Challenge issued
University hospital seeks proposal from governor
Two rejections in 10 days from Kentucky Gov. Steve Beshear of the University of Louisville Hospital’s plans to join a three-way merger prompted the hospital’s leaders to issue a challenge for the governor: Do you have a proposal that works?
“We look forward to hearing a proposal from the governor’s office that will make good on his promise to secure the financial future of University of Louisville Hospital,” University of Louisville Hospital officials said in a statement.
University officials said they thought they presented Beshear with solutions that would appease him and allow for the hospital to be part of KentuckyOne Health, a new health system formed earlier in the month by two affiliates of Catholic Health Initiatives, Englewood, Colo. The merger was supposed to include University of Louisville Hospital under a deal proposed in June. Kentuckyone is made up of 14 hospitals that operated under Jewish Hospital & St. Mary’s Healthcare, Louisville, and St. Joseph Health System, Lexington, Ky.
Kentuckyone representatives said they’re open to adding University Hospital if the governor ever reverses his decision, but Beshear and other public officials, including Kentucky Attorney General Jack Conway, continue to worry about losing control to CHI over the hospital, which they consider a public entity and valuable state asset. They also have expressed concern about the possible costs to University of Louisville Hospital if the merger were to fail, forcing the parties to unwind it.
Beshear first rejected the $620 million deal Dec. 30, and then met with University of Louisville officials, both from the school and the hospital, to discuss new merger ideas, including a new financial plan and allowing the state to retain control of the hospital. Those talks, which did not include CHI, didn’t satisfy Beshear, who rejected the deal again Jan. 9.
“Last week, university representatives offered us some ideas to address our concerns about the original proposed merger partnership,” Beshear said in a statement. “Attorney General Conway and I have carefully evaluated those ideas, but found that they will not satisfy our concerns about the merger proposal.”
The governor also countered the suggestion by University of Louisville Hospital officials that the hospital is in dire need financially and required an infusion of capital to continue to serve as the city’s primary safety net provider. Beshear pointed at the hospital’s 2010 profits, reported at about $13 million: “University Hospital is clearly a facility with significant strengths,” he said. Without an investor, hospital officials last week warned of cuts including layoffs or services reductions. The hospital responded in a statement that its patient mix included 20% to 25% indigent care: “University Hospital is unable to generate adequate capital from operations and is not a favorable lending risk.”