U of L leaders concerned about sale of Jewish Hospital, Frazier Rehab to private equity
University of Louisville trustees expressed concerns Thursday about a New York private equity firm potentially taking over Jewish Hospital and the Frazier Rehabilitation Institute, where university doctors and medical residents have a significant presence.
LOUISVILLE, Ky. (WDRB) -- University of Louisville trustees expressed concerns Thursday about a New York private equity firm potentially taking over Jewish Hospital and the Frazier Rehabilitation Institute, where university doctors and medical residents have a significant presence.
KentuckyOne Health, the nonprofit healthcare provider, is looking to sell Jewish, Frazier and a number of other Louisville facilities. It has identified BlueMountain Capital Management, a for-profit firm, as the likely buyer and is negotiating exclusively with BlueMountain.
U of L trustee Nitin Sahney, the former CEO of health care company Omnicare, said during Thursday’s board meeting that university leaders need to be aware that BlueMountain Capital might turnaround and sell the facilities in whole or in part within a few years.
“With private equity, the moment you buy something, it’s for sale,” Sahney said. “Having an agreement with BlueMountain is not the most critical thing. It’s the terms and conditions for change in control… BlueMountain might not be the ownership in two years.”
Sahney added, “If this goes wrong, we’ll be left in the lurch.”
Trustees Chairman David Grissom said he hopes U of L would get the chance to review and approve the terms between KentuckyOne and BlueMountain.
“I think you – the university – need to know everything about that transaction,” he said.
Interim U of L President Greg Postel said that’s not guaranteed, but university and state leaders will have input in the deal because the land on which Jewish Hospital sits is owned by the state for the benefit of the university.
He said the state Cabinet for Health and Family Services and the governor’s office would be involved in signing over lease rights from KentuckyOne Health to BlueMountain.
“The state is very interested in this transaction, so there is a lot of scrutiny around it,” Postel said.
Speaking to reporters, Postel added that U of L doctors and residents account for about half the services performed at Jewish and Frazier, so the university has leverage in the deal.
He added that U of L and BlueMountain executives have talked several times, and he is optimistic about the potential relationship.
“They’re great people – bright, young, yet experienced investors,” he said. “They have investments all over the country… it’s a really substantial company.”
A spokesman for BlueMountain declined to comment. KentuckyOne Health did not provide a response Thursday.