University of Louisville trustees approved a deal Wednesday for the school to purchase financially ailing Jewish Hospital in a transaction touted by campus and state leaders as a benefit to the region's healthcare and to the school's medical training and research programs.
The state stepped up by pledging a $50 million loan — half of which would be forgivable if certain conditions are met. Gov. Matt Bevin and House Speaker David Osborne applauded the deal at a press conference on campus shortly after trustees gave their unanimous consent.
Under the agreement, UofL will pay $10 million to acquire the Louisville-area assets of KentuckyOne Health from its parent company, CommonSpirit Health. Those assets include other hospitals and physician groups affiliated with KentuckyOne.
UofL President Neeli Bendapudi — widely credited as a driving force in achieving the deal — acknowledged that the transaction comes with risks for the university. But the school was compelled to act amid signs that Jewish Hospital's closure was imminent.
"Jewish Hospital is just too important to this community for us not to act," Bendapudi said.
Bevin called the deal a "calculated risk" that will benefit the university and community.
As part of the agreement, CommonSpirit will forgive $19.7 million in outstanding promissory notes. UofL will receive an influx of more than $76 million of working capital to meet future operating expenses.
Two local foundations will contribute tens of millions of dollars, paid over four years, to support the venture.
The state's support will be in the form of a $50 million, 20-year loan supported by Bevin's administration and top legislative leaders. Half the loan will be forgiven if the university meets conditions for job retention and medical service to underserved areas of the community and state.
The sale is expected to close Nov. 1, officials said.
The agreement culminates long-running efforts by UofL to save Jewish Hospital, which has been losing money for years and is the largest of several local facilities under the KentuckyOne Health banner. KentuckyOne's parent company put Jewish Hospital and other assets up for sale in 2017 but struggled to find a buyer.
Besides Jewish Hospital, the purchase includes Frazier Rehab Institute, Sts. Mary & Elizabeth Hospital, Our Lady of Peace Hospital, Jewish Hospital Shelbyville, Jewish Medical Centers East, Northeast, South and Southwest and physician groups affiliated with KentuckyOne.