The University of Louisville Hospital and KentuckyOne Health are terminating a troubled joint operating agreement that has seen KentuckyOne manage the academic medical center and the accompanying James Graham Brown Cancer Center for the past four years.
The JOA is scheduled to dissolve on July 1, at which time management of the hospital and the cancer center will revert back to the University Medical Center, said hospital spokesman Gary Mans.
In October, the University of Louisville accused KentuckyOne in a letter of breaching its commitments by failing to make about $17 million in promised program improvements and falling $29 million behind in making capital improvements to the facilities.
The letter resulted in the partners agreeing to part ways on hospital management. The parties will continue a teaching affiliation, however, with new provisions.
KentuckyOne and the University of Louisville Hospital first tried to merge in 2012 when KentuckyOne was created through a merger between Jewish Hospital & St. Mary's HealthCare in Louisville and St. Joseph Hospital in Lexington, Ky.
But the state decided to keep the assets of the university health system separate from KentuckyOne. The JOA allowed the systems greater clinical and operational integration.
The University of Louisville Hospital is searching for a permanent replacement for interim president Chuck Neumann, who is an employee of the Catholic health system that owns KentuckyOne, Catholic Health Initiatives in Englewood, Colo.
KentuckyOne is struggling in its own right. It is one of CHI's money-losing markets, along with Houston and a handful of others.
CHI, which has 102 hospitals, recently reported a near $500 million operating loss as it continues merger talks with Dignity Health of Oakland, Calif.
This summer, KentuckyOne replaced three key executives as it tries to achieve synergies and integration between the disparate hospital systems that comprise the group.