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8/6/2019 The local politics of brain surgery: It's not rocket science but economic development
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Abstract
Local healthcare politics in the United States has been a neglected area of
research. This article explores local healthcare politics in Louisville Kentucky as
manifested in a conflict between two local institutions over the medical specialty
of neurosurgery. This article identifies the actors, their agendas, and their
interactions. Local healthcare politics in this United States setting was not about
redistribution or access to care, but it turned out to be a matter of community
elitist bargaining over economic logic in which the doctors were subordinate
actors and elected government officials were largely excluded from the process.
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THE LOCAL POLITICS OF BRAIN SURGERY:
IT’S NOT ROCKET SCIENCE BUT ECONOMIC DEVELOPMENT
Health care reform has been a dominant issue since the Obama
Administration took office in January 2009. It has become reality with President
Obama signing into law the “Health care and Education Reconciliation Act of
2010.” In light of this milestone, a group of health policy scholars recently
recognized health care is organized and delivered at the local level and declared
the local role to be critical for health care reform success because payment
negotiation reflects local market conditions (Robert Wood Johnson Foundation,
p.1). However, health policy scholars have not clarified who these local
stakeholders are and have not articulated how local health care politics works.
Lennarson-Greer (1997) had already concluded over a decade ago that
health care delivery in the U.S. was a local responsibility. She also observed that
both urban studies and health policy scholars had ignored that reality and so there
are few theoretical findings (p.356).1 Health policy scholars seem to expect
policy outcomes out of a local political apparatus that they have failed to study
and define.
The ignorance of local how local health care politics works appears to be a
product of paradigms. Health policy scholars have focused on national and state
levels and quantitative research methods. Urban studies scholars have not
considered health care to be a central matter of local governance. However,
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“urban studies” has useful tools in this case starting with the premise that politics
consists of a tension between political structure and agency; both tend to give
indication about each other.
This article explores local health care political activity in one United
States venue through examination of a local conflict over the specialty of
neurosurgery. The conflict (with implications for the whole Louisville, KY
metropolitan area) was in 2009 between the largest healthcare provider and the
local state university with a medical school. This article first reviews the relevant,
existing scholarly literature. Then, using published media reports; it reviews the
timeline, identifies the actors, and analyzes the agendas of the actors. It then
draws theoretical conclusions from an urban political economy framework about
the findings.
LITERATURE REVIEW
Previous scholarly findings on local health care politics in the U.S. context
are from the schools of health policy, sociology, and urban studies. Most of the
work is in the form of case studies that identified political structure. Most
scholars failed to analyze local agendas and activity. The latest approach used an
urban political economy framework, suggesting a framework for both political
structure and activity. This section will review this literature.
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Sociological Studies
The sociological authors mostly reached elitist political structure
conclusions. Belknap and Steinle (1963) identified that business interests
dominated hospital board membership (pp.122-123), and that facility
development and improvement processes required “a reasonable unity between
formal governmental leadership and community leadership in major civic,
economic, social, and cultural groups” (p.89). Elling (a contemporary of Belknap
and Steinle) co-authored several qualitative studies with repeated elitist
conclusions. Starr (1982) observed that physicians historically depended upon the
capital and philanthropy of influential business elites to establish hospitals
(pp.152-153).
Two later doctoral dissertations deserve mention. Morone (1982) studied
a number of citizen-led local health systems agencies (HSA’s) established by the
National Health Planning and Resource Development Act of 1974 and found
sabotage by local politicians. Plano (1999) identified that some interest groups
decided hospital placement within Toronto Canada and Milwaukee, but he neither
conceptualized an overall picture of the relevant community power structure or
mode of political activity. While these studies contribute to knowledge, no one
has expounded on them.
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Health Policy Writings
Contemporary to Elling, Conant, and Wilson were health policy
researchers cited in later works. Conant’s (1968) decision-making study of five
communities found apathetic and ignorant publics and ad-hoc (not rational-
comprehensive) planning activities (pp.14-18). Wilson’s (1968) 21-community
study found economic elites as more influential than both politicians and
professionals in health issues (p.98). Both Conant and Wilson identified several
political tendencies 1) incrementalism; 2) a status quo; 3) inconsistent agendas;
and 4) paternalistic administrators with elite backing.
