I have not heard any good news about Jewish Hospital lately. KentuckyOne Health and its partner, the University of Louisville remain characteristically silent about their plans. What I have heard only confirms my perception of ongoing serious problems or even frank chaos. The least troublesome news available to me was that the senior administration of KentuckyOne Health will now be located in downtown Louisville. I was quoted as saying that keeping the headquarters of this state-wide organization in Louisville was not a surprise because running University Hospital and implementing the partnership with UofL was likely to be the major challenge for the company. While keeping headquarters and a few very high-paying jobs downtown must have been appealing to the city fathers who applauded the partnership, it seems to me that everything else points to a major withdrawal of clinical actives from downtown and the southern county in favor of the East End suburbs. Let me explain how this revelation occurred to me and outline the logic of why, in my opinion, such a move is a major priority for KentuckyOne Health and UofL’s joint strategy. For the sake of discussion, I predict that Jewish Hospital will shift a major portion of its clinical activity and even beds from Jewish and St. Mary’s Hospitals to new hospital facilities at its Dutchman’s Lane and Dupont Circle locations, and turn its downtown facility over to University control or even ownership.
Troubles here in River City.
Laura Ungar of the Courier-Journal reported last week that the Chief Executive Officer of Jewish Hospital unexpectedly and apparently rather suddenly “left.” This was only the latest of a long string of unexplained departures of high-ranking executives from Jewish Hospital. This continuing lack of stability does not bode well for the hospital and makes curious minds wonder about what is really going on inside this institution. From the outside, it appears to me that things must be tough. Contacts within the hospital have told me of difficulty filling beds, doctors leaving, and of red ink. Like its sister hospitals downtown, Jewish Hospital has a high share of non-paying and under-paying patients. Veterans are not the only patients who do not want to come downtown for their medical care. In the late 1990s, the hospital was told by high-powered consultants that as an isolated freestanding downtown hospital, it was financially vulnerable. The merger a few years ago with Sts. Mary and Elizabeth was an insufficient remedy. In my opinion, the heat of the downtown hospital wars rendered other attempted solutions unobtainable.
Oil and water problems?
I am also hearing about tension, if not revolution, about how to merge the traditional UofL faculty with the historical private medical staff of Jewish Hospital. The community physicians do not want to be ruled by the academics even though UofL promised in turn that it would only give clinical faculty appointments to KentuckyOne Health physicians. The academic departments want control– indeed they may even need control for accreditation purposes. I invite readers to comment below on this difficult nut of internal medical staff merger. If UofL and KOH cannot get their medical staff working productively together, the enterprise is doomed before it leaves the gate. Turning the old Jewish Hospital over entirely to the service of the University might solve this problem for both institutions.
Expansion at Dutchman’s Lane.
Jewish Hospital made other efforts to expand beyond its downtown location to a site more convenient for paying patients. There was an aborted plan to build a hospital facility near the intersection of Hurstbourne and Taylorsville Rd. At least this would have had the advantage to the community of not setting up shop immediately adjacent to existing hospitals. Instead, Jewish built its large Jewish Hospital Medical Center East on Dutchman’s Lane to compete head-to-head with the Norton and Baptist Hospital hospitals already there. The result is a medical center rivaling, if not exceeding the downtown medical center in size, patient volume, and traffic.
I suspect that Jewish Hospital would have originally liked to build a new inpatient-hospital at the Dutchman’s Lane site, but could not get a state certificate of need to do so. It is my understanding that its current outpatient facility was built in such a way as to allow future expansion as a hospital. In any case, it can already do a large proportion of what a “real” hospital is supposed to do. As reported in Business First, KentuckyOne Health recently purchased more than 5 acres of land and buildings adjacent to its East End faculty, including most of Dupont Circle directly across the street from Norton Suburban Hospital. (Is the feud destined to go on forever in the manner of the Hatfields and McCoys?) It also recently moved its downtown outpatient surgical center out to the suburbs.
What might KentuckyOne Health build on its new land at Dutchman’s Lane? My understanding is that they can build anything there, including a woman’s hospital, a children’s hospital, or even a full-service adult hospital. KentuckyOne Health has already assembled a large OB/Gyn medical practice in the east end, although curiously, without a corresponding inpatient obstetrics service in which to practice its restricted brand of women’s reproductive health. The contract of KentuckyOne Health with UofL makes it very clear the two partners are making plans to sever the historic relationship of the Medical School with Kosair Children’s Hospital. KentuckyOne Health may feel it cannot offer full services to insurers or function as an accountable care organization unless it controls a pediatric inpatient service. The bad blood between University and Norton has, in my opinion, not abated.
If not then, how now?
If inability to circumvent certificate of need restrictions hindered Jewish Hospital’s expansion plans in the past, how can it possibly be successful now? The answer lies in the depths (some would say the bowels) of certificate-of-need regulations that hospitals use in their duels with each other and with the state. The rules allow a hospital to move its beds around within a single county using a special “non-substantive review” process without having to meet all the usual justifications for building a new facility. KentuckyOne Health can move beds from Jewish, St. Mary’s, Frazier Rehab, and even University Hospital out to a new east-end hospital. This is how Norton was able to close its hospital in southern Jefferson County and move its beds to the eastern suburbs. This is how the only hospital in southwest Louisville was downgraded to an outpatient center and should cause some alarm for those dependent on the current St. Mary’s Hospital. Furthermore, if facilities are physically connected as with a walkway, it used to be true that no state approval at all is needed to shift beds around. This is how University Hospital might easily subsume Jewish Hospital facilities.
