KentuckyOne Health has narrowed the list of suitors for Jewish Hospital and other assets it wants to sell and expects to lead executives of interested parties on facility tours later this summer, the organization’s interim CEO said.
Chuck Neumann, who also serves as the health system’s president, said that KentuckyOne, with the help of its parent company, Catholic Health Initiatives, and financial adviser, Morgan Stanley, is “entering the due diligence phase.” Neumann made the comments Wednesday in a “strategic update” Insider has obtained.
Neumann has served as interim CEO since mid-July, when then-CEO Ruth Brinkley stepped down. The health system announced her departure in mid-May, a week after saying that significant challenges in the health care industry had prompted its plan to sell major Louisville assets, including Jewish hospital, Frazier Rehab Institute, Sts. Mary & Elizabeth Hospital, Medical Centers Jewish East, South, Southwest and Northeast, Jewish Hospital Shelbyville, Saint Joseph Martin and KentuckyOne Health Medical provider practices in Louisville and Martin.
Neumann said Wednesday that now that the number of initial suitors had been narrowed, “thousands of documents will be reviewed” in the coming weeks.
“Due to confidentiality agreements we cannot share any additional details at this time,” he said. “We understand there may be rumors; know that we will provide additional details when possible.”
The interim CEO provided the update in a what he described as a “new weekly communication for all KentuckyOne Health employees and physicians to help us all stay on track and continue the excellent care.”
Jewish, a 462-bed hospital, and other KentuckyOne facilities have been plagued by financial struggles. Those difficulties were exacerbated by the system’s recent separation from the University of Louisville Hospital, which has financially propped up KentuckyOne’s other facilities.
According to a financial report by KentuckyOne’s parent, Catholic Health Initiatives, Jewish Hospital and the other assets KentuckyOne wants to sell incurred an operating loss of $12.7 million in the quarter ended March 31. Meanwhile, University Medical Center, which includes University Hospital, in the same quarter generated a profit of $13.1 million.
KentuckyOne Health was created by the merger of the former Jewish Hospital & St. Mary’s HealthCare and Saint Joseph Health System. Almost since its inception, the nonprofit health system struggled financially, racking up losses of about $300 million in fiscal years 2010 to 2014, according to IRS records.
In April, the system said that it was cutting 150 jobs to cut costs, and another 100 employees transferred to UofL hospital or took early retirement.
CHI, based in Denver, is in merger talks with San Francisco-based Dignity Health, which operates 400 care centers, including hospitals, in 22 states and employs 62,000, including more than 9,000 physicians. CHI operates 102 hospitals in 19 states and employs 95,000, including nearly 4,000 physicians. Combined, the two systems generate annual operating revenue of $27.5 billion. The talks have reportedly entered the final stages.
KentuckyOne told Insider Thursday afternoon that it had nothing to add at this point.