U of L looking for a partner to help it rescue Jewish Hospital

The University of Louisville is looking for a partner with which to buy Jewish Hospital, Boris Ladwig reports for Insider Louisville.
“In an email obtained by Insider, University Hospital CEO and University Medical Center Board Chair Ken Marshall wrote that the institution had submitted a non-binding letter of intent to Catholic Health Initiatives, the Denver-based parent of KentuckyOne Health, to acquire its Louisville-based assets,” Ladwig reports. “This will allow us to do detailed due diligence and vet potential partners,” Marshall wrote.
KentuckyOne has been trying for more than a year to sell its Louisville assets, including Sts. Mary and Elizabeth Hospital, to BlueMountain Capital Management. The deadline for a deal has been extended more than once, and “sources have told Insider that the deal is in trouble and some of the parties involved were preparing for the hospital’s closure,” Ladwig reports. The email left unclear whether “the negotiations between KentuckyOne and BlueMountain are no longer exclusive.”
BlueMountain told Insider in an email, “Negotiations continue to advance and BlueMountain is working collaboratively with stakeholders to reach a successful transaction.” KentuckyOne said it was continuing “confidential negotiations” with BlueMountain and the university.
“Local health care experts have said that the closing of the hospital would have far-reaching consequences for many parts of the Louisville community because the 462-bed downtown facility employs thousands of highly skilled and highly paid health care professionals,” Ladwig notes. “It also takes care of tens of thousands of patients, many of them on Medicare and Medicaid.”

Jewish and Sts. Mary & Elizabeth Hospital have been losing money since mid-2017, when KentuckyOne stopped managing U of L’s nearby hospital, which is profitable. “Jewish Hospital and other KentuckyOne facilities are vital to the university and its medical school as they provide a home for programs including cardiology, cardiovascular and thoracic surgery, motility/gastroenterology, neurosurgery, physical medicine and rehabilitation and solid organ transplants,” Ladwig reports.

U of L President Neeli Bendapudi said in November that she had begun “transitioning service lines to University of Louisville Hospital and elsewhere” because of uncertainty about Jewish. “University officials later said the institution was merely making contingency plans because of the pending end of the academic affiliation agreement between the university and KentuckyOne,” Ladwig notes. “That agreement was to end Dec. 31, but has been extended until June 30.”

As part of that deal, KentuckyOne “agreed to give UofL at least $35.6 million through Dec. 31 to pay for, among other items, 51 full-time resident positions at Jewish Hospital,” Ladwig reports. “The terms of the agreement through June 30 are unknown, as the university and KentuckyOne have declined to provide copies. Insider has filed an open records request, but the university has not responded.”
If U of L took part in a deal to save Jewish, it could need support from Gov. Matt Bevin and the General Assembly. In November, Benapudi went to Frankfort “to seek help from state officials with challenges related to the struggling Jewish Hospital but was rebuffed, sources have told Insider. It was unclear whether she sought help with an acquisition of KentuckyOne’s assets,” Ladwig reports.
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