Interim Joint Committee on

Health and WelfareAugust 17, 2011

THANK YOU

2

Jewish Hospital & St. Mary’s HealthCare

Saint Joseph Health System

UMC

Jewish Hospital HealthCare Services

Catholic Health Initiatives

University of Louisville

UOFL MILESTONES

1970 – State system – “another mouth”

1997 – Watershed event for UofL – HB1 –public agenda

• “Premier nationally recognized research university”• Build new economic clusters/replace lost

manufacturing jobs• Work to improve healthcare in Kentucky

This merger allows UofL to continue to achieve HB 1goals

3

University of Louisville has experienced 11 Budget cuts in 11 years

So, We (UofL) developed

Seven Strategies to Achieve our legislative mandate:

1. Continuing re-engineering of processes and expense management

2. Aggressively improving balance sheet management, with an emphasis on converting underperforming assets

3. Increasing contract research and commercialization income

4. Creating private sector partnerships

5. Enhanced fund raising

6. Being creative in expanding the research mission through innovative financing tools like the tax increment financing plan

7. Increasing clinical income to support education and research

STARK REALITY!

4

UofL School of Medicine Total Budget = $351 million

$28 million of total SOM budget is state appropriation

Generating clinical income is critical to supporting the teaching and research mission

of UofL

5

WHY IS CLINICAL INCOME IMPORTANT TO OUR TEACHING/RESEARCH MISSION

While this merger is critical to UofL achieving the legislative mandate you have

given us neither UofL nor the School of Medicine are merging!

6

7

Who is merging?

UMC (dba University Hospital/JGBCC)

UMC WITH JHSMH & SJHS

A Quick History

1970 – UofL joins state higher education system

– 1970 – UofL joins state higher education system

– 1970-1983 – Medical education programs at Louisville General

Hospital

– 1978 -- Construction of University Hospital begins

– 1983 – University Hospital opens, E0-83-102/Humana management

contract to operate University Hospital

– 1993 – Humana – Galen – Columbia – HCA

– 1995 – Mr. Scott announced move to Nashville

– 1996 – UMC created (Jewish/Norton/UL)

– Each member organization had veto authority over board

action

(e.g. January ‘07 – July ‘07)

– 2007 – Norton/Jewish withdraw from UMC control hospital

– 2008 – Community based board created to govern UMC

8

UMC

2008 – Strategic/financial 5 year plan • Conclusions• With large uninsured population (21%) UMC could

not continue to operate in the future as it was– Cut uninsured care; and/or – Cut clinical support to UofL SOM (which would

result in fewer services)

9

OPTIONS CONSIDERED BY UMC BOARD

• Go alone• Partnerships

– Private hospital chain (give up academic control)– Norton– Jewish

• Program areas (5)• Two way merger

– Saint Joseph/CHI (Jan. 2010)• 73 hospitals/19 states• States with healthcare problems• Commitment to Kentucky

10

We are the premier, integrated comprehensive health system in the Commonwealth known for efficiently providing the highest quality care and service close to home; reducing the incidence of disease; and eliminating inequities in access throughout the communities we serve. With unmatched geographic reach, we are differentiated by our faith based and academic heritage, developing the best next generation of healthcare professionals, and for being the fastest in translating research from bench to bedside. Because we are the most vital nationally recognized health system, we are the go-to organization for any major health policy initiatives in the State.

VISION STATEMENT

JHHS/JHSMH/SJHS/CHI/UL/UMC

11

12

Statewide Reach of Merged Hospital Systems

• It is also a financial transaction that allows us to achieve mandate

• Maintain current support– UMC– JHSMH– Other

• $320M infusion of capital

– $200M for investment in the UofL academic medical center

– $120M for community and statewide program support

• $100M investment in EMR/IT

13

THIS IS FIRST AND FOREMOST ABOUT BETTER

HEALTHCARE FOR KENTUCKY(YOU KNOW OUR HEALTHCARE STATISTICS)

WHAT HAPPENS IF WE DON’T MERGE

• UMC’s payor mix is unsustainable (21%)

• UMC and JHSMH for years have sacrificed much needed capital reinvestment for facilities to fulfill their missions

