore, I begin a list below of material I have available now. I will add to it as more become available.

Invitation to UofL and Norton.
I have seen emails and been shown other information intended for your internal use, but I am unsure of my right to make these public. I invite both parties to allow me to post the documents and internal communications to employees underlying their dispute so that the public can make reasoned judgments of their own. Because this matter is so important to Louisville and the Commonwealth, I do not think your argument should be conducted behind closed doors. We have a valid right to know the facts. In particular, I invite both Norton and UofL to send me their Affiliation Agreements, past and present, as well as the “Term Sheet” so frequently referred to in their legal letters. What is it you are really arguing about?

In the background.
There are another players mentioned in these documents whose relationship with UofL unavoidably and inextricably involves them in this matter: Catholic Health Initiatives and KentuckyOne Health. In fact, because KentuckyOne Health is now managing the Certificate of Need process for expanding the number and type of NICU beds at University of Louisville Hospital, I would say it is right in the middle!  Clinical and academic agreements exist between UofL and KentuckyOne that are highly relevant and of legitimate concern to Norton and the medical community. I have written about these before. Therefore, I also invite UofL and CHI/KentuckyOne to make their current affiliation and partnership agreements and other relevant documents available to us. In the meantime, I will summarize again in another article what I was able to extract from earlier public merger and partnership documents.

Continue for list of documents and statements.

Available Documents and Official Statements.

• Agreement to seek lease to build new hospital on former Louisville General Hospital grounds, 8/12/1981.

• Announcement of Norton-UK partnership by Norton, 8/22/2013.

• Letter from Norton’s Steven Williams to UofL’s David Dunn, 8/23/2013.

• UofL’s Notice of Breach & Demand- legal letter to Norton, 8/27/2013.

• Norton press release summary, 8/28/2013.

• Norton’s lawyers responding to UofL’s lawyers, 9/4/2013.

• Norton responds to Frequently Asked Questions about controversy, 9/6/2013.

• Norton gives notice of court request for declaration, 9/6/2013

Complaint for Declaratory Relief by Norton with Attachments (added 9/11/2013)
 Body of Complaint, (9/6/2013)
• Notice of Default & Demand Letter from UofL, (8/27/2013)
• Norton’s Official Reply to Notice of Default, (9/4/2013)
• Master Affiliation Agreement between Norton and UofL, (11/15/2008)
• Lease with Commonwealth, (12/8/1981)
• Agreement to Enter Lease between Norton & UofL, (8/12/1981)
• Report of Attorney General, (12/29/2011)
• Letter of Intent Between Norton & University of Kentucky, (8/22/2013)

Exchange of Letters January 2014
UofL’s Version of Events.
Norton’s Version of Events.
UofL’s newest Lawyer’s letter.
Court Filings, Jan 21, 2014- 
Dates and subject of hearing.
Text of letter from 
Steve Williams to David Dunn, Jan 15, 2014

Mediation Ordered Feb 2014
Letter from Governor and Attorney General to Norton and UofL, Feb 3, 2014
Motion to require Norton Healthcare to enjoin the Commonwealth, Feb 2014
Motion to require mediation, Feb 2014

• UofL’s Answer, Affirmative Defenses, and Counterclaims Against Norton Healthcare1-29-2014 (pdf 2-2 MB)

•  Exhibits to UofL’s Answer of 1-29-2014
A.  KentuckyOne withdraws language of right of first refusal to enter pediatric affiliation agreement with university of Louisville, 9-10-2103.
B.  Lease on land under Children’s Hospital, 12-8-1981.
C.  Agreement to enter lease agreement. 8-12-1981.
D.  Affiliation Agreement, 1962.
E.  Agreement for Provision of Pediatric Critical Care … July 2006
F.  UofL threatens breach of lease if not given access to Norton’s Board of Trustees Executive Meetings including closed executive sessions, 2-14-2011.
G.  Norton’s attorneys argue such full access is illegal and improper, 2-15-2011.

Kentucky Attorney General Intervenes, July 2014:
The full text of the Attorney General’s pleadings can be downloaded here.
• Pleading re. intervening in Norton Healthcare v. University of Louisville.

Material from Fall of 2014:
• Norton’s Motion to Dismiss UofL’s Counterclaims, 6/6/14, (PDF 1.2 MB.)
• Attachment A, Affiliation Agreement of 2008. (PDF 1.5 MB.)
• Attachment B, Letter of Intent Norton & UK 8/22/13, (PDF 1.9 MB.)

• UofL’s Response to Norton’s Motion to Dismiss, 8//29/14, (PDF 0.9 MB.)
• UofL Suplemental Response to Norton’s Motion, ?Date, (PDF 0.2 MB.)

• Norton Motion to withdraw claim of breach by UofL. 10/22/14. (PDF 0.1 MB.)
•Exhibits 1-11. (PDF 6.5 MB.)

(Additional material added as it becomes available)


Links to Other Coverage.