Alford’s (1975) political-economic analysis focused on New York City’s
health system. He suggested that health care institutions “must be understood in
terms of a struggle between major structural interests operating within the context
of a market society.” Alford noted that a tension exists between bureaucratic
reformers and market reformers (pp.1-2). He suggested that the popular control
of health care is unlikely, because the public is too unorganized to negotiate with
the structural interests (pp.220-222). Alford’s findings were unique but like the
dissertation writers, there was no expounding on his work.
Ginzburg (1977) anecdotally observed that elites historically controlled
the typical nonprofit community hospital. He observed the norm of multiple
generations of affluent families sitting on the same local hospital boards (p.3).
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Litman and Robins (1984) devoted one-half of a page in their health
policy textbook to political structure as it pertained to local health care. Litman
and Robins used “pluralism” to describe their view of local politics, but their
citations are not about the pluralism of community power. They referred to
“pluralism” in terms of the autonomy of doctors and not in terms of popular or
democratic community control. Their political structure discussion seemed
incidental with a focus on a standard of participatory democracy (p.20).
The later public health authors exemplify Lennarson-Greer’s point about
neglect of the local aspect. Tulchinsky and Varavikova (2000) only discuss the
local level of health care governance in bureaucratic terms as part of the federal
system (pp.530-532). Gentile-Donnell (2004) discussed the closing of a
Philadelphia public hospital in terms of formal government but failed to discuss
community power structure. Bodenheimer and Grumbach (2005) described local
policies in generalities, and only discussed the governance of community health
centers in federal versus local terms (p.60-62). Lastly, Shi and Singh (2008)
declared that “Federal, state, and local governments pursue their own policies
with little coordination of purpose or programs,” but Shi and Singh failed to
describe the local governance structure and nature of local activity (p.538). These
later health policy authors confirmed Lennarson-Greer’s point.
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Urban Studies
A number of urban studies authors produced some relevant work about
local health care governance. The studies were reflective of the paradigms of
their times evolving from cybernetics to urban political economy.
Swanson’s (1972) “cybernetic” political model consisted of seven
variables where different formulations explain government’s health care activity
care on various levels. His variables are: 1) system output, 2) system stress
(political contention, controversy, and conflict), 3) system inputs, 4) power
structure, 5) political ideologies, 6) political focus, and 7) system change
processes (pp.443-454). Local health politicians then theoretically utilize
different mixtures of the variables to achieve desired policy results. Swanson
seemed to adapt a general process model to a particular policy realm and did not
identify general structural or agency tendencies, and there was no further
expansion upon his work.
Dye (1973) stated, “In nearly every community, decision-making in health
and hospital matters is firmly lodged in the hands of leaders of the local medical
associations” (p.479). Dye did not empirically substantiate this statement and he
did not repeat it in later editions of his textbook.
Schussler (1994) explored corporatism in local health care politics through
the process of the state of Kentucky awarding the Humana Corporation the
management contract for the University of Louisville Hospital. In this case, a
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local proprietary health care corporation and government had a public-private
partnership to deliver indigent care (pp.1-2).
Britton and Ocasio (2007) explored hospital and orphanage location in
Chicago between 1848 and 1916. They identified that hospital location placement
was such that created greater visibility of the “material and symbolic benefits
provided by these facilities.”
Author (2008) conducted a case study on local health care politics in
Louisville that included historical analysis and social network analysis followed
up with field interviews on health care governance patterns. The recurring pattern
over several decades was that local politics consisted of elitist political structures
with an economic development agenda, which fit the conclusions of Molotch’s
(1976) growth machine thesis.
Within the limited body of literature on local health politics in the United
States, an elitist political structure is the most consistent theme, but as Lennarson-
Greer noted there are few findings. More recent urban studies findings have
evolved with the discipline to an urban political economy framework asking the
question “for what are the actors motivated,” which offers a more complete
picture of agenda, activity, and political structure (See Vogel, 1992 for a further
discussion of urban political economy).
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THE SETTING
This section discusses the background and setting of which the conflict
and political activity arose. It discusses the spatial setting and the nature of the
pre-existing political relationships.
The Louisville Medical Center
The Louisville (Kentucky) Medical Center consists of five teaching
hospitals affiliated with the University of Louisville Medical School. The
Louisville Area Development Association led in its incorporation in 1950 (Amster
and Zingman, 1994, p.21). To create it the political actors used University of
Louisville’s power of eminent domain to condemn and clear land around
Louisville General Hospital, Children’s Hospital, and the University of Louisville
Medical School.
