In an effort to prevent the closure of struggling Jewish Hospital and other vital Louisville-area medical facilities, the University of Louisville has reached an agreement to assume KentuckyOne Health’s Louisville-area assets.
UofL will pay $10 million to acquire the assets from KentuckyOne’s parent company, CommonSpirit Health. As part of the agreement, CommonSpirit will forgive $19.7 million in outstanding promissory notes from University Medical Center Inc. UofL will receive more than $76 million of working capital in the form of accounts receivable and cash to meet future operating expenses.
The purchase includes:
• Jewish Hospital, including the Outpatient Center, Rudd Heart and Lung Center, offices and parking garages
• Frazier Rehab Institute
• Sts. Mary & Elizabeth Hospital
• Our Lady of Peace hospital
• Jewish Hospital Shelbyville
• Jewish Medical Centers East, Northeast, South and Southwest
• Physician groups affiliated with KentuckyOne
“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,” said UofL President Neeli Bendapudi. “We are proud to protect that legacy and to ensure the continuation of that care as we acquire and enhance these facilities.”
To help secure the purchase, Kentucky Gov. Matt Bevin and Economic Development Cabinet Secretary Vivek Sarin have pledged support for a $50 million, 20-year loan, half of which will be forgiven if the university meets certain criteria in areas of employment or service to currently underserved areas of the community and commonwealth. Kentucky Senate President Robert Stivers and Speaker of the House David Osborne also expressed support for the loan.
“We are grateful to the University of Louisville, CommonSpirit Health, and our legislative leadership for their joint efforts to preserve healthcare programs, services and jobs that are vital to the University of Louisville, the UofL Medical School, Metro Louisville, and the entire Commonwealth,” said Gov. Bevin.
“UofL’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,” Bevin added. “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 local foundations, the Jewish Heritage Fund for Excellence and the Jewish Hospital and St. Mary’s Healthcare Foundation, also are investing in the future of the facilities, contributing $10 million and $40 million, to be paid over four years, respectively.
The outside investment is vital to the agreement, as it helps offset the significant financial risk such a purchase poses to the university, Bendapudi said. While acknowledging the risk, she stressed the upside of the acquisitions, noting that the additional medical facilities will strengthen UofL’s academic medical center, providing more opportunity for residents and students at the university’s Health Sciences Center. The additional facilities and resources also will provide venues in which to conduct leading-edge research and entice more clinical trials, external funding and renowned faculty to the university.
“This has been an arduous process, and it took an outstanding team and hard work to get us to this point,” Bendapudi said. “I want to thank our governmental leaders, our trustees, the foundations and, of course, our team.”
Approved by the UofL Board of Trustees at its meeting this morning, the sale is expected to close Nov. 1, pending regulatory approvals and the consent of the Catholic Church, which must approve the sale of Sts. Mary & Elizabeth and Our Lady of Peace. As part of the agreement, the facilities will be branded under the UofL Health umbrella.
To view the latest updates, visit uoflhospital.org.