• WFPL in Louisville
Insider Louisville
Business First Louisville

(If you wish to have your organization’s coverage included, please send me a link by email.)


Peter Hasselbacher, MD
President, KHPI
Emeritus Professor of Medicine, UofL
September 10, 2013

2 thoughts on “UofL-Norton Dispute over Norton Kosair Children’s Hospital: Documents and Statements”

  1. Peter:

    This has been a frustrating struggle to watch from the sidelines. Dunn has made statements that are inaccurate…illustrating either poor understanding or an effort on his part (or those around him?) to revise the facts to suit his position. Example: Dunn recently stated that 3 years ago all of the care at KCH for NICU patients was provided by UoL physicians. I’ve been providing care for NICU patients at KCH since 1989…and have had gratis faculty status with UoL off and on as it has served the political objectives of their dept of Pediatrics. 2-3 years ago and until recently, the NICU was serviced by 2 private neonatal practices: Neonatal Associates (now merged with UoL as of January 2013), and Neonatal Intensive Care Experts (merged with KCH as of November 2011 and currently monikered “Kosair Children’s Hospital Neonatal Specialists”). NA had a tight affilliation with UoL at that time but all of their members received the lion’s share of their income from their private practice, NICE had gratis faculty status and our members paid a Dean’s tax for the privelege.

    7 years ago NA & NICE had come together to propose a 3 way agreement with Norton to allow improved neonatal care and help KCH reverse a trend of loss of Kentucky territory to aggressive competition from Cincinnatti, Nasheville, St. Louis & Indianapolis. At that time NICE had over 50% of the neonatology at Norton/KCH as assessed by an outside consultant when framing the collaboration. That collaboration was successful and together we reversed the trend of KCH’s loss of patients to competing referral centers surrounding KY by expanding KCH’s presence through the opening of satellite affiliated L II NICU’s at Frankfort (NICE), Henderson (NICE), Owensboro (NA) & Paducah (NA).

    The collaboration was ended by NA leadership with their citing emminent merger with UoL…earning a windfall financial bonus for NA’s leadership (NA kept the accounts receivable for KCH patients, taking advantage of a flaw in the original agreement). Immediately afterward NICE’s 7 senior partners worked for nearly 4 months without pay to keep the practice solvent. Shortly thereafter and after being frustrated by inability to revive a relationship either directly or through UoL with NA, NICE approached Norton KCH to explore a NICE/KCH merger. This move was spurred in large part when NICE became aware of an effort on NA/UoL’s part to “close” the NICU to any non UoL practice through the then “on track” effort to achieve a reformed collaberative agreement between Norton & UoL.

    KCH has succeeded because it was a joint effort between private and academic pediatric practicing physicians. A few key early players profited by taking advantage of being “private” or “academic” as it seemed most advantageous. UoL’s pediatric program deserves credit for being an important PART of KCH…but they have never been 100%. And UoL affiliated practices have not always been the leaders in keeping up with national standards of health care…e.g. NICE was the first neonatal practice in Louisville to have fully trained Neonatologists in-house 24 hours a day 13 years ago (a national standard at level III NICU’s in other large metro’s even at the time).

    Recently (and prior to NICE joining KCH) I watched UoL’s fumble result in the sudden evaporation of their entire pediatric nephrology division. KCH administration respected UoL’s desire to remain in charge of their internal affairs…but had to shoulder the additional financial burden of funding interim help from outside the program while UoL recruited.

    UoL is in charge of their financial decisions. Those decisions have brought them to an unsustainable situation where they can no longer meet what has been a growing financial demand on Kentucky One, Norton, Baptist Hospital system and others. UoL should get their financial house in order and focus on their core academic objectives: teaching & research. UoL already has more clinical responsibility in neonatology than their residents and medical students can provide (in recent decades academic programs have been forced to scale back NICU exposure for residents and fellows because this had become a counterproductive manpower sink). They need to abandon their apparent objective of generating revenue through the control of 100% of pediatric care in Louisville. We work very hard providing clinical care for our NICU patients…and make less than those in senior positions in UoL’s neonatal practice. We know our patient’s families are glad we’re at Kosair Children’s Hopital, and we don’t want to leave. I am glad to have UoL physicians work beside me to care for the patients in our community. But I don’t feel that UoL does an entirely satisfactory job of managing themselves…I and my patients would suffer if yoked beneath UoL’s management.

  2. The full text of Norton’s Complaint for Declaratory Relief and its attachments are posted above. The attachments are of particular interest as they include the actual Lease with the Commonwealth, the current Affiliation Agreement between UofL and Norton, and the Letter of Intent between Norton and the University of Kentucky. Note that the Affiliation agreement is not specific to Kosair Hospital, but covers all academic activities at Norton Healthcare. (There used to be a lot of them.)

    A quick read-through in the middle of the night did not reveal any new bombshells but the documents deserve a careful examination. I hope you will help me.

    I further invite the two parties to send us copies of the “Term Sheet” and the changes UofL requested that seem to figure so prominently in your dispute.

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