Over 60 years time different non-profit hospital organizations built there
and collaborated with the University of Louisville. As a result, this hospital
complex of medical care, education and research has expanded to 22 square
blocks in size, and is viewed as a growth pole for further high-tech economic
growth.
Part of the development included the state of Kentucky paying for a new
Louisville General facility in 1978. The state then gave the University of
Louisville the deed in 1979 and the facility name was changed to University
Hospital.
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The Relationships
From 1981 through 1995, the University of Louisville Hospital had been
under the management of a proprietary manager (see Schussler for details).
Louisville-based Humana took over the management of the financially troubled
University Hospital in 1981 and managed it under contract until it divested itself
of the hospital business. Columbia-Hospital Corporation of America (HCA)
assumed the contract when it bought Humana’s Louisville hospital properties.
When Columbia HCA violated the management contract by moving its
headquarters to Nashville, Tennessee in 1995, the state of Kentucky asked the
other two hospital organizations in the medical center Alliant Health System (later
Norton Healthcare) and Jewish Hospital Healthcare Services to collaborate in
managing University Hospital.
In 1996 Alliant and Jewish entered into an affiliation agreement with the
University of Louisville to manage University Hospital as a 501c3 nonprofit
organization entitled University Medical Center (UMC). Field interviews
conducted by Author (2008) identified that despite being competitors, Jewish and
Alliant had a shared interest to get Columbia HCA out of the Medical Center
(pp.196-197).
Over the consortium’s life Alliant/Norton and Jewish gave more than $100
million, and other donations to University Hospital and the University of
Louisville Medical School, which strengthened the hospital’s previously
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neglected infrastructure. However, University of Louisville officials in turn had
an agenda to grow University Hospital, which encroached on the status quo of
Alliant/Norton’s and Jewish’s medical specialties and lines of medical expertise.
The University of Louisville eventually complained that UMC could not conduct
independent strategic planning apart from Norton and Jewish. The UMC board
stopped meeting due to the increasing conflict. In early 2007, the University of
Louisville executed a clause in the UMC affiliation agreement terminating the
consortium and giving the University of Louisville full control of the hospital
(Author, pp. 197-200). The University of Louisville then became both a
competitor and collaborator with the other hospital systems in the medical center.
THE CONFLICT OVER NEUROSURGERY
This section will explore the timeline of the pertinent conflict that revealed
the actors and their agendas. Three distinct rounds of bargaining activity
between the actors suggest the nature of the political activity.
Round #1: U of L Fires its Neurosurgery Faculty
Christopher Shields, MD, chair of the University Of Louisville
Department Of Neurosurgery and President of the Neurosurgical Institute of
Kentucky (NIKY) had been unable to address recurrent criticism from the
Accreditation Council of Graduate Medical Education that U of L neurosurgery
residents were getting insufficient experience in treating aneurysms, epilepsy and
spine damage. Hiring additional neurosurgeons with the specific sub-specialties
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would solve the problem. However, under the auspices of the University of
Louisville alone, Shields could not afford the higher salaries necessary to attract
new talent (Laidman, 2009, p.48).
Without the knowledge of University administration, Shields, made an
independent agreement on behalf of NIKY in December 2008 with Norton
Healthcare. (NIKY did 80 percent of its work at Norton facilities.) The
agreement stipulated that all of the NIKY neurosurgeons would be full-time
Norton employees. As a result, Shields could finance salaries that were 33
percent higher to attract new neurosurgeons with the desired sub-specialties to
both NIKY and the University of Louisville faculty. The plan also provided for
NIKY paying a three-fold increase in “Dean’s tax” to the university (the amount
faculty pay to the University from their practice revenues) (Laidman, p.48). The
NIKY and Norton plan had intended benefits for all the parties.
However, when Shields and a NIKY partner disclosed the plan to Edward
Halperin, the U of L Medical School dean, Halperin rejected it. Furthermore, on
February 14, 2009, Halperin sent each NIKY neurosurgeon who was also a U of L
faculty member a letter stating that an employment contract with Norton
constituted resignation from the University (Laidman, p.50). Shields sought to
bargain directly with U of L President James Ramsey on behalf of NIKY to keep
their U of L faculty positions. On February 19, 2009 Shields refrained from
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further bargaining attempts when he obtained a Ramsey memo confirming the
stance that the neurosurgeons had resigned from the faculty (Laidman, p.52).
