The Louisville Cardinal

U of L considers separating from its medical center

By Kyeland Jackson —

U of L could separate from its medical center, citing positive changes in dividing the two.

Interim President Greg Postel proposed the separation in an April 26 board of trustees meeting.

“Clinical enterprise of medicine is, really, a business. It’s a business that in many ways is distinct from other types of business that universities typically conduct,” Postel said, citing reasons to separate from the medical center.

“It provides protection to the University of Louisville itself. We all understand that healthcare is evolving rapidly. Some of the things that are happening and are likely to happen are pretty straightforward, but there are a lot of question marks and there are a lot of things about healthcare reform that today we can’t answer … the thinking is that a separately structured organization designed to be a better business entity, first of all, is more likely to be successful, but also is able to protect the university should things not go well.”

Jeffrey Balser, Vanderbilt’s medical center CEO, skyped into the meeting. Balser said the medical center improved after separating from Vanderbilt last year. He said the two entities are close, buying each others products and services.

“There’s certainly nothing to indicate that the re-organization has done anything to hurt our performance because our performance has been really outstanding his year,” Balser said, claiming work with its board and passing financial plans eased.

Their separation was not entirely smooth. Balser said PHD faculty were skeptical, questioning the separation, and the medical center is more sensitive to financial markets.

Steven Stites, Kansas University’s vice chancellor for clinical affairs, praised separating KU’s medical center and university. The two separated in 1998.

“In our campus, we’ve never been in a better place,” Stites said. “And I think it’s especially true in a public university: You have to have a strong clinical enterprise that is growing and is being successful in order to help fund the medical school and the health sciences mission. Because in an era of state budget cuts, that is otherwise extremely difficult to accomplish.”

After Balser and Stites presentation, the board held an executive session with Health Sciences workers to possibly discuss the separation. The board did not decide whether it would separate; Postel said a decision requires more information and board confirmation.

If finalized, the separation would not drastically change U of L’s relationship with the medical center.

“No real estate changes hands; The faculty are still faculty members of the University of Louisville; None of those things change,” Postel said. This is just a way of managing the business of the clinical part of what we do.”

Low clinical revenue drained the university, partially leading to U of L’s $48 million budget deficit. The deficit prompted budget cuts, hiring freezes and lay-offs across campus, forcing administrators look toward increasing student enrollment as revenue to fill the deficit. Postel said the deficit was manageable, expecting to fill it before next year’s budget finalizes.

Postel talks Jurich

Postel expects Athletic Director Tom Jurich to participate in board discussions, praising him after the April 26 board meeting.

“Tom Jurich is a very seasoned professional. He’s the athletics director, I have confidence in him in that role. He and I are partners in this,” Postel said, referring to making athletics successful. “I would expect that he (Jurich) be a participant. He’s a knowledgeable man with a lot of experience, and I think this board would benefit from hearing about his plans and aspirations.”

Postel’s comments follow U of L trustee, major university donor and Papa John’s CEO John Schnatter’s controversial comments. Schnatter ripped Uof L athletics, saying its leadership was “invisible” and “sucking the lifeblood” of U of L. Jurich declined responding to Schnatter’s comments, but Sports Information Director Kenny Klein praised Jurich’s leadership.

“Tom’s leadership of our athletics program is well-documented, has been highly successful, fiscally sound, transparent and speaks for itself,” Klein said.

Postel predicted changes for athletics, saying their finances, committees and university involvement would be considered tomorrow.

The University of Louisville Athletics Association board meets April 27. Postel, Schnatter and Jurich are members of that board.

File photo / The Louisville Cardinal