KentuckyOne Health plans to sell money-losing group of Louisville healthcare facilities by end of the year
KentuckyOne Health is losing millions of dollars operating Jewish Hospital and a number of other Louisville-area facilities, and the health system hopes to sell the money-losing group of properties by the end of 2017.
LOUISVILLE, Ky. (WDRB) -- KentuckyOne Health is losing millions of dollars operating Jewish Hospital and a number of other Louisville-area facilities, and the health system hopes to sell the money-losing group of properties by the end of 2017.
The latest financial report from Catholic Health Initiatives, KentuckyOne’s Colorado-based parent company, sheds new light on KentuckyOne’s bombshell announcement earlier this month that it plans to sell almost all of its Louisville assets, including three hospitals and four outpatient centers.
When the plan was first disclosed May 12, a KentuckyOne spokesman said there was no timeline for the sale, and the health system released no financial information about the assets it wants to offload.
But in a report made public Friday evening, CHI said Jewish Hospital and the other properties collectively recorded an operating loss of $61 million during the nine-month period ended March 31. The loss amounts to 9 percent of the $679 million in revenues the group took in during the period.
For the same nine-month period a year earlier, the group had an operating loss of $72 million, or 11 percent.
Besides Jewish Hospital, KentuckyOne plans to sell the Frazier Rehabilitation Institute, Sts. Mary & Elizabeth Hospital in south Louisville and Jewish Hospital Shelbyville.
The group also includes KentuckyOne’s Louisville outpatient centers -- Jewish Medical Centers East, South, Southwest and Northeast – as well as the KentuckyOne Health Medical Group provider practice in Louisville.
Finally, Kentucky plans to sell Saint Joseph Martin, a 25-bed critical access facility in eastern Kentucky, and its provider practice in Martin, Ky.
CHI values the total group of assets it wants to sell at $535 million for accounting purposes, according to the report, though that’s not necessarily an indication of what they would fetch in a sale.
KentuckyOne, a statewide system with $2 billion in annual revenue, continues to be one of CHI’s worst-performing regions, according to the report.
CHI doesn’t go into much detail about KentuckyOne’s problems, but the report says “nursing and other staff shortages” have meant more spending on “contract labor,” overtime and “premium pay.”
One of KentuckyOne’s bright spots is its University of Louisville operations – University Hospital and the James Graham Brown Cancer Center.
But KentuckyOne has agreed to return the hospital and cancer center to the university on July 1 after a three-year-old joint operating agreement fell apart last year.
University Medical Center, which comprises the hospital and cancer center, took in $382 million in operating revenues in the nine months ended March 31 – or $13 million more than its expenses during the period.
CHI slightly increased the estimated financial hit it will take when the hospital and cancer center revert to the university -- $279 million.