The University of Louisville is buying Jewish Hospital and other affiliated Louisville KentuckyOne health providers. But there are still a lot of unknowns in how this plan will work, and how it could change the state’s relationship with the Louisville research and health care institution.
There are a few things we know: the Bevin administration — with the legislature’s approval and buy-in — will loan U of L $50 million to complete the sale (and the loan is partially forgivable). We know Catholic Health Initiatives — Jewish Hospital’s parent company — will forgive about $19.7 million of what University Hospital owes CHI. CHI and KentuckyOne also won’t be able to open any competing facilities for five years after the deal closes. And the deal is contingent on U of L maintaining Kentucky-based jobs and providing care to west Louisville residents.
But here are some things we don’t know that will likely become clearer in coming months:
How Will U of L Turn Jewish Around?
For many years Jewish Hospital wasn’t doing well financially, and its medical safety and quality scores had gone down as measured by both the federal government and the state. What will the University of Louisville do differently to change that course?
At the news conference announcing the deal Wednesday, U of L President Neeli Bendapudi said people should look to University Hospital for those answers. In recent years, the University Hospital’s quality scores have improved from a somewhat rocky past, as has its financial stability.
“If you look at what we have done in just about a year at our hospital … I’ve always believed that what you need to do is take care of the patients, take care of the people who are taking care of the patients, and the rest will follow,” Bendapudi said. “The very fact that we are a fully-staffed hospital with nurses — when everybody has nursing shortages — that we actually have recruited and we keep them, that our quality scores, the improvement over the past year, it’s dramatic.”
And indeed, some of University Hospital’s quality and safety scores have gone up since the hospital submitted more recent data June 30. In May, the Courier Journal reported the hospital had earned a ‘D’ from quality measurement nonprofit The Leapfrog Group. A review of the most recent metrics showed University Hospital had improved in the rate of infections among patients and some other measures.
Bendapudi also said that as a nonprofit and public institution, U of L won’t need as high of a rate of return from Jewish Hospital as a for-profit entity would.
“This will not happen overnight — [a turnaround] won’t happen in year one, but it will happen,” Bendapudi said. “Even looking out [at] year three or four, [analysts] felt that the returns would not be what a publicly-held company or a for-profit company would need.”
Will The Kentucky General Assembly Go Along?
To finance the deal, the Bevin administration has said it will give U of L $50 million in a partially-forgivable loan. But the legislature will have to vote to appropriate that money. Republican House Speaker David Osborne said he will pre-file a bill for the funding, and Bendapudi also said Kentucky Senate President Robert Stivers is supportive of the loan.
But will everyone be on board? Conversations with some key Republicans suggest there may be some disagreement.
Senate Budget Chair Chris McDaniel, a Republican from Latonia, expressed reservations the day before the deal was announced; he said there must be a better private sector solution.
“And that’s the big difference here. If the University of Louisville makes a mistake, it comes to taxpayers and tuition-paying students to fix it,” McDaniel said on Tuesday.
Sen. Stephen Meredith, a Republican from Leitchfield and vice chair of the Senate’s Health and Welfare Committee, said he was skeptical that Jewish Hospital’s nearly 3,000 annual emergency room visits couldn’t be absorbed by the existing University Hospital, Baptist Health or Norton Health.
But his main concern Tuesday was that Jewish Hospital’s financial troubles aren’t new — and he worried about the money it would take to bring Jewish Hospital back into good financial standing.
“Unless we understand what those issues are and can address them, I’m not sure why we’re trying to sell them a sinking ship,” Meredith said.
Representative Jerry Miller, chair of the State Government Committee, said he is concerned about ongoing operating losses by Jewish Hospital.
“Do they have a plan to staunch those losses in time to not experience the same problems that KentuckyOne ran into?” Miller asked.
Miller said perhaps a different business model at Jewish could work, or changing the focus of the hospital.
Budget Chair McDaniel Tuesday also said it was, “foolhardy for an executive branch agency to make commitments on behalf of the legislature.”
All of these lawmakers are Republicans, which could mean it will be hard for Republican leadership to wrangle the votes from their own party members.
The deal is expected to be finalized Nov. 1. But the legislature doesn’t return for its regular legislative session — when it could vote on this appropriation — until January.
Will This Deal Affect The Bevin Administration’s Position On Medicaid?
Under the Affordable Care Act, Kentucky expanded the Medicaid program — health care for people with lower incomes and disabilities — to include people making up to 138 percent of the federal poverty limit. That was a win for hospitals like University Hospital and Jewish Hospital that serve a lot of low-income patients; more of the hospitals’ patients gained insurance and the hospitals no longer had such high charity care rates.
There are estimates the changes to Medicaid, which have been held up in court, would cause between 86,000 and 136,000 Kentuckians to lose Medicaid. That’s because of new requirements the Bevin administration wants to put into place, including work and volunteer requirements and payments to keep coverage.
If that many people do lose their Medicaid insurance, it could be because they gain jobs and have new employer-sponsored coverage. Or it could be because they couldn’t meet the requirements. In the latter scenario, hospitals would see more uninsured patients.
Jewish Hospital had 21,307 outpatient visits in 2017 by patients insured by Medicaid, which comprised a little under a third of overall outpatient visits, according to the hospital’s Community Needs Assessment. So people losing Medicaid could negatively affect Jewish — and University Hospital’s — bottom line.
Meanwhile, the Bevin administration has vouched for this deal to buy Jewish and now has a stake in the hospital system’s future. It’s something to watch as Bevin’s changes move through the courts — Bevin has previously said he would roll back the entire state Medicaid expansion program if a court doesn’t rule his changes are legal.