Ramsey: UofL, health giant alliance has challenges

The Associated PressJuly 12, 2014 

— University of Louisville President James Ramsey acknowledges that the school's 16-month-old alliance with the financially struggling hospital giant KentuckyOne Health "has had its challenges," but said he still expects the partnership to fulfill expectations.

"We knew when we entered the partnership, (getting money promised to UofL) would be slow and the partnership would have its ups and downs," Ramsey told The Courier-Journal (http://cjky.it/1y860qD) in a recent interview. "And it has been slow and has had its challenges."

The partnership was finalized early last year after a controversial failed merger attempt. The partnership calls for KentuckyOne to invest $135 million in UofL over three to five years to support public health, nursing and other areas. So far, $44 million has been paid.

Ramsey said the company has met its contractual obligations, but he would have preferred having more money up front. That way, he said, it could be invested in programs more quickly or programs could be launched with the knowledge that the money is there.

"They looked at these as expenditures," Ramsey said. "We looked at them as investments."

UofL's president added that he continues to believe the partnership "will meet our expectations."

Ramsey's comments come as KentuckyOne works to close a $218 million deficit in a rapidly changing health care environment.

KentuckyOne was formed in 2012 by the merger of Jewish Hospital & St. Mary's HealthCare and St. Joseph Health System of Lexington. The companies united after Gov. Steve Beshear rejected a proposed merger that would have included UofL Hospital, citing church-and-state issues and the loss of a public asset.

In February, the company laid off about 500 workers and leaders said other large cost-cutting moves are possible. Chief Executive Officer Ruth Brinkley said the company has eliminated more than half of its deficit and is on track to close the gap completely by June 2015.

She also noted that the $44 million it's paid to UofL is only part of $200 million given to the university in the first 15 months of the partnership, about 30 percent of the agreed-up five-year investment, which is also targeted toward areas such as academics, research and infrastructure.

"Has everything gone exactly the way we would've wanted it? No ... But overall, we are pleased with how it's gone," Brinkley said, acknowledging that she understands Ramsey's viewpoint. "Academic health sciences centers are different from community hospitals," focusing on research and education in addition to patient care. "Given their mission, it's predictable that there would be some bumps in the road."

Beverly Glascock, a Louisville lawyer and former nurse who has closely watched the partnership unfold, said the university should have discussed exact timing of payments before finalizing the agreement with KentuckyOne.

"This is a total failure by the university. They went to such lengths to keep the public in the dark about the details of this plan, and now it turns out they were as much in the dark as the public," she said. "The university was too eager to believe KentuckyOne's promises of big money. The promises were empty and, given KentuckyOne's mounting losses, the promises are likely never to be fulfilled."

But Dr. David Dunn, UofL's executive vice president for health affairs, dismissed such criticism and said UofL and KentuckyOne talk regularly about the pace of investments.

"KentuckyOne has made good on all its commitments," he said. Compared with when the partnership began, "I'm more optimistic because I've got a lot of money in the bank."

Information from: The Courier-Journal, http://www.courier-journal.com

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