By Matthew Keck —
The University of Louisville announced it will buy KentuckyOne Health’s Louisville assets on Aug. 14. This move was made to prevent the closure of the struggling Jewish Hospital and other local medical facilities.
U of L President Neeli Bendapudi said, “These medical facilities and the thousands of professionals who work there have for decades provided high quality medical care to patients throughout our community and beyond.”
“We are proud to protect that legacy and to ensure the continuation of that care as we acquire and enhance these facilities.”
As part of the deal U of L will be paying $10 million to acquire the KentuckyOne assets. The Kentucky Cabinet for Economic Development has pledged a $50 million, 20-year loan, to support this purchase. That loan will have to be introduced and approved by the state legislature next January.
The loan from the state was vital to help offset the significant financial risk for the university. In agreement with the loan, the state said they would forgive half of the loan if U of L meets certain criteria. KentuckyOne’s parent company, CommonSpirit Health, has also agreed to forgive $19.7 million U of L owes in outstanding promissory notes.
U of L will receive more than $76 million in anticipated capital towards future operating expenses.
Gov. Matt Bevin said, “U of L’s acquisition of the KentuckyOne facilities will maintain more than 5,000 jobs in the healthcare sector and ensure that our healthcare delivery system in Metro Louisville is preserved.”
“I am confident that this acquisition will further the incredible medical research occurring at these facilities, while simultaneously meeting the growing demand for quality, cutting-edge healthcare services.”
Two other local foundations are investing in the future of this plan. Jewish Heritage Fund for Excellence and St. Mary’s Healthcare Foundation will contribute $10 and $40 million respectively, to be paid over four years.
Outside investing has been the key to making this purchase possible for U of L said Bendapudi. Lack of financial backing led to the original deal falling through in June.
Bendapudi also said Jewish Hospital has been slated to be closed in just two months, which made these negotiations urgent.
U of L will have to determine how to operate these facilities profitably. They will also need to find money for hundreds of millions of dollars in upgrades. Bendapudi noted this purchase is a risky deal, but also one that offers opportunity.
With the addition of these hospitals, medical school residents and students will have more resources at hand. It will allow them to conduct more cutting-edge research and clinical trials. This will bring about 5,500 more employees to the University as well.
What U of L is buying as listed on their transaction sheet:
- Jewish Hospital, including visitor and employee parking garages.
- Frazier Rehab and Neuroscience Center
- St. Mary and Elizabeth Hospital
- Jewish Hospital Shelbyville
- Our Lady of Peace Hospital
- Physicians groups affiliated with KentuckyOne
- Outpatient Facilities: Medical Center Jewish East, South, Southwest, and Northeast
The U of L Board of Trustees unanimously approved the plan, expected to close on Nov. 1 pending approval. The acquired locations will be branded under U of L Health.
Photo by Gabriel Wiest / The Louisville Cardinal