The University of Louisville has begun a process of moving cardiology, organ transplantation, neurosurgery and other services out of Jewish Hospital, in a further sign that the end of the venerable facility may be nearing.
“Given the current uncertainty around Jewish Hospital, we have begun a process of transitioning service lines to University of Louisville Hospital and elsewhere,” UofL President Neeli Bendapudi said this week.
The statement, which she made as she announced the stepping away of former UofL President Dr. Greg Postel, confirmed what sources have told Insider for weeks: that the deal to save Jewish Hospital is in trouble and that affected parties are preparing for the downtown hospital’s closure.
KentuckyOne Health, which owns the hospital, for months has been trying to sell the facility and others in Louisville, in part because they’ve been hemorrhaging cash. Jewish Hospital and St. Mary’s Healthcare together this year have been incurring operating losses of more than $1 million a week.
Since December, KentuckyOne, a nonprofit health system has been in exclusive negotiations with BlueMountain Capital Management, an alternative asset management firm based in New York.
Both KentuckyOne and a spokesman for BlueMountain Capital told Insider Thursday that negotiations were continuing but declined to answer questions about the impact of the university’s actions.
Dr. Peter Hasselbacher, emeritus professor of medicine at the University of Louisville, said for Jewish Hospital, losing the university’s six clinical programs, would be an enormous blow.
“The next question to ask is, ‘What’s left?’ ” he told Insider on Thursday.
Without those programs, Hasselbacher said he could not foresee how Jewish could continue as a general purpose hospital. “We have a once honored hospital disintegrating before our eyes,” he said.
University spokesman Gary Mans told Insider via email Thursday that university officials for “several months (have been) developing contingency plans to move the six UofL clinical programs that are housed at Jewish Hospital.”
Those programs include cardiology, cardiovascular and thoracic surgery, motility/gastroenterology, neurosurgery, physical medicine and rehabilitation and solid organ transplants.
Mans declined to answer how many people work in those programs, how many programs and employees have moved already, what space they occupy at Jewish, whether the transition would involve moving equipment and what the impact of the transition would be on patients.
John Drees, interim senior associate vice president in the university’s Office of Communications and Marketing, said the institution was “in contingency planning only. Since nothing is concrete, we feel it’s too soon to talk specifics.”
While Bendapudi said the “process of transitioning service lines” had begun and that she was weighing options during “proposed moves” that were precipitated by uncertainty surrounding the hospital, Mans and Drees said the institution merely has been developing contingency plans “in light of the scheduled Dec. 31, 2018, ending of the Academic Affiliation Agreement” with KentuckyOne.
Drees said statements from Bendapudi and Mans “are consistent.” Bendapudi could not be reached Thursday.
While KentuckyOne officials, including CEO Chuck Neumann, who just announced his retirement at the end of the year, maintain that they have no plans to close the hospital, Hasselbacher said that to some extent, what happens to the facility is beyond KentuckyOne’s control.
And it’s difficult to imagine, Hasselbacher said, that BlueMountain would buy a struggling hospital — especially one that has been hollowed out further after losing the university’s clinical service lines — for a purpose other than liquidation.
Those dynamics, he said, are the same that are prompting the university to prepare for the facility’s closure. The hospital could close quickly, which would leave an unprepared university scrambling to find space for the six clinical service lines.
University leaders, Hasselbacher said, have to prepare for the hospital’s closure, because they can’t allow themselves to be at the mercy of the outcome of the prolonged negotiations for KentuckyOne’s Louisville assets.
Meanwhile, a source with knowledge of part of the transition told Insider that some of the parties expected the hospital’s end to arrive quickly.
“We’ve been working on contingency plans and have every expectation to be out of our offices before the new year,” said the source, who asked to remain anonymous to avoid repercussion from superiors. “Several specialty services have already cozied up to Norton and we figure that the shuttering will happen rather quickly and abruptly, which could be ugly.”
The source said it’s unclear whether financial support for some services will continue or for how long. “Finding alternative funding for some things could be difficult in the short-term.”
Local health care experts have said that the closing of Jewish Hospital, a downtown facility that employs thousands of highly skilled and paid health care professionals and takes care of tens of thousands of patients, would have far-reaching consequences for many parts of the Louisville community, though the extent of the impact would depend, in part, on the speed with which the 462-bed facility is closed.
Jewish Hospital for years has been losing money and until recently had been propped up financially by the profitable University Hospital, which KentuckyOne managed. However, the University Hospital’s management — and profit — have reverted to the University of Louisville, leaving Jewish in a more precarious financial situation and its owner with greater incentives to sell it.
The negotiations for KentuckyOne’s Louisville assets are coinciding with KentuckyOne parent Catholic Health Initiatives, based in Denver, moving closer to merging with San Francisco-based Dignity Health. The marriage recently got a thumb up from the Vatican.