In an October 2020 post, we wrote, “Frankfort’s lousy record backing public-private partnerships wasn’t enough to deter the General Assembly from providing a $35 million taxpayer-financed loan to the University of Louisville to acquire Jewish Hospital.”

The decision by the General Assembly put Kentucky’s taxpayers in a terrible position of financially underwriting the purchase without any authority to oversee it. Our post continued:

The Bluegrass Institute’s Center for Open Government believes transparency is crucial during the implementation of this massive health care merger. Thankfully, the state’s Open Records Act provides tools to monitor UofL Health. The Center for Open Government intends to do just that. While this effort won’t provide the public with a seat at the table, it will provide taxpayers - who the General Assembly has essentially made equity investors in the deal - with frequent updates on UofL Health’s activities.

In the past six months, the Center has utilized the open records statutes to obtain hundreds of documents. Those documents revealed the behind the scenes negotiations between UofL officials and the Cabinet for Economic Development, which resulted in UofL securing very favorable terms for the taxpayer-backed loan. The documents also showed efforts by UofL to essentially negate the job retention requirement as a condition of obtaining partial loan forgiveness.

Prior posts have provided a look at the massive cash reserves UofL Health has accumulated as well as clear evidence that UofL’s medical system was capable of securing private-sector financing while the university’s leadership was telling the General Assembly it couldn’t manage the Jewish Hospital acquisition without taxpayer help.

Going forward, our focus will shift to providing the public with regular updates on UofL Health’s financial statements. While we’ll continue to post on other items of public interest, financial transparency is critical to ensuring policymakers and taxpayers have up-to-date facts on how this merger is going.

We culled through the documents from UofL Health’s December board meeting and believe these to be important facts for the public to know about the status of certain items related to the health care organization:

• Jewish Hospital’s year to date (YTD) net loss is $11.1 million, compared to a budgeted loss of $13.9 million. Jewish Hospital’s December ‘21 net loss is favorable to the previous year’s net loss of $32.7 million. (Link)

• YTD Jewish Hospital’s admissions, surgeries, ER visits and outpatient visits are 7,500 under projections. (Link)

• YTD EBITDA for all UofL Health’s hospitals was $82.4 million, which was in excess of the budget of $47.0 million - primarily due to CARES Act receipts of $30.6 million for University Medical Center and $1.5 million for Jewish Hospital. (Link)

• Change in unrestricted net assets was $42.5 million due to the CARES Act funding and a gain of $12.8 million from the sale of Passport stock in November.

• UofL Health finished the month of January ‘21 with $349.9 million in cash reserves. (Link)

• In February, $10 million from the Jewish Hospital foundation and $17.5 million from the state loan cash reserves was moved to operating funds to pay for capital purchases.

• $9.7 million has been transferred from cash to bond investments.

• UofL Health generated over $911 million in operating cash during the first six months of their fiscal year, netting $6.3 million. (Link)

The General Assembly’s loan to UofL Health is financed through bonded debt. The debt service for the loan costs taxpayers $3.07 million annually. Up to half of the loan can be forgiven by the Cabinet for Economic Development beginning in 2025.