LOUISVILLE, Ky. (WDRB) – The University of Louisville abandoned its effort to buy Jewish Hospital and other local KentuckyOne Health facilities because it didn’t get acceptable proposals from three potential partners, U of L President Neeli Bendapudi said Thursday.
“In that process, the offers that we got were ones that would not make it viable for us,” Bendapudi told reporters at Grawemeyer Hall a day after the university said it was ending its pursuit.
Besides keeping the future of Jewish Hospital in limbo, the decision also leaves the university with uncertainty over programs that let faculty physicians and medical students work at Jewish and the Frazier Rehabilitation Institute. For now, Bendapudi said, U of L’s agreements with KentuckyOne remain in place.
KentuckyOne has indicated it is still seeking a buyer for its Louisville properties, keeping alive the possibility that Jewish could remain open and even maintain the pacts with U of L. KentuckyOne must give 90 days’ notice of any changes.
If a new owner of those facilities wanted to end that relationship, Bendapudi said the university’s agreement with KentuckyOne allows all residency positions to be returned to U of L or be assigned to a “location of our choosing.”
“So what does this mean? From an education point of view, the students are protected,” she said. “Our agreements are all in place, so for our doctors, other healthcare providers that are working in these facilities – nothing is imminent. There’s no problem.”
But Bendapudi said U of L has begun developing a contingency plan in case the medical programs at Jewish and Frazier Rehab can’t continue. On Thursday morning, she said, she reached out to leaders of Baptist Health and Norton Healthcare.
The university announced Wednesday it was ending its bid to acquire Jewish and other Louisville facilities managed by KentuckyOne Health after about six months. KentuckyOne is now owned by CommonSpirit Health of Chicago.
Several factors contributed to that decision, Bendapudi told reporters at a news conference. “One is finding a partner that would invest the dollars to make sure we could run all of these hospitals in a sustainable manner,” especially in cases that might require spending money on deferred maintenance and other needs, she said.
“During a negotiation process, you realize whether it’s possible to come to an agreement or not,” Bendapudi said. “And in this case it wasn’t.”
She declined to name the three possible suitors that expressed interest in partnering with U of L to help finance the deal and run the facilities. And she didn’t immediately have an exact amount U of L Health, the university’s medical-related arm, spent pursuing the KentuckyOne assets, but she said it was “hundreds of thousands of dollars.”
KentuckyOne Health operates Jewish and the nearby Frazier Rehabilitation Institute downtown, in addition to Sts. Mary and Elizabeth Hospital in south Louisville, Jewish Hospital Shelbyville and four outpatient medical centers in Louisville. It has been trying to sell them for two years.
The facilities are important for U of L, which sends transplant surgeons, other doctors and medical students to Jewish Hospital. In April, U of L Health CEO Tom Miller told the university’s board of trustees that its physicians do roughly 40 percent of the clinical work at Jewish.
KentuckyOne Health identified New York private equity firm BlueMountain Capital Management as the likely buyer of the Louisville assets, but those talks have failed to result in a deal.
The university first showed interest last December, when it notified KentuckyOne’s parent company that it wanted to acquire the Louisville facilities.
But U of L Health couldn’t do that on its own, and since February it has been searching for a partner, such as a healthcare company or investment firm, to help.
KentuckyOne and its parent company continues conversations with two other interested parties, including BlueMountain Capital and another group that wants to remain anonymous, a spokeswoman said in a statement.
"We remain committed to finding a buyer for the entire portfolio, if possible, and we anticipate this process will take some additional time," she said.
There are no plans to close Jewish Hospital, she said.