Sources: U of L back in hospital negotiations with KentuckyOne Health, Catholic Health Initiatives’ Kentucky subsidiary

Now what?

When you run months late on a high-profile deal, people in the medical community begin talking about what’s going on … and they talk to us.

Those sources say University of Louisville officials are back at the negotiating table with executives from Catholic Health Initiatives in a second run at hammering out a partnership that can pass muster with state officials.

CHI’s Kentucky operations, KentuckyOne Health, is one of two health care systems responding to a U of L request for proposal, according to multiple sources, a search for a partner hospital system issued back in February.

Sources with direct knowledge of the negotiations tell Insider Louisville KentuckyOne’s offer is more generous than a second, believed to be from either Norton Healthcare or the Baptist Health Care System.

“The KentuckyOne deal is by far the better offer,” said one, declining to give details.

Dr. Gregory Postal, chairman of University of Louisville Physicians Inc., is leading the U of L effort. Postal and other U of L medical executives including Dr. David Dunn recently briefed the chairmen of various university departments about where the negotiations stand, with the caveat the briefing was to be considered confidential, according to multiple sources.

Barbara Mackovic, KentuckyOne spokeswoman, sent us this:

State procurement rules require procurement processes to be confidential until the process is finished. KentuckyOne Health intends to comply with the rules that restrict public comment on any state RFP until the procurement process is complete and public comments are permitted. 

Gary Mans, director, Health Sciences Center communications and marketing, reaffirmed U of L executives will make a decision on the RFP “on or before September 28.”

U of L issued the RFP in February, with a cutoff date of March 23, a date extended twice to September 28.

Multiple sources have confirmed KentuckyOne executives have had – and are having – conversations with community leaders and opinion shapers, conversations many believe are a prelude to the announcement of a second, modified KentuckyOne partnership proposal with U of L.

The discussions come seven months after Kentucky Gov. Steve Beshear stopped a proposed merger of University Hospital, Denver-based CHI and what was then Jewish Hospital & St. Mary’s HealthCare. JHSMH now is part of CHI-controlled KentuckyOne, which was created in early January, days after the failed merger with U of L.

Beshear vetoed the merger last December 31 citing “constitutional and public policy questions about the influence of a religious entity on a publicly owned institution, especially regarding reproductive issues.”

In the merger, CHI would have invested an initial $200 million in what was termed the “Academic Health Center,” the giant downtown complex that includes University Hospital,  Jewish Hospital, Brown Cancer Center and Frazier Rehab Institute, and a total of $800 million over a number of years. This merger would have taken pressure off U of L, Louisville and the State of Kentucky, which must cover projected indigent care budget shortfalls at University Hospital.

However, Catholic officials would have had final word under the church’s Ethical and Religious Directives as to what procedures would be banned at the publicly funded University Hospital, including abortions and birth control procedures such as tubal ligations.

When Beshear killed the merger, a spokesman for St. Joseph Healthcare – CHI’s Lexington-based system, absorbed into KentuckyOne – made it clear CHI officials would continue pursuing a deal:

Each of the partners remains committed to working together to further the joint vision that has guided us over the last several months. We firmly believe that a strong alignment between our organizations will have positive benefits for the communities we serve and the health care of Kentuckians across the state. We will continue to work with the Governor’s office and other government officials to address the inaccuracies and noted concerns in the report. We look forward to delivering a transaction in a form that the Governor would feel compelled to approve.

Opponents of the original merger are skeptical any new deal will be significantly different. Those opponents have charged officials at U of L, a publicly funded university, negotiated the first merger proposal in complete secrecy, never making public crucial deal details.

• Norton and U of L’s Department of Pediatrics have been advertising for a pediatric cardiologist with experience in patient management.

• Norton Healthcare and the Hiram C. Polk Jr., M.D., Department of Surgery at U of L’s School of Medicine just signed a three-year academic affiliation regarding research and teaching, according to Dr. Peter Hasselbacher, president of the Kentucky Health Policy Institute. The agreement includes general surgery; surgical oncology; plastic surgery; ear, nose and throat surgery; colorectal surgery; a pancreas program; and vascular surgery at Norton Hospital.

Several Norton executives told Insider Louisville the system has stated publicly it has not responded to the U of L RFP. Baptist East executives have declined to comment.