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KentuckyOne CEO Ruth Brinkley

Sources are telling Insider Louisville that KentuckyOne Health’s first round of budget cuts will close some children’s units at Our Lady of Peace. The staff cuts likely will have an impact on about 20 children and/or young adults with mental/behavioral health problems.

At the same time KentuckyOne officials are beginning layoffs, sources say they’re also making clear to current employees they’ll lose their jobs – and possibly be prosecuted – for leaking proprietary information.

*Sources are hesitant to divulge information, saying system officials might connect details back to them. However, IL has verified Youth Intensive Services and Youth Exceptional Services for Adolescents with Serious Aggression could be affected.

Those sources say the closure of two units at OLOP was revealed to state officials in Frankfort at yesterday’s meeting of the Subcommittee on Human Resources, and that KentuckyOne executives are reaching out to other healthcare systems to take their patients.

The services, referred to in medical shorthand as “adolescent forensic programs,” are designed to provide acute psychiatric care and/or substance abuse treatment for adolescents who are aggressive, or who have criminal charges pending, according to the OLOP website.

From the website:

A sexual offender tract is offered for teenagers with perpetration issues who have not been convicted of a sexual offense. For all patients, the multidisciplinary team coordinates treatment with the patient, family/guardian, Dept of Juvenile Justice as appropriate, and other community based services and involved organizations.

According to an internal letter dated Monday, people losing their jobs will be forced to leave immediately:

Some people may ask why some employees whose positions have been eliminated are leaving their jobs immediately. The decision on timing was based on the desire to minimize any disruption to patient care and daily operations, not out of disrespect to the employee.

We asked KentuckyOne spokeswoman Barbara Mackovic for comment, but received no response.

Louisville-based Uspiritus, which has adolescent mental health programs, is working with Our Lady of Peace executives “to stay focused” on providing services for the children affected, said Uspiritus CEO Mary-Kate O’Leary.

The nonprofit community will “do what it takes to help the children being served at OLOP so their treatment will not be disrupted,” O’Leary said. “Uspiritus is willing to explore options to help.”

Uspiritus – which has a Bellewood campus and a Brooklawn Campus – has residential programs with 72 beds and might be able to take at-risk kids, she said.

“We’re looking at the population of kids they have and working with them to see if there is a match,” O’Leary said.

On Monday, KentuckyOne executives announced the beginning of layoffs on its employee website. A statement posted on that website indicates system-wide workforce reductions will be completed this month. It also states KentuckyOne will provide severance based on length of service along with career counseling and referral services.

However, to get that severance pay, employees must sign nondisclosure agreements as KentuckyOne tries to deal with a steady stream of internal leaks.

New requirements indicate that if an employee resigns or is terminated, CHI has the right to “de-provision” his or her personal mobile devices and wipe them clean of all data. (Below you can see excerpts from the form departing employees are required to fill out.)

At the same time KentuckyOne is cutting staff, the hospital system – controlled by Denver-based Catholic Health Initiatives – is hiring a vice president of finance to oversee Jewish Hospital/University of Louisville Hospital operations.

From the job description:

The Vice President (VP) supports the university hospital executives by providing effective financial leadership, support, and advice related to operations’ financial performance and improvement opportunities. The VP serves as a business and strategic partner to hospitals’ leaders, and will be active in the capital and operating budget development process. Further, the VP is expected to establish effective working relationships with other financial and operational leaders of KentuckyOne health and the health science center and university communities.

Last month, Dr. Peter Hasselbacher, president of the Kentucky Health Policy Institute, broke the story that KentuckyOne CEO Ruth Brinkley was revealing the depth of the system’s financial issues.

IL reported last August how parent CHI is dealing with mounting losses due in large part to its Kentucky operations, including a joint operating agreement with the University of Louisville.

In a private video, Brinkley said employees “must improve our performance by $218 million before the end fiscal year 2015,” adding that workforce cuts were inevitable.

Of course, workforce cuts would have to be substantial. For example, if KentuckyOne executives cut 500 employees out of about 15,000 total – using $75,000 as the average salary with benefits – that would save the system only $37.5 million.

One source explains that estimating a $2 billion “spend” for the KentuckyOne system, KentuckyOne executives would have to achieve a 24-plus-percent reduction in cost to hit the $218 million in 15 months.

