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U of L Defends Jewish Hospital Purchase, Asks State For Loan

Jewish Hospital
Photo by J. Tyler Franklin
Jewish Hospital

Kentucky lawmakers again questioned University of Louisville’s decision to purchase Jewish Hospital and other assets it acquired from Kentucky One Health during a legislative meeting on Tuesday.

The takeover was finalized earlier this month with hopes that the state legislature would approve a $50 million loan to help finalize the university’s move.

University of Louisville President Neeli Bendapudi told a panel of lawmakers that the purchase helped avoid the closure of the hospital system, which the university’s medical school relies on for many of its clinical programs.

“There is risk, this is considerate risk, and we truly believe that in the best interest of the university, of the city and just as important of the entire commonwealth,” Bendapudi said.

Jewish Hospital has struggled financially for years and has had low medical safety and quality scores, which have recently improved slightly.

U of L closed a deal earlier this month to purchase the Louisville assets of KentuckyOne Health, including Jewish Hospital, Saints Mary and Elizabeth Hospital and several outpatient centers.

But that deal was finalized with the assumption that the state would furnish a $50 million loan, half of which could be forgiven if the hospital system meets certain employment and wage criteria.

Bendapudi said the university would be unable to pull out or renegotiate the purchase even if the state doesn't approve the loan.

Legislative leaders of both political parties, including the powerful chair of the Kentucky Senate’s budget committee, have expressed skepticism about the deal.

Louisville Democratic Sen. Morgan McGarvey said that the university was downplaying how much it will cost to rehabilitate the Jewish Hospital tower in downtown Louisville.

“It worries me that we have a huge building downtown with a three year life cycle on it. We don’t have enough beds that exist today. You can’t tell me today whether we can even keep that open with the money on this chart,” McGarvey said.

Outgoing Republican Gov. Matt Bevin's administration has been supportive of U of L's request for the $50 million loan.

Incoming Democratic Gov. Andy Beshear has not responded to a request for comment on the matter.

Leitchfield Republican Sen. Stephen Meredith, a former hospital administrator, said that the state should be more focused on saving rural hospitals.

“The loss of a rural hospital in a community is even more devastating. This is what bothers me. Are we willing to make the same commitment to our rural communities that we’re willing to make to you? If not, I don’t see how I can support this,” Meredith said.

The $50 million loan requested by U of L was initially planned to be issued by the Kentucky Economic Development Finance Authority, which is run by the state’s Economic Development Cabinet.

However, the loan likely goes outside the bounds of what qualifies for KEDFA because of how large it is, because it involves the health industry and other factors.

Kentucky House Speaker David Osborne has filed a bill that would create a new mechanism, which could only be used by the University of Louisville, to administer the loan.

In a statement, Osborne said that U of L’s purchase of Jewish Hospital is a “bold step to ensure access to medical care in this region.”

“The cost of preserving these positions is far less than that of creating new jobs. The proposed loan is an investment in Kentucky’s future based on the realistic plan put forth and the partial forgiveness is an additional incentive to deliver results for all stakeholders and, ultimately, Kentucky taxpayers,” Osborne said.

The legislature will consider whether to approve the loan during next year’s legislative session, which begins in January.

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