LOUISVILLE, Ky. (WDRB) -- Ardent Health Services, a for-profit healthcare company with 31 hospitals in seven states, is a potential partner for the University of Louisville as the school explores ways to absorb the financially struggling Jewish Hospital.
A partnership with Nashville-based Ardent Health is "one of many options we are considering," U of L President Neeli Bendapudi said Thursday, adding that the university hasn't settled on any approach.
WDRB had reported Ardent's involvement earlier on Thursday, citing sources and records, before Bendapudi confirmed it when speaking to reporters following a board of trustees meeting.
Ardent doesn’t comment on rumors, a company spokeswoman said.
Ardent’s involvement comes as the university looks to save Jewish Hospital and the adjacent Frazier Rehabilitation Institute, where a number of U of L medical programs are based, from closing.
KentuckyOne Health has been trying to sell Jewish, Frazier and other Louisville facilities – including Sts. Mary and Elizabeth Hospital in south Louisville, Jewish Hospital Shelbyville and four outpatient medical centers around town – since May 2017.
KentuckyOne lost $57 million operating that group of facilities in the year ending June 30, 2018, and another $18 million in the three months ending Sept. 30, according to financial reports from KentuckyOne’s parent company, Colorado-based Catholic Health Initiatives.
More than a year ago, KentuckyOne identified New York private equity firm BlueMountain Capital Management as the likely buyer of its Louisville assets, but protracted negotiations have failed to result a deal.
After saying for months that it is working toward a “successful transaction,” BlueMountain Capital has declined to comment in recent weeks on whether it is still interested, and KentuckyOne has declined to say whether BlueMountain is still its “exclusive” counter-party. Neither organization provided a comment when asked Thursday.
U of L stepped into the void late last month by sending a “non-binding” letter of intent indicating the university’s interest in purchasing Jewish Hospital and the other Louisville assets up for sale.
That first step toward a deal would allow U of L access to confidential information about the facilities up for sale and to “vet potential partners,” Bendapudi told a handful of top health sciences officials in a Dec. 21 email obtained by WDRB.
U of L is believed to be looking into a “joint venture” in which a partner would provide much-needed capital to update Jewish Hospital and the other aging facilities, as well as operational expertise.
Ardent has undertaken a number of similar deals.
In 2017, the company formed a joint venture with the University of Kansas – where Bendapudi was provost before she came to U of L last year – to buy a struggling hospital in Topeka, Kansas, that was near closure.
Last year, Ardent and the University of Texas teamed to take over a 10-hospital health system in Texas.
U of L would “absolutely” need a partner if it were to take over Jewish Hospital and the other KentuckyOne facilities, Bendapudi told WDRB earlier this month.
“Certainly this is world of partnerships so that’s what we would need to look at,” she said in an interview on Jan. 7.
Bendapudi has been mum on who those partners could be and how such a deal would work. The university has also refused to release the Dec. 21 letter of intent to KentuckyOne.
Ardent’s interest was signaled in an email from November among Bendapudi and a handful of other top officials, which U of L provided to WDRB last week under the Kentucky Open Records Act.
In the email, Earl Reed, a veteran Louisville healthcare executive and the chairman of the U of L Foundation, tells Bendapudi and a handful of others that he “cobbled together” public data on Jewish and the other hospitals as a first step in assessing the “financial status” of KentuckyOne.
“As we move into due diligence we’ll obviously get much better information,” Reed wrote in the Nov. 1 message.
In addition to Bendapudi, Reed sent the email to Ardent Health CEO David T. Vandewater and Dan Moen, Ardent’s executive vice president of development. The other recipients were U of L board of trustees chairman David Grissom and trustee Nitin Sahney.
In a brief interview, Reed said the email was part of an effort to explore “options other than BlueMountain.”
He declined to comment further, except to say that the foundation – a nonprofit that manages U of L’s endowment – has no role in the KentuckyOne Health discussions.