On February 20, 2009, Norton Healthcare went public with its hiring of
the NIKY neurosurgeons and its new Norton Neuroscience Institute. Norton
publicized its plan to invest up to $100 million in neurosurgical and allied
specialties over 10 years, and that five new neurosurgeons would join Norton
within the year (Adkins, 2009, February 20).
Five days later, The Courier-Journal began playing a diplomat role in the
emerging Norton-U of L neurosurgery conflict. In an editorial it related inside
knowledge of President Ramsey’s stance that University of Louisville’s medical
complex was an ‘”under-performing asset”’ and that “He wants to leverage the
university’s medical activities to generate more money for the institution.” The
Courier-Journal credited the medical center’s success over time to the status quo
of established partnerships and alliances. Despite giving Ramsey’s strategy some
credence, The Courier-Journal called it the wrong strategy and endorsed Norton’s
expansion to be in the community interest (Hitting a nerve, p.A10).
Two days later The Courier-Journal published a response from Halperin
as a guest editorial. Halperin countered that U of L’s strategy and actions were in
the best interest of the community and that Norton’s strategy instead endangered
the community. Halperin emphasized the university’s strategic importance as “an
outstanding academic medical center and serving as an economic engine for the
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city and state.” Halperin asserted that U of L could neither let the University
Hospital Trauma Center lose its Level-One accreditation status nor let it operate at
the mercy of a competitor (due to the neurosurgeons becoming Norton
employees). Halperin reviewed U of L’s commitment to being Louisville’s
“Level-One Trauma Center” and the potential consequences if the status was lost:
severely injured patients could be diverted to Indianapolis, Nashville, Cincinnati
or Lexington (Halperin, A9).
Round #2: the Fired Neurosurgeons Agree to Help their Old Employer
Three weeks later, local newspapers reported the agreement that the eight
NIKY neurosurgeons would staff the U of L Hospital Trauma Center while U of
L looked for new neurosurgical faculty. The arrangement would expire in the
middle of May 2009 (U of L begin search for neurosurgeons 2009, March 19)
(Howington, 2009, March 20).
Two days later the NIKY neurosurgeons made a collective statement in
The Courier-Journal opinion section. They endorsed Norton’s initiative and
framed U of L’s decision to terminate them in the context of U of L’s ending the
UMC management consortium with Jewish and Norton (Shields et al 2009, March
22).
The next month The Courier-Journal continued to play dual observer and
diplomat roles. It ran an analysis piece on the Norton-U of L dispute and its
implications for accreditation of the neurosurgery residency program at
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University Hospital. The accreditation surveyors were due in mid-May 2009.
The story reviewed all the details of the conflict up until that date (Howington,
2009, April 19).
In addition to its own analytical piece, The Courier-Journal gave both
sides a chance to state their cases through guest editorials by Norton CEO
Stephen Williams and U of L President James Ramsey. Ramsey’s content was
similar to Halperin’s February piece that defended U of L’s importance both as a
provider and in its “economic engine being built at the Health Sciences Center”
(Ramsey, 2009 April 19, p.H3). On the other hand, Williams 1) reviewed the
benefits of Norton plan, 2) criticized the U of L’s strategic moves away from the
Medical Center partnerships, and 3) noted possible consequences of service
duplication by U of L. Williams affirmed that Norton would still partner with U
of L when “the “goals of both organizations could be aligned” (Williams, 2009,
April 19, p.H3). The consistent theme in both executives’ editorials was growth.
