by Grace Schneider, Louisville Courier Journal
Courier Journal reporter Morgan Watkins explains the failed U of L-KentuckyOne negotiations.Courier Journal, Louisville Courier Journal
The University of Louisville is renewing its pursuit of Jewish Hospital and may use a $50 million loan from the state to make it happen.
According to a draft document obtained by the Courier Journal, U of L is considering buying KentuckyOne’s local facilities for $10 million as part of an arrangement under which it would receive $40 million from Sts. Mary and Elizabeth Hospital Foundation.
The state is considering loaning U of L $50 million to support its tentative plan to take over Jewish and other facilities now held by KentuckyOne Health.
U of L leaders appear to be selling the deal as a way to save the century-old Jewish and dramatically expand U of L’s health services to better compete in the marketplace.
“That is a draft document and should be considered preliminary,” U of L spokesman John Karman said. “It may not be accurate and up to date, and it has not been approved by our board.”
U of L has been under pressure to find a solution to save Jewish, which has been losing money for years and is a part of a bundle of hospitals and clinics KentuckyOne Health has been trying to sell since May 2017.
KentuckyOne, an affiliate of CommonSpirit Health, one of the nation’s largest non-profit health system, owns Sts. Mary and Elizabeth Hospital and Our Lady of Peace Hospital, as well as outpatient clinics in the Louisville area.
When KentuckyOne couldn’t come up with a buyer late last year, U of L tried to find a partner to buy the bundle of health care facilities and physicians groups. U of L has remained active in the discussions because its medical school faculty and residents have provided clinical services at Jewish and nearby Frazier Rehab under a multi-million academic affiliation agreement.
When no viable partnerships emerged, university President Neeli Bendapudi announced in June that U of L didn’t have the resources to go it alone and would withdraw altogether from the sale discussions.
But the questions of what would happen to Jewish, Frazier and U of L’s academic and clinical mission haven’t gone away, and it’s clear from the document that U of L officials, with the state, have been hard at work devising some alternative plans for U of L to take control of KentuckyOne’s local facilities.
A key piece of the possible transaction would involve the Kentucky Economic Development Authority, which may offer U of L a 20-year, $50 million partially forgivable loan to “support Jewish Hospital, economic development, job preservation, and the Kentucky tax base,” according to the draft.
A spokesman for the authority declined to comment when reached Monday night.
Under the proposal, both Jewish Hospital and U of L Hospital would be run as a “single academic enterprise,” and physician groups for Jewish and U of L would be integrated as well, according to the draft.
And in an unusual twist, the economic development authority would make the proposed loan contingent upon the legislature’s approval of $50 million in additional appropriations to the state Cabinet for Economic Development.
“It is the Cabinet’s understanding a bill will be pre-filed with anticipation of approval within the first two weeks of the 2020 Regular Session of the General Assembly,” according to the draft. That would happen in January.
To buy Jewish and the other facilities, U of L would need approval from its board of trustees.
The board of trustees met Monday morning in a private session to discuss what was described as a business proposal. U of L medical school Dean Toni Ganzel and U of L Health CEO Tom Miller were invited to attend the gathering with the trustees.
Karman said the board declined to publicly comment on what was discussed behind closed doors.
At least two Kentucky lawmakers confirmed that there have been recent discussions about Jewish Hospital’s future and how the state may play a role.
House Majority Leader John “Bam” Carney, a Campbellsville Republican, said that “we are aware of the situation there. There are discussions to see what might be done.”
“It’s a very significant situation and people are trying to find some resolution, if there is one to be found,” he said, adding that “it’s too early to get into specifics. All I can say is it’s a very significant situation and there are talks ongoing about possible solutions.”
Rep. Steven Rudy, a Paducah Republican who chairs the House budget committee, told the Courier Journal that there are “just preliminary talks about how the state may help with Jewish.
“I think there’s maybe some conversations going on about that, but don’t know that we’re ready to pull the trigger,” Rudy said.
Grace Schneider: 502-582-4082; firstname.lastname@example.org; Twitter: @gesinfk. Support strong local journalism by subscribing today: www.courier-journal.com/graces.
Reporter Tom Loftus contributed. Contact him at email@example.com.