Acquisition of Jewish Hospital System secures nearly 5,000 jobs
Gov. Matt Bevin and University of Louisville (“UofL”) President Dr. Neeli Bendapudi today announced a plan to secure the future of the Jewish Hospital and other KentuckyOne Health properties and their employees.
Under the deal, University Medical Center Inc., owned by UofL, would acquire Jewish Hospital and other KentuckyOne Health assets located in the metro Louisville region and then integrate them into the UofL system, creating greater efficiencies and services throughout the area. The arrangement would preserve approximately 5,000 jobs, maintain Kentucky’s reputation in the healthcare innovation field and continue the training and research that supports the UofL medical school.
“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 Health facilities will maintain more than 5,000 jobs in the healthcare sector and ensure that our healthcare delivery system in Metro Louisville is preserved. 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.”
Dr. Bendapudi underscored the critical role Jewish Hospital and the KentuckyOne Health network play in the greater Louisville region, noting that healthcare, education and biomedical research will be stronger with the preservation of these critical programs and services.
“These medical facilities and the thousands of professionals who work there have for decades provided outstanding and important medical care to patients throughout our community and beyond,” said President Bendapudi. “We are proud to protect that legacy and to ensure the continuation of that care as we acquire and enhance these facilities.”
To secure the purchase, Gov. Bevin and Economic Development Cabinet Interim Secretary Vivek Sarin support a state-funded $50 million, 20-year, low-interest loan to University Medical Center, Inc. Half of the loan is forgivable if UofL meets certain employment criteria or extends services to currently underserved areas of the commonwealth.
The purchase includes:
•Jewish Hospital, including the Outpatient Care Center, Rudd Heart and Lung Center, offices and parking garages in Louisville
•Frazier Rehab Institute
•Sts. Mary and Elizabeth Hospital in Louisville
•Our Lady of Peace Hospital in Louisville
•Jewish Hospital Shelbyville
•Medical Centers Jewish East, Northeast, South and Southwest, all in Louisville region
•KentuckyOne Health Medical Group provider practice, based in Louisville
Interim Sec. Sarin noted the deal will secure Jewish Hospital and the KentuckyOne Health system’s total economic impact and foster new innovative, high-paying and technology-driven companies. Furthermore, the resulting organization will attract international and domestic talent necessary to support Kentucky’s vital healthcare sector in the years ahead.
“A vibrant research-driven university provides a cornerstone for economic growth,” Interim Sec. Sarin said. “We are currently working with several prominent companies considering Kentucky because of the University’s research expertise and the commonwealth’s world-class healthcare industry. As state leaders, the time is now to step up and solve this business challenge. We must put forth our best effort to preserve Kentucky’s healthcare advantage and inspire more innovation. Our plan provides a sound answer, setting Kentucky and Louisville on a path to reap tremendous benefits for decades to come.”
The UofL Board of Trustees this morning approved the deal, and CommonSpirit Health, which owns Jewish Hospital and related facilities, approved the plan earlier this week.
“We are pleased to reach this milestone for our employees, physicians, patients and the community,” said Kevin Lofton, CEO of CommonSpirit Health. “Following many months of discussions with interested organizations, we believe that UofL Health will carry the legacy and excellence of KentuckyOne Health Louisville operations into the future. I recognize all those who made this opportunity possible, particularly Gov. Matt Bevin, who understands and advocates for the importance of providing access to healthcare for all, including the poor and vulnerable. This commitment of providing access to quality care and innovation has been the focus of these hospitals for generations, as founded by the Sisters of Charity of Nazareth and Jewish community leaders.”
The plan’s financing requires approval from the Kentucky General Assembly and the Kentucky Economic Development Finance Authority.
Kentucky Senate President Robert Stivers and Speaker of the House David Osborne also expressed support for the loan. A bill will be pre-filed for consideration in the 2020 legislative session to appropriate specific funding to the Cabinet for Economic Development in order to provide the loan to UofL. That loan would allow the University to complete the acquisition of Jewish Hospital and other KentuckyOne Health facilities and integrate it into the UofL hospital system.
Senate President Robert Stivers expressed his support for the plan.
“It is evident that this multifaceted partnership holds a substantial influence within the University of Louisville, the city of Louisville, and the state as a whole,” noted President Stivers. “UofL is a R1 classified research and teaching institution providing high quality healthcare services and employment opportunities. I am personally supportive of the proposed plan and look forward to addressing this ongoing issue during the next regular session.”
House Speaker David Osborne will file legislation for the 2020 Regular Session to provide a $50 million loan from the state general fund to support the operation of Jewish Hospital and related KentuckyOne Health operations.
“For generations, both the University of Louisville and Jewish Hospital have been synonymous with quality patient care and innovative medical research,” said Speaker Osborne. “While the loss of Jewish Hospital would be a major blow to our region, it also provides a historic opportunity. The University has presented a viable path forward with realistic goals, transparency and accountability. Under this plan, we can not only avoid disaster, but create a bold new chapter with long-term health, education and economic benefits. It has significant support from the philanthropic community, as well as from Minority Caucus Chair Jenkins. Of course, none of this would be possible without the institutional renaissance that the University of Louisville is undergoing under the leadership of President Bendapudi and the Board of Trustees.”
With the General Assembly’s approval of the loan, the Kentucky Economic Development Finance Authority will be asked to consider approving the loan. The Cabinet for Economic Development is responsible for structuring and administering the loan.
Two local foundations, the Jewish Heritage Fund for Excellence and the Jewish Hospital and St. Mary’s Foundation, also committed to investing in the future of the facilities, pledging $10 million and $40 million respectively, to be paid over four years.
With financing arranged, 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 and Elizabeth Hospital and Our Lady of Peace Hospital. As part of the agreement, all facilities would be branded under the UofL Health umbrella.
(provided by Commonwealth of Kentucky Governor's Office)