Norton Healthcare commits more than $300 million to U of L, Kosa - WDRB 41 Louisville News

Norton Healthcare commits more than $300 million to U of L, Kosair Children's Hospital as part of settlement

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Kosair Children's Hospital in downtown Louisville Kosair Children's Hospital in downtown Louisville

LOUISVILLE, Ky. (WDRB) --  Norton Healthcare will pay the University of Louisville $8 million upfront – and $272 million over eight years – as the two continue their long-standing partnership in pediatric medicine at Kosair Children’s Hospital, according to a settlement reached last week.

Norton has also committed to spend $35 million on capital improvements at the downtown Louisville hospital in the next five years. Meanwhile, U of L will not stand in the way of Norton’s plan to collaborate in pediatrics with the University of Kentucky.

These are among the main provisions of the agreement, which ends a two-year-old legal dispute between Norton and U of L over control of Kosair Children’s.

Details of the agreement, reached late last week, became public on Monday.

Norton sued U of L in 2013 after the university had threatened to evict Norton from the hospital, which is on state land at 231 E. Chestnut Street dedicated to U of L, a state agency. The two had been at odds over money and over Norton’s 2013 announcement that it would partner with UK in pediatrics.

Norton and U of L will continue to collaborate at Kosair Children’s, which is the pediatric teaching hospital for the U of L medical school, for at least eight years, according to the deal.

U of L must maintain at least 90 percent of its inpatient pediatric residency rotations at Kosair Children’s, while Norton must reserve 90 percent of the residency spots at Kosair Children’s for U of L, according to the deal.

But while the two have reached a truce that will last through 2024, they have not resolved every issue.

The Dec. 17 settlement agreement, obtained by WDRB News, says U of L and Norton continue to be at odds over “which party bears responsibility” for providing the “funding support … necessary to operate an academic medical center at Kosair Children’s Hospital,” nor how much money is needed to do that.

The two sides agreed to “engage in discussions” no later than July, 2022 – 18 months before the new agreement expires – to resolve that point.

As part of the agreement, Norton made the following financial commitments:

To continue providing $30 million a year in funding for U of L’s pediatric operations, which will be used for things like academic support and residency positions

To add $24 million in additional payments to U of L, or about $3 million per year, for “pediatric care investments”

To spend $35 million on capital improvements in the next five years at Kosair Children’s

The deal also creates a new six-person group called the Pediatric Academic Medical Center Committee that will oversee the relationship between U of L and Norton at Kosair and the use of Norton’s support payments.

U of L and Norton will each appoint three members to the new committee.

“The combined agreements stabilize the relationship between Norton and U of L in pediatrics and facilitate additional investments in pediatric care, while also allowing for appropriate collaboration with UK and other providers across the state to advance pediatric care in Kentucky,” said Norton CEO Stephen A. Williams, in a prepared statement.

U of L President James Ramsey said the deal “allows both organizations to continue fulfilling their missions of caring for the children of the Commonwealth.”

Copyright 2015 WDRB News. All rights reserved.

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