Going for the gold.
It is not a state secret that the University of Louisville wants to expand its private practice activities beyond its major teaching hospital downtown to more lucrative suburban locations. UofL is on the record as wanting to increase clinical income to support its commercial research and academic programs. It does so despite a history of push-back from community physicians that is only going to get worse now that many physicians are employees of hospitals. I was in the room when plans were discussed to build a faculty outpatient facility at the UofL Shelbyville Road Campus. As far as I know, such plans still exist. Creating hospital and outpatient feeder networks as a way to save stand-alone intercity hospitals was one of the topics discussed last year in the middle of the RFP process at an off-campus planning session between Jewish Hospital and the University of Louisville at Mt. Sinai Hospital and Medical School. It appears to me the partners are gong full speed ahead with such plans to command a larger share of the better paying part of the Louisville regional market.
Jefferson County is awash in beds!
In my opinion, we need another hospital in Jefferson County like we need another expensive castle arena. The city is awash in hospital beds. There are 2965 Medicare-registered acute care hospital beds in Jefferson County distributed among the three remaining hospital systems. KentuckyOne Health controls the most with 1280 of these, plus additional surplus beds at University Hospital. Only University hospital is pushing the upper end of bed occupancy at 74%, but it does not even have all its licensed beds in service, using instead the rooms for administration and research purposes. It is reasonable to ask if we really need even this number of inpatient beds.
Why is this not good?
I expect many would ask the Gordon Gekko question, “What is the matter with all of the above? Competition is good!” I would ask in turn, is this the proper mission of a public medical school? How will this full-bore commercial rivalry affect the cost, quality, and availability of health care for those of us who will have to pay the inevitable higher medical bills. Competition does not lower the cost of health care! I would also ask, what will happen to essential community resources like Kosair Children’s Hospital, or for that matter, University Hospital, as their financial resources and the energy of their medical and administrative staffs are diverted elsewhere. I further ask, what will happen to the people needing health care who would be left behind. Certainly any major move to shift the locus of clinical activities by any of the downtown entities will, in my opinion, accelerate an economic decline of downtown louisville by decreasing the number of jobs and reasons to come downtown. Empty office space, empty incubator space and labs are already in evidence! The downtown medical center will likely further evolve into a place set aside for the care of poor and underserved.
We as a community already tolerate a segregated healthcare system where the disadvantaged and people of color are diverted to “acceptable” facilities that have been by no means equal. In none of my review of the acquisition and partnership documents between University Hospital, Catholic Health Initiatives, or KentuckyOne Health have I seen this disparity of health care addressed head on. What I have seen instead are plans to maintain a two-tier system and make it even easier to leave University Hospital to the poor. Is this the solution that turned the Governor and Attorney General from skeptics into cheerleaders for the KentuckyOne Health/UofL partnership? Tell me I am wrong, but show me the proof.
Peter Hasselbacher, MD
President, KHPI
Emeritus Professor of Medicine, UofL
Feb 22, 2013
What I see happening is a construction of a 150-250 bed hospital at Northeast, a 100-150 bed Hospital at South, and the construction of a new heart/transplant center at Northeast. I then expect the Jewish Hospital buildings to be transferred to University Hospital for a “New University Hospital” with the old University becoming an Ambulatory Care Center/Out-Patient Cancer Center. The University buildings are showing age and the shiny and empty buildings of the Jewish Hospital could be too much to resist. This approach would preserve a presence for KentuckyOne in downtown while moving the most profitable services to areas where they would like to increase their market share. The “New University Hospital” would be able to keep some of the current patients at downtown and would have an “upscailing” effect on University Hospital.
Additional commentary on this issues can be read in the Blog entry of March 13. Photographs of the land and buildings in play can be viewed here.
I am told that the medical staff at Jewish Hospital have just been briefed on future plans. Anyone wish to perform a community service and tell the rest of us? Use the confidential “Contact KHPI” link in the sidebar if you wish.
I was not surprised that KentuckyOne Health would keep its corporate offices downtown. The information that was new to me was that the offices would be located in one of the satellite buildings of the Jewish Hospital complex instead of the current location in the Rudd Heart and Lung Center. In my opinion, the spectacularly opulent executive offices there, built during the era of multimillion dollar chandeliers, sent the wrong message to the Louisville community and contributed to the financial distress of Jewish Hospital. I am more interested in learning what will be done with that space or who will be comfortable sitting in it. I propose turning the office space over to the Department of Family Medicine of the University. There is a policy statement I would like to see made!
Addendum: It was not until I looked back at Laura Ungar’s report that I noted that KentuckyOne Health will receive payment from the state and city to add headquarter jobs to Louisville. Seems to me they are getting taxpayer money to do something they would have done anyway. It’s not like they are closing all other offices elsewhere in the state. How many times can we promise away the same tax money to private entities? Seems to me that Stadium Albatross will be soaking up all incremental growth in tax revenues for decades to come! Surely other local businesses would like that kind of public largess.