The University of Louisville is buying the struggling Jewish Hospital and other affiliated KentuckyOne health facilities in Louisville. The deal hinges on the legislature giving a partially-forgivable loan to U of L to secure the sale.
Under the terms of the agreement, U of L will pay $10 million to acquire Jewish Hospital, Frazier Rehab Institute, Sts. Mary & Elizabeth Hospital and Our Lady of Peace Hospital. Also included in the deal are Jewish Hospital Shelbyville, Jewish Medical Centers East, Northeast, South and Southwest and all physician groups affiliated with KentuckyOne.
On Wednesday, U of L President Neeli Bendapudi said she’d been working with Governor Matt Bevin and Kentucky Senate President Robert Stivers since late July to iron out details. Those conversations followed a months-long hunt for a private partner to buy KentuckyOne properties, to no avail.
“The governor in our conversation talked about how we’d waited and seen if there would be a private sector solution possible,” Bendapudi said. “But he said failure was not an option here, there are too many lives at stake.”
The plan includes a $50 million, 20 year loan from the Kentucky Economic Development Cabinet; the agreement says half of that loan will be forgivable contingent on Jewish continuing to employ Kentucky residents and providing care to west Louisville residents.
“The conditions were not just about retaining jobs, but we retain jobs for Kentucky residents,” Bendapudi said. “The other condition was that we improve the quality of health care in west Louisville and other underserved areas.”
Bevin said the private sector options didn’t give him confidence that the nearly 5,500 Louisville KentuckyOne employees would stay in Kentucky.
“They were not done in ways that were going to give confidence to us that the … nearly $300 million in payroll and the 900 doctors that are responsible for everything we are talking about were going to be cared for, were going to be given the confidence to be able to put down roots here,” Bevin said.
To finance that $50 million loan, Republican House President David Osborne said he will pre-file a bill to appropriate funding for the deal. Senator Julie Raque Adams, who is also a member of the Senate Health and Welfare Committee, said she would drum up support for the loan among other members who are reluctant.
“This acquisition opens doors for U of L medical school, providing its students and residents with more opportunities and more physicians under which they can train,” Raque Adams said. “It will increase our ability to secure more basic and applied research dollars to our community.”
The sale is expected to close November 1, pending regulatory approval and approval from the Catholic Church, which has to approve the sales of Sts. Mary & Elizabeth and Our Lady of Peace.