The city of Cincinnati continues to challenge last year's privatization of University Hospital, disputing that the hospital's charitable mission is being preserved under a not-for-profit health system.
A ruling is expected this spring on two legal challenges raised by the city. The 17-month dispute returned to court this month after settlement talks broke down with Health Alliance of Greater Cincinnati, which now controls the hospital.
The city maintains that the University of Cincinnati board of trustees had no right to privatize the 650-bed teaching hospital, which was founded by the city and leased to the university years ago.
Health Alliance, which includes four other not-for-profit hospitals, assumed management of University Hospital in 1995. Privatization took effect Jan. 1, 1997.
Health Alliance officials said privatization has enabled the alliance to integrate University Hospital's operations, lowering costs and bringing the facility more managed-care business.
But city officials say the alliance could slash services or close the hospital altogether, as it did with neighboring Jewish Hospital last year. That could mean the loss of hundreds of inner-city jobs.
"The great fear is they'll take a 170-year old public institution that is part of the fabric of local society and dismantle it in whatever way they see fit," Assistant City Solicitor Richard Ganulin said, referring to Health Alliance.
Health Alliance spokeswoman Gail Myers said it is committed to keeping University Hospital in its system. "In our view, de-privatizing is not an option," she said.
She said Health Alliance is continuing the hospital's historic mission of service to the poor.
Last month the Cincinnati Enquirer cited confidential documents in which city officials said talks broke down earlier this year over the refusal of Health Alliance to make "best efforts" to serve the uninsured.
Other sticking points cited were the alliance refusing to ensure that the hospital would remain not-for-profit, and disagreement over terms for notifying the city about budget cuts or service changes affecting the poor.
Myers said Health Alliance offered to provide at University Hospital uncompensated care worth $16.5 million per year more than the $29 million currently provided by a Hamilton County, Ohio, tax levy.
"What (the city) wanted was a commitment to provide an unlimited amount. We couldn't do that without jeopardizing caring for the rest of our patients," Myers said.
Hamilton County Court Judge Thomas Crush is considering the city's contentions that university trustees usurped the state Legislature by transferring public assets to private control and that the city never gave up complete control of the hospital to the university.
If he finds for the city, the judge could take steps to restore control of the hospital to the university. Otherwise, the city could move forward with other legal claims.
Among those, Ganulin said, are potential conflicts of interest by board members and executives who hold positions with both the university and Health Alliance.
Ganulin said there also are "questions about how the Heath Alliance is spending that money" from the county tax levy for indigent care. "At this point allegations have been made to us, and we're trying to verify them; but without (legal) discovery it's difficult," he said.
In a separate case, the Ohio Supreme Court ruled in February that the State Employment Relations Board was wrong in refusing to hear complaints of unfair labor practices raised by hospital employees. The court ruled that the decision to privatize was motivated in part by the university's intent to reduce the bargaining strength of the hospital's unions and get out of state mandates regarding public employees.
Ganulin said the ruling bodes well for the city's case. "When the university divested, it divested not just hospital assets; it divested all public accountability for the hospital, and therein lies the rub," he said.
Myers said returning the hospital to public ownership would be a major undertaking. "There are a number of departments that have consolidated" between University Hospital and other alliance facilities, she said.