From the source:

“That has never been done, anywhere … most of these efforts are in the 2-percent-to-5-percent range. Norton, for example, is trying to reduce costs by $100 million over three years … its spend is about $1.6 billion annually.”

According to sources, KentuckyOne executives are increasingly telling employees that leaks of confidential and proprietary information will not be tolerated, which seems to be confirmed in this document leaked to Insider Louisville.

That includes wiping clean all data from personal wireless devices as the employee exits.

For those on the way out, here are sample “questions” from the 10-page “Employee Acknowledgement and Certification of Signature for Confidentiality and Acceptable Use of CHI IT Assets Agreements.”

Examination Summary

• This examination contains 30 question(s) .

• You must answer 100% correctly or 30 out of 30 question(s) in order to pass this examination.

• Please answer all questions below, then click the SUBMIT button at the bottom of the page to have your examination scored.

• This assessment is not timed.

• Question 4 of 30
I will not share confidential information with anyone who is not authorized by CHI to have access to it. If my responsibilities include disclosing confidential information with outside parties such as healthcare providers, contractors, consultants, or insurance companies, I will follow CHI policies and procedures for these types of disclosures.
Answers
-I agree.
-I do not agree.

Question 9 of 30
I understand that my obligation to maintain the confidentiality of CHI’s confidential information extends beyond termination of my employment or association with CHI, and I agree that I will not disclose or use CHI confidential information for any purpose after my employment or association ends.

Question 19 of 30
I am responsible for securely protecting any mobile device(s) I use to access CHI
Exchange/Outlook (email, calendars and contacts) or other CHI systems or applications and the information stored on such a mobile device in accordance with ITS Security Standard ITS13-SB Mobile Device Security.
I am responsible for complying with the Mobile Device Security Standard as it applies to my use of a mobile device to access CHI information. If I have any questions about my use of a mobile device to access CHI Systems and application, I am to ask my supervisor and/or IT Service Desk for assistance

Question 23 of 30
Upon my resignation or termination of my employment or association with CHI, I grant CHI permission to de-provision my personal mobile device; or if the mobile device is owned by CHI, I will return it. I acknowledge that de-provisioning will remove and wipe all CHI Information and that my personal information that is maintained on the mobile device may be deleted, including my personal photographs, calendar, and address book.

Question 25 of 30
I understand that CHI:
• issues user identification and secure passwords to access confidential information that is maintained electronically;
• regularly monitors access and use of CHI confidential information to determine my compliance with CHI policies and procedures and the terms of this Agreement;
• and will monitor my access, use, and transmission of information on CHI IT Assets.

Question 26 of 30
I understand that I do not have, and should not expect any personal privacy rights when using CHI IT Assets.

Question 27 of 30
I understand and agree to abide by the obligations of this Confidentiality and Acceptable Use Agreement and associated CHI policies and procedures related to privacy, information security, information technology and confidentiality. I understand that CHI may take disciplinary action if I do not abide by the CHI policies and procedures, including up to termination of my employment, contract, or association with CHI.

Question 28 of 30
I understand that CHI is entitled to take legal action against me, including obtaining money damages, if I do not follow this Agreement and CHI’s confidential information is used or disclosed inappropriately.

Here is the backstory on KentuckyOne:

KentuckyOne was created in January 2012 out of the merger of the Kentucky operations of CHI’s Lexington-based subsidiary, U of L hospital and Jewish Hospital & St. Mary’s HealthCare.

KentuckyOne is Kentucky’s largest health system with about 15,000 employees at 30 facilities, including hospitals in Louisville, Bardstown, Lexington, Berea and London. The system has about 3,100 licensed beds, according to the KentuckyOne website.

CHI agreed to a joint-operating agreement with JHSMH and University Medical Center in which CHI would inject $173 million over five years, as well as loaning University $40 million to pay down debt.

So far, CHI has approved payment about $14 million to U of L.

*Editor’s note: Insider Louisville editorial policy is to double-verify sensitive information from sources who could be terminated or retaliated against for going on the record by name. We keep confidential the identities of sources who risk losing their jobs in order to help us document story details.

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Terry Boyd
Terry Boyd has seven years experience as a business/finance journalist, and eight years a military reporter with European Stars and Stripes. As a banking and finance reporter at Business First, Boyd dealt directly with the most influential executives and financiers in Louisville.

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