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Beshear Again Rejects Hospital Merger

By Associated Press

Frankfort, KY – Gov. Steve Beshear refused Monday to reconsider his rejection of a proposal to merge University Hospital in Louisville with two private hospital systems.

University Hospital representatives provided additional information to Beshear last week, hoping to sway him from his position that the merger isn't in the best interest of the state.

In a statement Monday afternoon, Beshear said his position hasn't changed.

University Hospital had been in talks with Jewish Hospital & St. Mary's HealthCare and Saint Joseph Health System about the merger. As governor, Beshear had final say on whether to allow University Hospital to be part of the deal.

Beshear pointed Monday to University Hospital's soaring profits in denying the request to reconsider.

"University Hospital is clearly a facility with significant strengths," he said.

University Hospital's proposal to join with the religiously-affiliated hospital systems had raised eyebrows in Kentucky. Beshear sided with critics who questioned how the merger would affect reproductive health care in the state's largest city.

Meanwhile, Jewish Hospital & St. Mary's HealthCare and Saint Joseph Health System announced Friday they'd move ahead with a two-way merger.

Beshear, like Attorney General Jack Conway who has reviewed the proposal and advised against the merger, said he had been most concerned about constitutional and public policy questions about the merging of the public hospital with the private hospitals.

Conway had advised the governor not to approve any deal that would have given up public control of University Hospital.

"Attorney General Conway and I share University Hospital's goals of continued quality health care, as well as solid financial standing, and we remain committed to working with the University to explore all appropriate paths forward for the hospital and for our Kentucky taxpayers," Beshear said in the statement.

Beshear had said that University Hospital has "an important public mission," and that if the merger were to be approved, the state would have little influence in its management and policies.

University Hospital President and CEO Jim Taylor said he had proposed a revised merger structure that would have allowed the University of Lousville to maintain the existing level of control over the hospital in the proposed merger.

"Our in-depth detailed conversations with the governor about the proposed merger began in the summer of 2010, making his outright rejection of proposals that would secure Louisville's safety net hospital a mystery," Taylor said.

Taylor said University Hospital would have received a $200 million infusion to invest in new programs, technology, research and personnel if the merger had been approved.

"As a small, stand-alone, inner-city hospital with a payor mix that includes 20 to 25 percent indigent care, University Hospital is unable to generate adequate capital from operations and is not a favorable lending risk," he said. "Without state funding and state backing for borrowing, reduction in clinical services and support for the UofL School of Medicine will occur in the coming months.