KORT Physical Therapy building in Germantown Square

KORT Physical Therapy building in Germantown Square. (WDRB Photo)

LOUISVILLE, Ky. (WDRB) – Norton Healthcare, the dominant healthcare provider in Louisville, has acquired a stake in the region’s biggest physical and occupational therapy chain, KORT.

Nearly 30 KORT clinics are now partially owned by Norton under a joint venture with Select Medical Holdings Corp., the Pennsylvania-based owner of the KORT chain.

Select Medical disclosed the deal in a press release on May 1, but the tie-up largely escaped notice locally.

In an interview, Norton chief medical officer Dr. Steven Hester said the joint venture was a natural outgrowth of Norton’s well-established links to KORT, including their decade-long partnership to provide athletic trainers to Jefferson County Public Schools.

“Obviously KORT has had a longstanding reputation in the community and is a well-respected brand, and we felt by putting the two together we could do some great things in terms of service to patient(s) and continuity of care,” Hester said. “…We were already in a relationship where we were referring a lot of patients (to KORT) for physical therapy related to hip replacements, knee replacements or orthopedic injuries.”

But some question whether the tie-up will give Norton, a nonprofit hospital system with more than $2.3 billion in annual revenue, more market power to squeeze insurers and patients for higher prices.

“I don’t think employers or those buying their own health insurance would be excited about their costs going up because a hospital company gets an additional nibble of the healthcare dollar,” said Larry Benz, who founded KORT (Kentucky Orthopedic Rehab Team) in 1987 before selling it in 2007.

Benz, who now owns a competitor physical therapy business, ProRehab, said it remains to be seen what impact, if any, the KORT-Norton tie up will have. “This is all new, and we haven’t seen any major changes,” he said.

Hester said any concern about increased costs is “unfounded.”

“Our goal is to continue to improve care and to provide the lowest costs possible at the best quality,” he said.

Hester declined to disclose the financial terms of the Norton-Select Medical joint venture, such as what percentage of the partnership each party owns. The joint venture includes 29 KORT locations in greater Louisville and three of Norton’s own outpatient physical therapy clinics.

Hester said Norton’s doctors will not be required, nor have incentives, to refer patients to KORT as opposed to unaffiliated physical therapists.

Some potential benefits of the joint venture, he said, include links between Norton and KORT’s electronic health records systems and between doctors and physical therapists who specialize in areas like recovering from shoulder surgery or chemotherapy.

“One of the things that’s of great value here is the integration from a continuity-of-care standpoint,” Hester said.

Hester said the KORT locations will retain their branding rather than coming under the Norton name.

Benz questioned Norton’s decision not to publicize the joint venture locally, saying, “They don’t necessarily want non-Norton doctors knowing a referral to a KORT location is a referral to Norton.”

But Hester said the venture wasn’t more widely publicized because, “We really just saw it as a further integration of work that we’ve already been doing.”

Reach reporter Chris Otts at 502-585-0822, cotts@wdrb.com, on Twitter or on Facebook. Copyright 2019 WDRB News. All rights reserved.

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Chris Otts reports for WDRB.com about business and economic topics, higher education and local / state government. He joined WDRB News in 2013 after seven years with The Courier-Journal. Got a tip? Chris is at 502-585-0822 and cotts@wdrb.com.