The University of Louisville said Tuesday that it is seeking a partner who would pay for an acquisition of Jewish Hospital and other medical facilities that KentuckyOne Health has been trying to sell for nearly two years.
The university Tuesday evening issued a request for proposal, a formal step to identifying a potential partner, though the scope of any purchase, a potential purchase price and details about cooperation among the parties had yet to be determined.
Insider had reported in late December that UofL had submitted a non-binding letter of intent to KentuckyOne parent Catholic Health Initiatives, based in Denver, to acquire the health system’s Louisville-based assets. CHI has since merged with Dignity Health to become CommonSpririt Health.
“We’re looking for both the capital infusion that would be necessary and the operational expertise to partner with us,” University President Neeli Bendapudi told some local media Tuesday afternoon.
The proposal calls for the university, its medical center and its physician group to form a joint venture with a yet-to-be-determined partner “to jointly either acquire, own or lease, and operate” nine KentuckyOne facilities, including Frazier Rehab Institute, Our Lady of Peace and Jewish Hospital.
The medical facilities, especially Jewish, are critical to the university and serve as a staging area for many School of Medicine-related functions, including cardiology, organ transplantation and neurosurgery services. The hospital has been struggling financially, and prolonged discussions between KentuckyOne and prospective buyer BlueMountain Capital Management had raised doubts about the facility’s survival.
Sources had told Insider that Bendapudi traveled to Frankfort in November to seek help from state officials with challenges related to the facility’s struggles but was rebuffed. The university had declined to comment on the report.
Bendapudi said Tuesday that the request for proposal reflects the university’s interest in setting up its health sciences campus for growth and “to say we’ve tried everything, we’ve left no stone unturned, we want to explore all possibilities so that we can support the health care needs of our community.”
Potential university partners have to respond by March 8 — 13 business days from Tuesday.
“We don’t know what’ll happen,” Bendapudi said at the university’s Grawemeyer Hall. “We do not have a partner at this point.”
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.
KentuckyOne has been trying to shed the Louisville assets, which also include Sts. Mary & Elizabeth Hospital, since May of 2017. Jewish and Sts. Mary & Elizabeth posted operating losses of nearly $29 million in the six months ended Dec. 31, according to a report filed last week by Catholic Health Initiatives. The report also indicated that the two facilities’ liabilities, at $81.7 million, were about four times as high as their assets.
Until December, KentuckyOne had been in exclusive negotiations with BlueMountain, a New York-based alternative asset management firm, though sources had told Insider in the fall that the deal was in trouble and that some local parties were preparing for Jewish Hospital’s closing.
KentuckyOne told Insider Tuesday that confidential negotiations with both BlueMountain and the university were continuing. BlueMountain declined to comment.
Dr. Peter Hasselbacher, emeritus professor of medicine at the University of Louisville, who writes on the local health care industry through the Kentucky Health Policy Institute, said that it would be good news if the community could preserve some of its medical assets, provided it can be done without the university having to compromise its values and independence as it had to do when it joined forces with Catholic Health Initiatives.
This story has been updated.