Two days later The Courier-Journal again diplomatically editorialized and
argued for a path-dependent solution to the conflict. It suggested:
Whatever the solution to the current dilemma, the right strategic goal for the Louisville community is a carefully consolidated downtown medicalcenter built on the kinds of public-private partnerships that have developedover decades. Such a high-end health complex, and all the economic
development spinoffs it can produce will involve competition, but it alsowill require as much cooperation and collaboration as highly talented andmotivated folks can muster. (Looking for a fix, 2009, April 21)
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Round #3: Bargaining to Keep the Neurosurgery Territory
There was one more publicized round of bargaining. Business First (the
weekly business newspaper in Louisville) reported that U of L bargained with
Norton to extend NIKY neurosurgical coverage at University Hospital until it
could hire new neurosurgeons. This was the first report that the Kentucky’s
governor was involved as a mediator between Norton and U of L. U of L also
sought reimbursement from Norton for the cost of hiring new neurosurgeons, and
attempted to get Norton to drop pursuit of its own, neurosurgery residency
program in exchange for giving unpaid faculty status to the neurosurgeons. The
deal fell through (Adkins 2009, May 1).
One week later U of L announced that it hired nine new neurosurgery
faculty members. Two were full-time and seven were part-time. Eight of the new
faculty were already locally practicing neurosurgeons. U of L was thus able to
resolve its accreditation issues in a timely fashion (U of L hires nine new, 2009,
May 8) (Ungar, 2009, May 9).
The Courier-Journal ran a retrospective editorial two weeks later
(Looking ahead, 2009, May 22) that retrospectively summarized the conflict
between Norton and U of L and called for peace. The Courier-Journal opined:
The best outcome would be (1) continuation of the high level of care thathas made the University Hospital trauma operation a point of community pride, and a reason for citizen comfort, and (2) full development of the planned Norton Neuroscience Institute to which Norton Healthcare says itwill commit $100 million.
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The Courier-Journal again acted diplomatically, but it espoused growth in every
instance.
THE ACTORS AND THEIR AGENDAS
Despite all the bargaining, the parties stood their ground. The University
of Louisville and Norton Healthcare both moved on after the crisis was over, and
the accreditation statuses were renewed. This section will review and analyze
what the conflict suggests about the actors and their agendas.
The Neurosurgeons of the Neurological Institute of Kentucky
The neurosurgeons of the Neurosurgical Institute of Kentucky (NIKY) and
its president comprised the first set of actors. They attempted to bargain as an
equal, independent party with Norton and the University of Louisville. Despite
being embraced by Norton Healthcare, the University of Louisville did not
recognize them as equals by terminating them as disloyal employees. Their goals
through signing employment contracts with Norton as educators and physicians
were 1) to resolve an accreditation issue and 2) grow the U of L Neurosurgery
Department into the best in the country (Laidman, p.47).
Norton Healthcare
Norton Healthcare had a straightforward agenda of growth. At their first
announcement, Norton officials touted the planned investment of $100 million
over 10 years. Norton was going to “expand diagnostic and treatment services,
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research efforts and outreach into other portions of the state.” (Adkins, 2009,
February 20).
The University of Louisville
While University of Louisville officials emphasized the potential risks to
the Louisville metropolitan area, they intertwined economics and development in
their rhetoric. They mentioned more than once their need to have a strong
bargaining position with insurance companies. However, the consistent theme in
Halperin’s and Ramsey’s rhetoric was the university’s importance to Louisville
and the state of Kentucky as an agent of economic development. Ramsey argued:
In our community, medicine is an important driver of our economy, U of L is at the forefront, currently engaging in millions of dollars in medicalresearch and attracting new scientists and researchers to our community.(Ramsey, 2009)
Therefore, from the University of Louisville standpoint losing the neurosurgeons
could have had the negative effect to the whole community in both health care
and economic terms.
The Louisville Courier-Journal
While other local media outlets also covered the conflict, The Courier-
Journal , as the daily paper for the Louisville metropolitan area uniquely stood out
in a diplomatic role. Besides the in-depth news coverage, The Courier-Journal
acted as a self-appointed insider-statesman by elucidating the situation’s salient
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nuances on the editorial page. It also provided a public forum for the parties to
state their sides of the issue.
Consistent with Molotch’s (1976) growth machine thesis as a local
newspaper, The Courier-Journal, consistently supported growth and affirmed the
status-quo of public-private relationships that had been critical to the medical
center’s success. The paper supported the Norton Neuroscience Institute while
acknowledging the community risk of University Hospital losing its Level-One
trauma center status. Only in its last editorial on the conflict (Looking ahead,
2009, May 22) did the paper say something positive about the University of
Louisville.
