LOUISVILLE, Ky. (WDRB) -- The University of Louisville said its turnaround plan for the struggling Jewish Hospital and other former KentuckyOne Health properties is working better than expected and that it now needs $15 million less from the state than previously expected.
The university, as late as November, has said that it “really, really needs” a $50 million, partially forgivable loan to prop up the struggling health facilities as a three-year turnaround plan is implemented. However, U of L President Neeli Bendapudi said in an email Thursday that the institution is lowering its loan request to $35 million.
“I am happy to report that we have been more successful than we had anticipated we would be at both cost savings and increasing revenues,” she wrote. “For example, we are anticipating a procurement savings of more than $7 million annually, and we will make operational reductions of nearly $10 million after Year 1.”
The university had announced in August that it would take over struggling KentuckyOne Health properties in the Louisville area, including Jewish, Frazier Rehabilitation Institute & Neurosciences Center, Sts. Mary & Elizabeth Hospital and Jewish Hospital Shelbyville.
The KentuckyOne Health properties were losing about $50 million a year as a group, and the health system had been trying to sell them for more than two years. Before U of L stepped in, the eventual closure of Jewish Hospital was a possibility, a KentuckyOne spokesman acknowledged.
The medical facilities, especially the 462-bed Jewish Hospital, are critical to the university and serve as a staging area for many School of Medicine-related functions, including cardiology, organ transplantation and neurosurgery services.
Because the properties are distressed, the acquisition actually involved KentuckyOne and affiliates providing a net $126 million to U of L in cash, debt forgiveness and other sources over a four-year period.
U of L had projected that it would take three years to break even, aside from tens of millions of dollars in facility upgrades.
Some legislators had voiced skepticism about the wisdom of using state tax dollars to prop up struggling health care facilities.
Bendapudi reiterated Thursday that despite the turnaround progress, the loan from the state remains “critical to our success as it will help us address immediate cash flow and other financial needs as we continue to make important changes in the operations and infrastructure of the expanded UofL Health system during our two- to three-year turnaround plan.
“Along with the state’s commitment of over $100 million annually passed last year in HB320 to enhance federal pass-through funding of rural hospitals, this loan signals strong bipartisan support for health care throughout Kentucky,” Bendapudi wrote.
Related Stories:
- Bendapudi: U of L 'really, really needs' $50 million from state as it swallows KentuckyOne Health
- New names set for Jewish Hospital, other KentuckyOne Health facilities as U of L nears takeover
- University of Louisville to take over KentuckyOne Health properties in bid to save Jewish Hospital
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