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3 Possible Factors Behind Sell-Off Of KentuckyOne Facilities

Courtesy KentuckyOne Health

It’s been five years since Catholic Health Initiatives tried to bring together high-performing hospitals in Lexington and less successful hospitals in Louisville. And now, the Louisville hospitals are being sold: Jewish Shelbyville, Jewish, Sts. Mary’s and Elizabeth and the Frazier Rehab Institute.

The move was announced Friday and KentuckyOne CEO Ruth Brinkley said in a news release that the decision to sell the facilities was "made with great care and consideration."
“New owners and operators of the facilities outside of our central and eastern community focus will have the resources and ability to continue to deliver care, support employees and physicians and engage the community.”
Here are 3 likely reasons behind the sale:

  1. The patients. While the University of Louisville hospital has the biggest portion of Louisville’s Medicaid recipients and uninsured, Jewish and St. Mary’s are close behind. A big part of that is because of location. West and South Louisville are home to more low-income people, and there are big health care disparities that run down the middle of Louisville.

Ann Hagan-Grigsby from the Park DuValle Community Health Center said 30 percent of their patients are uninsured. And most patients go to one of these hospitals when they’re sick.  And it’s often only when they are very sick that they go.

“Until then, I’m not going to worry about it because I’m worried about food, shelter, clothing and other societal issues," Hagan-Grigsby said. "Health care is not the top one on your list. It’s just not.”

And patients who have all those other stressors might forgo preventive care and go straight to the ER when problems arise.

  1. Compared to other hospitals in Louisville and the others KentuckyOne are not selling, these facilities rank low with Medicare, meaning that they’re not paid as much as the higher-ranking hospitals.

Medicare gives hospital star ratings based on a lot of factors. And bad ratings mean that facilities are not paid as much as the higher-ranking hospitals. For example, one such ranking is the percentage of patients who receive an appropriate recommendation for follow-up colonoscopy. The higher the number of people, the better. Colonoscopies can detect cancer, ulcers and other diseases.

A third of patients at Jewish Hospital Shelbyville got a recommendation. Three quarters did at Jewish and St. Mary’s Hospital. That compares to one of KentuckyOne’s successful hospitals in Bardstown, where almost 90 percent of people got that recommendation.

In some cases, a low quality score could mean the patient population is just harder to manage. Hagan-Grigsby with Park DuValle Community Health Center says she doesn’t think this kind of sale would have happened East of that health care divide down Louisville.

“If you have a patient population that’s primarily insured, and tends to be very compliant in terms of accessing care, then your challenges are different,” she said.

  1. KentuckyOne is likely trying to make itself a better buy. Catholic Health Initiatives started KentuckyOne back in 2012 to form a regional health care powerhouse, and did so as well in many other states. In 2015, there were 108 hospitals in 18 states. But last year, they went down to 102 hospitals and also reported $500 million in operating losses. Part of those losses came from decreasing payment rates and the Medicare penalties.

Now CHI is in talks with California-based Dignity Health to merge the companies.

What’s next? KentuckyOne is looking for a buyer of these hospitals. Michael Imburgia runs a specialty heart clinic downtown. Many of his patients use Jewish and the Frazier Rehab Center for care. His main concern is that they stay open.

“My bigger fear, they do take care of a lot of indigent patients, and they don’t just take care of people in Louisville, it’s throughout the state,” Imburgia said.

Lisa Gillespie is WFPL's Health and Innovation Reporter.

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