Louisville Merger Blocked by Governor

On the last day of 2011, Kentucky reproductive health advocates, MergerWatch and our colleagues at the National Women’s Law Center all got a New Year’s present from Gov. Steve Beshear. He announced that he had rejected the proposed hospital merger that would have handed control of the University of Louisville Hospital to Catholic Health Initiatives. 

“After exhaustive discussions and research, I have determined that this proposed transaction is not in the best interest of the Commonwealth and therefore should not move forward,” Gov. Beshear said in a statement. “In my opinion the risks to the public outweigh the potential benefits.”

The Governor’s decision came on the heels of a report released by the state Attorney General which found that the potential loss of reproductive services was “a material change in the level of services at the historically public hospital, which is the principal provider of indigent care in the Louisville region.”

University Hospital, Louisville’s safety-net hospital, was seeking to merge with Jewish Hospital and St. Mary’s HealthCare and the St. Joseph Health System, which is owned by Denver-based Catholic Health Initiatives (CHI) system.  Both CHI and St. Mary’s Health Care adhere to the Ethical and Religious Directives for Catholic Health Care Services. The merger would have given CHI a 70 percent stake in the new merged entity, allowing them to impose religious restrictions on the health care in all the facilities involved.

University Hospital planned to discontinue reproductive services such as tubal ligations, therapeutic abortions and the provision of birth control at the hospital pharmacy in order to gain approval of two local Bishops, whom have moral authority in agreements that involve a Catholic-sponsored health system.

While the University Hospital did attempt to make arrangements for tubal ligations at another area hospital, concerns about the influence of religion over medical care at a public hospital were carefully considered by the Gov. Beshear.

Earlier this fall, in their quest for the release of documents related to the merger, the ACLU of Kentucky successfully convinced the state AG that University Hosptial was, in fact, a public entity. This ruling left University Hospital in a position of trying to establish itself as a secular entity willing to follow a limited list of religious directives.

Yet the Governor still questioned “the influence of a religious entity on a publicly-owned institution, especially regarding reproductive issues.”

Gov. Beshear also took issue with the prospect of the public losing control of a public asset. “If this merger were allowed to happen, U of L and the public would have only indirect and minority influence over the new statewide network’s affairs and its use of state assets, “ he said.

The $200 million that CHI had promised to inject into University and Jewish hospitals and the $100 million promised for St. Joseph’s could not be justified if it meant that University Hospital would lose local control and if the commitment to the indigent population were compromised.

An independent economist recently reviewed released merger documents and agreed that University Hospital’s mission as a safety-net provider was at risk without a written commitment to the indigent care mission by the new entity’s board.

Local advocates praised the “wise and courageous” decision made by Gov. Beshear. Opposition to the merger had spread far beyond women’s health advocates. Kentucky Alliance Against Racist and Political Repression, the Fairness Campaign, a gay-rights group, Kentuckians for the Commonwealth, Women in Transition, the Justice Resource Center and the Kentucky Health Policy Institute had all publicly denounced the merger in recent weeks.  A recent poll also indicated that the proposal was unpopular with Louisville residents once they understood the implications.

MergerWatch salutes the local advocates who worked tirelessly on this case. Yet the work is far from done.  Merger partners plan to keep working toward an agreement that would be "legally acceptable" to the state.

Stay tuned!