KentuckyOne to end operating agreement with University of Louisville Hospital

Screenshot from KentuckyOne Health website.

Screenshot from KentuckyOne Health website.

KentuckyOne Health and the University of Louisville announced Tuesday that the two parties will end a joint operating agreement signed in 2012, and by the middle of next year KentuckyOne will no longer manage UofL Hospital and the James Graham Brown Cancer Center.

Following a state investigation this summer showing that staffing shortages at UofL Hospital were compromising patient safety and care, KentuckyOne and UofL traded barbs in the press in October, as the university demanded more than $46 million in back payments from KentuckyOne Health. The company countered with a lengthy response questioning UofL’s commitment to their joint operating agreement and the university’s transparency regarding how much of KentuckyOne’s $524 million in financial contributions have been invested.

The two sides began a dispute resolution process that month, with UofL’s acting executive vice president of health affairs Greg Postel leaving open the possibility of severing their relationship.

While an academic affiliation agreement between KentuckyOne and UofL will stay in place for physicians and services at Jewish Hospital — which the company also operates — the joint operating agreement for UofL Hospital and the James Graham Brown Cancer Center is tentatively scheduled to end on July 1, 2017. At that time, University Medical Center will take over the operation and management of both facilities.

In a joint press release by the university and KentuckyOne announcing the move, they said the decision “was agreed upon by all parties as the most effective way to collaborate in care for the community, moving direct operations of the academic medical center to UMC and ensuring continuation of innovative and high-quality patient care and clinical training via KentuckyOne Health facilities.”

In addition to UMC taking over management next year, the joint press release also listed three points of dispute that were resolved between the two parties:

  • Working together, KentuckyOne and UofL “will continue to implement projects involving up to $44.8 million in capital investments at ULH by July 1, 2017.”
  • KentuckyOne Health agrees to complete the funding of the joint investment proposals under their academic affiliation agreement.
  • UofL will release its rights to three seats on the KentuckyOne board of directors.

“The dynamic nature of the health care landscape requires organizations to explore innovative approaches and relationships for the delivery of care,” stated UofL’s Postel in the press release. “Today, we are presented with a very different environment than when we signed the joint operating agreement and revised the academic affiliation agreement in 2012. We are pleased with our shared accomplishments yet understand that changes were necessary to address ongoing challenges and ensure we are able to respond nimbly to the unique needs of our care facilities, particularly the academic medical center.”

Ruth W. Brinkley, president and CEO of KentuckyOne, stated in the same press release: “We are pleased to move into the next phase of our relationship with University of Louisville. Our longstanding partnership at Jewish Hospital dates back several decades prior to KentuckyOne Health. Since the formation of KentuckyOne Health, we have partnered in many areas and will continue to do so for many years to come, including working together on our innovations to meet the health needs of our community. During the past four years of our partnership, we have implemented significant improvements to enhance the health of our patients and the communities we serve. This includes the installation of an electronic health record system, and many other updates and enhancements to the University of Louisville Hospital.”

This story will be updated.