LOUISVILLE, Ky.—The University of Louisville took an initial step Thursday toward merging its health care system with two large health care providers in a potential partnership to combat Kentucky’s persistent medical woes.
UofL trustees authorized university President James Ramsey to sign a letter of intent aimed at combining UofL Health Care with Jewish Hospital & St. Mary’s HealthCare/Jewish Hospital HealthCare Services and Catholic Health Initiatives and its Kentucky-based operation, Saint Joseph Health System.
The merger would include UofL Hospital and the James Graham Brown Cancer Center.
Ramsey touted the partnership as a way to strengthen UofL’s research, medical teaching and outreach in lean budgetary times. The network also would pack a strong medical punch in a medically underserved state plagued by high rates of cardiovascular disease, cancer and diabetes, he said.
“Yes, this is a financial transaction,” Ramsey told the school’s Board of Trustees.
“But more than that, this is a transaction to improve the quality of health care for the people of our community and our state. And at the end of the day, that’s what brought our three organizations together.”
The combined organization would boast more than 3,000 physicians throughout Kentucky with some 91 locations. The three potential partners have combined revenues exceeding $2 billion.
The statewide network would be governed by a community board of trustees.
The action by the UofL trustees came amid predictions that UofL Hospital and the medical school would face “downward pressure” on its revenues as a result of the federal health care overhaul.
As part of the arrangement, Catholic Health Initiatives has pledged to invest more than $300 million into the partnership. CHI President and CEO Kevin E. Lofton said in a statement that he sees the proposed network as “the means to implement a new model of care to improve the health” of Kentuckians.
Gene Woods, CEO of Saint Joseph Health System, said it would take months to work out details of the partnership. Issues to be hashed out include what it would be called, he said.
Health-care analysts point to a national trend of hospital mergers.
Kemp Dolliver, a managing director in the Boston office of Nashville-based Avondale Partners, told The Courier-Journal that there are benefits in forming an alliance with a university medical center.
“The academic center’s going to have higher-end services … that most other hospitals are unable to offer,” he told the Louisville newspaper. “And the brand name (of a university center) can be quite powerful.”
Catholic Health Initiatives is a nonprofit health organization based in Denver. The faith-based system operates in 19 states and includes 73 hospitals and 40 long-term care, assisted- and residential-living facilities.
Jewish Hospital and St. Mary’s HealthCare is a regional health network that includes more than 70 health care facilities and more than 1,400 patient beds in Kentucky and southern Indiana. The Saint Joseph Health System includes eight health care facilities and slightly more than 1,000 licensed beds.
Ramsey said the proposed network would resolve UofL’s medical space limitations.
“We don’t have enough capacity to do the things that we need to do right now at the University of Louisville Hospital, in that building,” Ramsey said.
UofL medical school Dean Edward Halperin endorsed the proposed merger, expressing confidence that such a move would foster a climate of “academic freedom.”
Halperin also said that medical school staff had also looked into the issue of reproductive health care and whether it would be affected by the partnership.
He said that respecting the “clinical and ethical directives of the Roman Catholic Church” while at the same time providing women’s health services would be “imminently achievable.”
Details of UofL’s prospective health care merger emerged the same week that officials from Kentucky’s largest hospital system and largest university said they are forming their own health care alliance.
The alliance between Norton Healthcare and the University of Kentucky would help them provide more competitive services and top-level care to Kentuckians, officials from Norton and UK said this week.
