Norton Healthcare, University of Louisville Trade Barbs Over Kosair Children’s Hospital Plan

Updated: Norton Healthcare officials have responded to allegations that they’re breaching a land-lease agreement by partnering with UK Healthcare.

Last week, Norton and UK officials announced the intent to jointly run Kosair Children’s Hospital in Louisville to improve pediatric care in the state. The University of Louisville is also a partner there and U of L officials say they’ve been trying to create a long-term agreement with Norton for the past several years.

Click here to read yesterday’s coverage.

A Norton spokesman confirmed today that the land Kosair Children’s Hospital sits on is owned by the state and the hospital is owned by the company. What complicates this further is that the land-lease agreement allows Norton to develop the hospital and its operations if it’s beneficial to U of L and the citizens of the Commonwealth of Kentucky.

The hospital is currently used to help train doctors and U of L claims its spent upwards of $24 million on expanding operations under the assumption Norton would reimburse some or all of the costs when an agreement was reached. Norton says it’s met all of its formal obligations.

Norton officials released this statement to WFPL.

We are greatly disappointed by U of L’s attempt to evict us from a hospital we own just because we plan to collaborate with the state’s only other children’s hospital to improve care for Kentucky’s 1.1 million kids.

Norton Healthcare has been a trusted steward of children’s hospital care in Louisville since 1892, has invested more than $500 million in Kosair Children’s Hospital, and has met every single financial/contractual obligation to U of L.

We would be saddened to learn that all of this is a ploy by U of L to transfer Louisville’s children’s hospital to Denver, Colorado-based Catholic Health Initiatives, as they did University Hospital last year.

U of L officials say the partnership with CHI is unrelated and they sent a letter to Norton officials saying they have 30 days to correct the issue before they proceed with trying to evict Norton.

Attorney General Jack Conway is investigating the matter and expects to release a statement soon. 

Update: 5 p.m. More Response

Norton Healthcare has expanded on its response:

• This announcement regarding the state’s two children’s hospitals agreeing to work together is about improving children’s care in Kentucky.

• We have only signed a letter of intent, which means we are at the beginning of a process to have discussions to discover ways of working together. There are no signed agreements or contracts at this point, and we are entering a stage of collaborative discussion with multiple potential participants.

• We have and will continue to meet all of our contractual obligations to the U of L School of Pediatric Medicine, and continue to honor our affiliation agreement currently in place just as we have for decades.

• It appears U of L wants to evict us from the children’s hospital we built and own, then give control to CHI, a Denver, Colorado-based health care system.

• Based on the immediate and explosive reaction from U of L to the two children’s hospitals agreeing only to discuss methods of collaboration, one has to wonder if our announcement interrupted an immediate or long term strategy between U of L and CHI.

Update 5:28 p.m.: And UofL Responds Back

It has never been the UofL’s intention to switch partners in pediatric care. To the contrary, we think Norton’s cloak of secrecy portends their intention to change partners at the Children’s Hospital. Mr. Williams’ contention that this is all about getting people to work together ignores the fact that UK and UofL have been working successfully together for years without a financially interested middle man.

This accusation and Norton’s secretive actions are a blatant attempt to create a virtual monopoly for themselves in high-end, lucrative neonatal care. This end run will bankrupt the UofL Department of Pediatrics and threaten the viability of the entire UofL School of Medicine.

I have reached out to the CEO of Norton Healthcare to schedule a meeting, but he spent his time holding a press conference instead of sitting down with me. We do not wish to “evict” Norton and have never made any statements to that effect.

Because UofL pediatricians and nurses are all about caring for sick kids we have committed to continue to provide uninterrupted care at Kosair Children’s Hospital despite Norton’s failure to pay.

We thought we had the framework of an agreement to continue with Norton nearly a year ago. Unfortunately, every time we receive new contractual language from Norton Healthcare, it does not, in any way, reflect the agreed upon terms. It is my fervent hope that Steve Williams and I can sit down and resolve this so we can properly direct our energies to providing the best quality health care to the 1.1 million children of Kentucky and beyond.

We remain baffled ourselves as to why Norton would make an announce that they admit was negotiated in secret, isn’t final, and hasn’t even been analyzed for its financial impact. These are terrible business practices and send an awful signal to Norton’s current partners.

Devin Katayama

Devin Katayama host middays for WFPL and reports on education and other Louisville issues.

@DevinWFPL

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