Long process resulted in better deal for KU Hospital, Kansas

So what does it all mean?

After months of arguments, tremendous legal bills, political posturing, egos on display, phony threats and blackmail, raw politics, self-serving efforts and valuable individuals being forced to leave their jobs, what’s the outcome?

After close to two years of arguing and debate, including secret meetings and efforts by St. Luke’s Hospital in Kansas City and several of their top leaders, a handful of Kansas City’s “we’re in control” or “we call the shots” crowd, Kansas University Chancellor Robert Hemenway, KU Medical Center Executive Vice Chancellor Barbara Atkinson, Gov. Kathleen Sebelius and perhaps the very-behind-the-scenes efforts of some in the Stowers Institute, all of whom tried to force a one-way giveaway by KUMC and KU Hospital for the benefit of St. Luke’s, what was the outcome?

Very simply, St. Luke’s got far less than it wanted.

The KU School of Medicine got some more money from KU Hospital. KU Hospital was not weakened; in fact, it is stronger today and has an opportunity to become a truly great regional hospital. And, KU Physicians Inc., now is an independent organization out of the control or use by Atkinson for any internal political gamesmanship.

Those in the secret meeting and those who wanted to use the much ballyhooed “Time to Get it Right” study had hoped to use intense pressure, promises of great private philanthropic support and other devices to get a very one-sided deal approved as early as last January. It was to be a life-saver for St. Luke’s Hospital. They wanted to get the deal done as quickly as possible.

However, as more details or consequences of such a giveaway became apparent to a larger segment of the medical community, state legislators and concerned citizens, more people started asking questions and the quick-strike strategy slowed down.

Unfortunately, members of the Kansas Board of Regents played the role of “yes men” and “yes women” for the chancellor, saying that whatever the chancellor wanted or whatever Atkinson said was a good deal was good enough for them. They didn’t ask any tough questions.

This delay allowed time for some clear heads, individuals who have the betterment and strength of Kansas and the welfare of KU as their primary interest, to slow down the fast-break, hoodwink effort.

And, even though agreements have been signed between KUMC and St. Luke’s and between KU Hospital and KUMC, the whole thing could fall apart if all parties do not measure up to their commitments. In many ways, it remains a fragile pact.

Several observations:

First, the entire negotiation was backwards, probably by the design of those in the secret meetings in the fall of 2006.

There should have been a strong agreement at the outset between KU Hospital and KUMC for a sound, sensible operating arrangement before there were separate negotiations between KUMC and St. Luke’s. It’s obvious Hemenway, Atkinson, St. Luke’s leaders and the “we’re in control” crowd realized it would be far easier to cement an arrangement without KU Hospital being involved.

This was a mistake and evidence of great arrogance by those who thought they knew better, those who knew what was best for the state and didn’t want anyone questioning what they were trying to engineer.

So much has been made of the National Cancer Institute designation. Not long ago, St. Luke’s officials say they wanted a 50-50 position with KU if and when KU received the designation. They also said if they didn’t get such a position, they would abandon KU and get a more favorable deal with hospitals in St. Louis, Boston or Houston.

There is no such designation in the agreement. In fact, KU will maintain complete control of such a designation if and when it materializes. A participating and advisory organization of “X” number of Missouri hospitals and an equal number of Kansas hospitals will be formed.

St. Luke’s does get some KU-trained residents, which will help strengthen its medical scene, but the arrangement makes it clear there will be no KU clinical care for St. Luke’s patients.

St. Luke’s will pay KU $1 million a year for being able to use KU’s name, which is a steal on St. Luke’s part.

With St. Luke’s getting so little, far less than what Hemenway and Atkinson were agreeable to, there is question among some in Kansas City about whether the anonymous Kansas City philanthropic people are going to want to come up with the bucks that were being talked about in the beginning.

Also, are St. Luke’s people now negotiating with St. Louis, Boston and Houston hospitals? Or is that another hollow threat?

St. Luke’s and KUMC people were first talking about 10-year deals, but current language calls for five-year agreements that can be altered if all parties do not measure up.

Unfortunately, many in Kansas City and elsewhere do not trust Atkinson and St. Luke’s people. History has shown, they contend, it is a mistake to count on supposedly firm understandings and agreements with these bodies.

It now is less likely that Atkinson will rise to some czar-like position in the greater Kansas City medical scene as a result of this affiliation. She and Hemenway didn’t deliver for the Kansas City crowd.

The governor tried to pack the hospital board to vote as she wished, but this effort failed. It’s likely she will back off on trying to make the KU Hospital board her personal mouthpiece. And she must be wondering now whether it was such a good idea to saddle up as closely as she did with Hemenway.

The 39th and Rainbow footprint, known as the KU Medical Center complex, now has three independent entities: KU Hospital, KUMC and KUPI. If all three work together, it can indeed become a truly outstanding medical center, whether or not it receives the NCI designation. It never needed St. Luke’s to become a finer institution, and all the threats of what would happen if St. Luke’s wasn’t an integral part of the deal have proven false. A modern, functional medical office building will be added at the site, and there are sure to be other additions in the not-too-distant future.

The real hero in the two-year saga is KU Hospital and its former CEO, Irene Cumming, who refused to knuckle under the pressure from Atkinson, Hemenway, Sebelius and the Kansas City crowd. She and her board of directors and a number of doctors were not going to be stampeded by the Kansas City business leader clique. They were determined to do what was in the best interests of the hospital, the medical school and the state of Kansas.

Cumming fought a great battle and her successor, Bob Page, continued to hold firm. Some at St. Luke’s, and certainly Atkinson, the governor and probably Hemenway, all thought Page would be easier and softer in the negotiations, more willing than Cumming to give away the store. They now know they were wrong, and, again, hospital board members remained committed to the health and welfare of the hospital rather than to an effort to win friendships with supposedly influential Kansas City people.

The role of Kansas legislators will be interesting to watch. There has been the belief among Hemenway, Atkinson and others that there is an automatic extra $5 million a year coming from the Legislature for KUMC year after year. Due to a number of situations being exposed during the past 18 months, some state lawmakers now say they want more say in this appropriation and, if it continues – that’s a big IF – how this money is spent rather than having Hemenway and Atkinson consider it a blank check.

Speaking of money, who is going to raise the $150 million, or more, that was supposed to be coming to help the St. Luke’s-KU affiliation? And who is going to raise the $500 million-plus that will be needed for NCI consideration?

There’s already talk among some state legislators about whether a much lesser sum spent on other targeted areas at KU might provide greater and more unique rewards.

Who won? Who lost? KU Hospital, Irene Cumming, Bob Page and the KU Hospital board all won. KUPI also won.

Atkinson, Hemenway probably lost in the eyes of those in Kansas City who counted on them to deliver a much more powerful arrangement for St. Luke’s.

Those making the hollow, phony threats trying to pressure the giveaway by KU to St. Luke’s lost, because they were exposed for their less-than-honest efforts.

Kansas, as a state, and its taxpayers won because KU Hospital will be able to provide even greater service to the state and its citizens.

Sebelius didn’t strengthen her position; in fact, she may have been weakened. And KUMC stayed about the same, or at least didn’t lose, as would have been the case if Atkinson and Hemenway had gotten their way with the St. Luke’s deal.

KU Hospital didn’t get everything it wanted, but it is in a far stronger position than if it had been part of the original agreement proposed by St. Luke’s, Hemenway and Atkinson.