UofL has abandoned plans to find a partner to acquire KentuckyOne’s Louisville health care facilities, once again putting the future of Jewish Hospital in doubt.
“We regret ending our talks … but we must do what is fiscally responsible for the University of Louisville,” UofL President Neeli Bendapudi said in a news release. “Without a viable partner, we do not have the resources necessary to make the acquisition a reality.”
The university said that it could not find a suitable partner to help fund the acquisition — estimated by one Insider Louisville source to be at $1 billion — and that university officials “were not willing to put the university at financial risk by taking on the acquisition alone.”
The move once again puts Jewish Hospital in a precarious situation, with its owner, KentuckyOne, desperate to sell it, but unable, so far, to find a buyer, even with the help of UofL.
The hospital, along with Sts. Mary & Elizabeth Hospital, has been losing more than $1 million per week, and KentuckyOne and its owner, the former Catholic Health Initiatives, have been trying to sell those and other Louisville assets for more than two years.
KentuckyOne Health Interim Market CEO Deborah Lee-Eddie said in the release that she was “disappointed” but that the system’s leaders would “continue our discussions with other interested organizations.”
For much of last year, KentuckyOne negotiated a potential sale exclusively with the alternative asset management firm BlueMountain Capital Management, but protracted talks have not resulted in a deal.
BlueMountain could not be reached Wednesday evening to say whether it is still interested in pursuing an acquisition of the Louisville assets.
The university announced early this year that it was looking for partners to acquire the facilities because they serve as a staging area for many School of Medicine-related functions, including cardiology, organ transplantation and neurosurgery services.
Health care experts have told Insider that potential buyers may have an interest to hold off on a purchase for as long as possible, because as KentuckyOne loses more money from the health facilities’ operations, its incentive to sell the facilities increases, which may reduce their purchase price.
Sources had told Insider in September that the BlueMountain deal was in trouble and that some of the potentially affected parties were preparing for the downtown hospital’s closure — though KentuckyOne officials have said that they are not planning for the facility’s demise.
Local health care experts have said that the loss of Jewish 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. It also takes care of tens of thousands of patients, many of them on Medicare and Medicaid.
The university and KOH said Wednesday that they are extending their academic affiliation agreement, through which KOH pays the university tens of millions of dollars annually to fund undergraduate and graduate/resident medical education programs at Jewish Hospital and Frazier Rehab Institute.
“If programs cannot be continued at those facilities, CHI will assign those residencies to another facility requested by the university,” the parties said.