The University of Louisville is in talks with the state for potential help in buying the flailing downtown Jewish Hospital and other affiliated Louisville health practices. A spokesman with the University confirmed a Courier Journal report of the existence of a draft document laying out the plan.
He declined to elaborate, citing the preliminary nature of the document and that it hasn’t been approved by U of L’s board.
As the CJ reported, under the terms of the draft proposal, University of Louisville Hospital would buy Jewish Hospital for $10 million, and receive $40 million from Sts. Mary and Elizabeth Hospital Foundation. The Kentucky Economic Development Authority is also considering loaning U of L Hospital $50 million (which would be “partially forgivable”) to support a sale.
The loan would be contingent upon $50 million in support from the state legislature to the Kentucky Cabinet for Economic Development.
Rep. Steven Rudy, a Republican from Paducah and chair of the House budget committee, said that “preliminary conversations” have taken place over the deal.
“We get a lot of proposals, a lot of asks from a lot of different agencies. And when the General Assembly comes into session, we’ll try and make the best decisions for the best use of the taxpayers’ dollars,” Rudy said.
The legislature will convene in January to hammer out a two-year spending plan for the state.
Senate budget chair Chris McDaniel, a Republican from Latonia, expressed skepticism about the proposed arrangement, saying that “there’s a private sector solution for this.”
“If the private sector comes in there and there are adjustments that need to be made, that gets made on that organization’s dime, not on the taxpayers’,” McDaniel said.
“And that’s the big difference here. If the University of Louisville makes a mistake, it comes to taxpayers and tuition-paying students to fix it.”
Senate Health and Welfare Committee Vice Chair Stephen Meredith said he’ll have to look closely at any proposals for funding in the upcoming session. His main concern is that Jewish Hospital has been in financial trouble for many years. He’s worried about the money it would take to bring Jewish Hospital back into good financial standing.
“Unless we understand what those issues are and can address them, I’m not sure why we’re trying to sell them a sinking ship,” Meredith said, adding that there are also issues with existing infrastructure at Jewish Hospital. “From what I understand it’s going to take a sizable capital investment to bring the equipment and facilities up to par with the competitors. Where’s that money going to come from?”
Representative Jerry Miller, chair of the State Government Committee, also said he is concerned about ongoing operating losses by Jewish Hospital.
“Do they have a plan to staunch those losses in time to not experience the same problems that KentuckyOne ran into?” Miller asked.
Budget Chair McDaniel also said that he didn’t think the Kentucky Economic Development Authority had the funding to loan $50 million to University of Louisville on its own.
“I think that’s a little foolhardy for an executive branch agency to make commitments on behalf of the legislature,” McDaniel said.
Louisville Mayor Greg Fischer said that Jewish Hospital is important to Louisville. Without the hospital, Louisville would be down one emergency room, and Jewish also has a meaningful relationship with University Hospital.
“We need to find a way as a city and a Commonwealth to make sure that all the assets associated with Jewish — whether it be Frazier [Rehab Institute], Our Lady of Peace – are open and healthy,” Fischer said on Tuesday. “Without Jewish and its assets, we’d be a far worse place.”
Jewish Hospital was once an acclaimed health center nationally, but has been struggling since its purchase by health system Catholic Health Initiatives bought it. CHI has lost a lot of money running Jewish and St. Mary’s Healthcare, though the company also owns health systems across the country.
In 2017, CHI announced it was selling Jewish Hospital and the other Louisville-based health providers. The University of Louisville tried earlier this year to find a partner to buy Jewish Hospital, but failed to do so.
But U of L Health and Jewish Hospital have always worked closely. U of L Hospital doctors practice at Jewish Hospital, and CHI pays millions of dollars every year to U of L for this arrangement. Jewish also houses some U of L residents and interns and is home to the University’s cardiology program, which until recently included heart transplants.
This story has been corrected to clarify that U of L spokesman John Karman confirmed the existence of the draft report, but not the contents.
This story has been updated with additional legislator reactions.