Healthcare Business News

Ky. governor affirms stance against including university's hospital in merger

By Ashok Selvam
Posted: January 9, 2012 - 5:45 pm ET

Despite calling last week's talks with officials from the University of Louisville productive, Kentucky Gov. Steve Beshear said Monday that the sessions didn't produce ideas that satisfied the state's concerns about the proposed three-way merger.

University officials hoped their suggestions would help Beshear reverse his Dec. 30 decision disallowing the school's hospital to be part of the proposed $620 million deal. Instead, Beshear's office released a statement affirming his rejection that prevented the combining of 318-bed University of Louisville Hospital with two Catholic Health Initiatives affiliates to create a 15-hospital statewide network. The hospital said they needed an investor to continue operations, but Beshear on Monday cited University of Louisville Hospital's 2010 profits at $13 million as reason to again reject the deal: “University Hospital is clearly a facility with significant strengths.”

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CHI, based in Englewood, Colo., last week went forward with merger plans without the University of Louisville. CHI pledged $320 million toward merging the other two parties, Jewish Hospital & St. Mary's HealthCare in Louisville and St. Joseph Health System in Lexington, Ky. The money would pay for infrastructure improvements, including an electronic health-record system. The name of the new system is KentuckyOne Health, and the deal was retroactive to Jan. 1, as CHI already gained the needed approvals, having received them during the process it went through with the University of Louisville.

A KentuckyOne spokesman referred questions to University of Louisville Hospital officials, who didn't immediately respond to a request for comment. The KentuckyOne spokesman said CHI was not privy to any discussions between the governor and University of Louisville Hospital.

Kentucky Attorney General Jack Conway also opposed the merger, as he and the governor said the deal would cede too much control over University of Louisville Hospital to CHI. They said the hospital is valuable state asset. The hospital is the city's primary safety net, and both said they wanted to support the facility: “I believe Gov. Beshear made the appropriate decision to protect the commonwealth's interests, and I am committed to working with the University of Louisville to ensure the hospital's future as a leading healthcare innovator and treatment center,” Conway said in a statement.

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