What has happened in the U of L-Norton confrontation is a hugelyimportant consequence of strategic decisions the university has embracedand public policy it has made and enforced. The public deserves to knowhow all this is working out. The best outcome would be (1) continuation of the high level of care that has made the University Hospital trauma
operation a point of community pride, and a reason for citizen comfort,and (2) full development of the planned Norton Neuroscience Institute towhich Norton Healthcare says it will commit $100 million (p.A10).
Elected Politicians
There is no published evidence that elected politicians had a bargaining
position in the Norton-U of L conflict. It was two months into the conflict before
the Courier-Journal (Howington, 2009, April 19) had reported that Louisville
Mayor Jerry Abramson had talked to both sides about resolving their differences
and he was concerned about University Hospital losing its Level-One trauma
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status. It was also about the same point in time that Kentucky Governor Steve
Beshear had talked to both sides about resolving the conflict (Howington, 2009,
April 19, p.A6) (Adkins, 2009 May 5). The local newspapers portrayed elected
politicians as late appearing minor actors attempting to mediate and not taking
sides.
ANALYSIS AND CONCLUSION
This case study reviewed local health care politics through a particular
conflict over the medical specialty of neurosurgery. It identified the actors, their
roles and their agendas. The findings do not derivate from the previous structural
findings of elitism; the public did not have any formal input in this matter. The
findings support the relevance of the growth machine thesis in terms of political
structure and agenda given the emphasis of both the local university and local
newspaper on growth and development.
However, in terms of local political structure, this conflict indicated more
who was not in power than who was in power. In this case, the conflict showed
the neurosurgeons collectively to be in an economically dependent position on the
organizations and thus they did not have the bargaining power on a par with the
University given that the University terminated them as disloyal employees. The
elected state and local politicians were late-appearing minor players attempting to
mediate. The conflict showed that the local state university and the largest non-
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profit healthcare provider were the parties in control and the main parties at the
bargaining table.
What this conflict revealed about the essential agenda of local healthcare
politics is clearer—it was more about growth and economic development than the
quality of neurosurgical services, or increasing the access to healthcare. The
primary actors were institutions or groups driven by a growth agenda in each of
their own interests, and not redistribution or indigent care. The NIKY
neurosurgeons wanted to grow as a practice, which would in turn improve the
University of Louisville Medical School neurosurgery program. Norton wanted
to grow its neurosurgery specialty. Besides maintaining its territory of “Level-
One” trauma care, the University of Louisville wanted to strengthen its bargaining
position in getting improved commercial insurance reimbursement rates and
expand its economic development role. The Louisville Courier-Journal always
espoused growth in its editorials even though it tended to side with Norton’s plan
as part of the old status quo of collaboration and was critical of the University of
Louisville for going rogue. In a grand sense, this was a conflict over economic
logic more than risks to accreditation.
The earlier cited editorial comment of the neurosurgeons regarding the
how the Norton-U of L conflict over neurosurgery should be interpreted in light
of the 2008 UMC consortium dissolution does suggests a political-economic
framework for interpreting the local political environment. A dynamic of both
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political and economic tension had evolved between Norton and the University of
Louisville. The University of Louisville needed Norton’s collaboration over a
decade earlier to rejuvenate University Hospital. However, the intense
collaboration in the form of the UMC management consortium eventually ceased
having economic value for all the actors. The previous local status quo of
political and economic structure ceased serving the University’s economic interest
as the condition of the University Hospital improved.
This was one of three case studies on local healthcare politics in
Louisville, which in a sense is a limitation because Louisville is not representative
of all U.S. venues and case studies cannot be generalized. This study invites
future research on other localities to examine local healthcare politics in like
manner to understand the actors and their agendas. Exploring different incidences
of both local healthcare conflict and cooperation in different locations is
necessary to understand this political arena and to begin identifying possible
implications for federal healthcare reforms on the local level.
ENDNOTES
1 For Lennarson-Greer used the term “urban health politics” to describe the local aspect. Her definition of this was “Urban health politics and policies attempt to define and fulfill theresponsibilities of cities for the health of their population, especially in regard to the hazards anddangers of urban life and the uneven concentration of disease in cities (p.356).
2 Molotch’s growth coalition is composed of local elites from the sectors of property investing,development, real estate financing, politicians, local media, universities,theaters/museums/expositions, professional sports, organized labor, self-employed professionals,and small retailers (Logan and Molotch, pp.62-85).
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