U of L, Norton Healthcare end battle for control of Kosair Children’s Hospital with cooperative agreement

A battle for control of Kosair Children’s Hospital, between Norton Healthcare and
the University of Louisville, has ended with agreements that give Norton clear control of the facility but give U of L 90 percent of the pediatric residency slots at the hospital.

“The dispute was ignited in August 2013 when Norton announced it would
collaborate in pediatrics with the University of Kentucky and its
Kentucky Children’s Hospital in Lexington – angering U of L medical
school officials,” notes Andrew Wolfson of The Courier-Journal. “U of L threatened in an Aug. 27, 2013 letter to
evict Norton from Kosair, prompting Norton to file a lawsuit in Franklin
Circuit Court. Norton built and operates Kosair Children’s Hospital,
but U of L uses it as its pediatric teaching and research hospital under
a state land lease.”

The 1981 lease will get an amendment that “secures Norton’s ownership and control of the hospital,” the parties said in a press release. The agreement “says U of L will be Norton’s primary academic partner for pediatrics
with at least 90 percent of the Norton’s residency positions at the
children’s hospital being made available to U of L,” Wolfson writes. “Norton can still
pursue other third-party relationships, such as the previously announced
intent to collaborate with UK Children’s Hospital, as long as its
commitments to U of L are fulfilled.”

The agreements became final upon approval by Gov. Matt Bevin and the University of Louisville Physicians group. The deal “also makes it possible for Norton to continue plans for more than $35 million in additional capital improvements to its children’s hospital over the next five years,” the release said. “Those plans had been held up due to the litigation.”

“This is great news for the Louisville community and the Commonwealth,” Donald H. Robinson, chair of the Norton Healthcare board of trustees, said in the release. “The
agreements clear up critical land lease and ownership issues as well as
bringing operational security to Norton while assuring stable financial support
to the U of L School of Medicine in pediatrics. The real winners here are the families
who depend on our children’s hospital for their child’s care.”

The agreement is for eight years and is automatically renewable. Norton will pay U of L $272 million over the next eight
years for academic
support and physician services, with an extra $3
million a year for “additional pediatric care investments” to be recommended by a committee with equal membership from each side. “U of L also will receive a one-time payment
of $8 million to resolve any and all financial disputes from the past,” the release said.

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