Fayette County

KentuckyOne Health to sell Louisville hospitals but keep St. Joseph, St. Joseph East

St. Joseph East Hospital off Richmond Road in Lexington.
St. Joseph East Hospital off Richmond Road in Lexington. Pablo Alcala

KentuckyOne Health announced Friday that it plans to sell its Louisville hospitals and focus on Central Kentucky, where its holdings include Lexington’s Saint Joseph and Saint Joseph East hospitals.

The facilities to be sold are Jewish Hospital, Frazier Rehab Institute, Sts. Mary and Elizabeth Hospital, Medical Centers Jewish East, South, Southwest and Northeast, all in Louisville; Jewish Hospital Shelbyville, and Saint Joseph Martin in Eastern Kentucky.

Along with Saint Joseph Hospital and Saint Joseph East in Lexington, KentuckyOne will retain Saint Joseph Jessamine in Nicholasville; Saint Joseph Mount Sterling; Saint Joseph London; Our Lady of Peace in Louisville and Lexington; Flaget Memorial Hospital in Bardstown, and Saint Joseph Berea. KentuckyOne Health partners Clinically Integrated Network and KentuckyOne Health Medical Group providers in Central and Eastern Kentucky and Bardstown will also remain.

KentuckyOne spokesman David McArthur said that no potential buyer has yet stepped forward and there is no definitive timeline for a sale, saying that “the announcement of the evolution is the beginning of this process.”

“All viable options will be explored, as long as they position the facilities for future success, and ensure continuity of care,” McArthur wrote in an email.

On the matter of whether Lexington’s properties in the KentuckyOne network would feel changes from the sale, McArthur responded that “By focusing on the smaller footprint, KentuckyOne will be better positioned to focus on quality patient care, invest in opportunities for growth and improve the overall health and wellness of individuals across Kentucky.”

Asked about the potential for staff cutbacks, McArthur said, “No significant reductions are planned as part of this transition.”

KentuckyOne Health officials said in a release Friday that “uncertainty” in the health care industry was behind the sale. KentuckyOne was formed in 2012 by the merger of Jewish Hospital & St. Mary’s HealthCare in Louisville and St. Joseph Health System of Lexington, but has had financial and personnel difficulties.

In February 2014, KentuckyOne laid off 500 employees. Earlier this month, KentuckyOne Health terminated employment contracts with about 25 doctors as a cost-cutting measure. In April, it confirmed that it would lay off 250 staff members.

In September 2016, the company laid off three top executives: Dr. Damian “Pat” Alagia, senior vice president and chief physician executive; Randy Napier, president of Frazier Rehab Institute and Southern Indiana Rehab Hospital; and Michael Spine, senior vice president of strategy and business development. Velinda Block, the system’s chief nursing officer, resigned.

“The great change and great uncertainty in the health care industry has strained our financial health,” said Ruth W. Brinkley, president and CEO of KentuckyOne Health. “Market forces have evolved to the point that change is needed to allow ongoing support for health and wellness in Kentucky.

“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,” Brinkley said. “We understand this will bring change and questions to our employees and community partners. We have an extensive transition program underway to ease the change and ensure focus on our priorities to our patients and our partners.”

KentuckyOne’s parent company, Denver-based Catholic Health Initiatives, posted a $76 million operating loss during the last quarter of 2016, and Kentucky operations have suffered year-over-year losses.

Beth Musgrave: 859-231-3205, @HLCityhall