|Jewish Hospital casts a shadow across Louisville's Interstate 65. University Hospital is to the east.|
(Google Maps image, looking south; for a larger version of the picture, click on it)
After those stories were published, U of L President Neeli Bendapudi confirmed that the university is in talks with Ardent Health Services, which has 31 hospitals in seven states, as well as other potential partners. On Dec. 21, she sent Jewish's parent company a non-binding letter of intent to purchase, according to an email WDRB obtained through the Kentucky Open Records Act. Bendapudi said the university would “absolutely” need a financial partner to do the deal.
"The disclosure comes as hopes fade for a New York hedge fund to buy Jewish and other Louisville facilities owned by cash-starved KentuckyOne Health," the CJ's Grace Schneider and Morgan Watkins report. Those are Frazier, Sts. Mary and Elizabeth Hospital, Jewish Hospital Shelbyville and four outpatient medical centers, notes Chris Otts of WDRB.
"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," Otts reports. "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," and BlueMountain has stopped talking to journalists.
In approaching Ardent, Bendapudi is dealing with a player familiar to her. "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," Otts reports. "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."
The CJ reports, "The fate of Jewish and Frazier is critical to U of L because the hospital and rehab facility have been the home of groundbreaking research and the city's only adult organ transplant center. More than 50 U of L medical residents and dozens of doctors associated with U of L work at those facilities under a contract between KentuckyOne and the university." Jewish and Frazier are near University Hospital, of which U of L regained control from KentuckyOne last year.