• Inability of UMC to compete in market– Neurosurgery– Trauma Center

14

Merged Entity Governed by a

Community Board18 IndividualsDiverse BoardStrong Board

Academic Medical Center Committee

11 Individuals7 – UofL

GOVERNANCE OF MERGED ENTITY

Academic Affiliation AgreementDefines relationship for UofL SOM & Merged Entity

15

Our faculty/physicians practice medicine at many hospitals and clinics:

• UMC

• Norton Healthcare

• Louisville VA Medical Center

• JHSMH

• Baptist Health

• Kosair Children’s Hospital

• Trover Clinic

CURRENT UNIVERSITY OF LOUISVILLE

ACADEMIC AFFILIATION AGREEMENTS

16

• Merged Entity

• Norton Healthcare

• Kosair Children’s Hospital

• Louisville VA Medical Center

• Baptist Health

• Trover Clinic

FUTURE UNIVERSITY OF LOUISVILLE

ACADEMIC AFFILIATION AGREEMENTS WILL BE WITH…

17

18

Catholic Health Initiatives: Committed to Kentucky  • Saint Joseph Hospital founded in 1877

• Providing health care to the people of Kentucky regardless of their ability to pay is at the heart of our mission

• Appalachian Outreach Program

19

Catholic Health Initiatives: Committed to Kentucky

• CHI is committed, with our partners, to– Increasing access to care– Expanding services– Enhancing clinical quality– Preparing providers for the future

• CHI has invested nearly $1 BILLION in Kentucky health care– Includes $320 M in capital infusion in the merged entity

• CHI National Office, Erlanger, KY since 2000

20

• Innovative Partnerships– University of Louisville– Catholic Health Initiatives

• Expansion of the Academic Medical Center

• New health delivery system for the Commonwealth

21

COMMUNITY BENEFIT/CHARITY CARE

22

• Serving patients unable to pay is a hallmark of each merging entity's mission

• All partners remain strongly committed to this profound responsibility to the communities we serve

• Without merger, the ability of University of Louisville Hospital and JHSMH to serve the indigent population will be severely jeopardized

• Combined community benefit in 2009 was $270 million among University of Louisville Hospital, JHSMH andSaint Joseph Health System

WHAT ARE THE CLINICAL IMPLICATIONS OF MERGER?

23

Sanctity of the doctor-patient relationship remains unchanged• The agreements ensure the physician will be able to discuss

with patients the full array of clinical options to inform their decision making regardless of where services are provided

Continued protection of academic freedom• Agreements protect academic freedom and do not limit content

curriculum or location of university classes

Continued provision of care• All institutions that are part of the merger will continue to

provide care / expand access to all regardless of their ability to pay– All hospitals will continue to provide inpatient care as they do

today, consistent with their missions and non-profit status.– UofL clinics not part of merger; will continue as they always

have

THE FACTS ABOUT MERGER

24

End of Life Care• Advance Directives

– Physicians will continue to inform patients and families of all options available, including palliative care, terminal sedation and Hospice care

– State law controls (KRS 311.621- 311.633); all hospitals will abide by these statutes

– Can be honored consistent with ERDs with rare exceptions

Organ Donation• No change – can be performed consistent with ERDs

THE FACTS ABOUT MERGER

25

Reproductive Services• Miscarriage management

– No change – treatment can be provided consistent with ERDs• Ectopic Pregnancy

– No change- treatment can be provided consistent with ERDs• Abortion

– Elective abortion• No change-not performed at University Hospital today

– Medically indicated abortion• No change – treatment can be provided consistent with

ERDs• Emergency Contraception

– No change-treatment can be provided consistent with ERDs • Family Planning

– No change- will continue as an office procedure

THE FACTS ABOUT MERGER

26

Reproductive Services• Tubal Ligations

– Tubal ligation as a sole procedure will be performed in hospital setting outside of merged entity

– Vaginal delivery and tubal ligation will be performed in hospital setting outside of merged entity

– C-section and tubal ligation at one anesthesia will be performed in hospital setting outside of merged entity

Note: State law requires 24 hours’ written informed consent (KRS 212.347)

• Vasectomy– No change - will continue as an office procedure

• In Vitro Fertilization– No change - will continue as an office procedure

QUESTIONS?

27