President Bendapudi: It did not turn out that we had attractive options. The offers we got were not viable.

We are really referring to a couple of things. One is finding a partner that would invest the dollars to make sure that we could run all these hospitals in a sustainable manner. As you know, with many of these, there would be fresh infusions of cash required for deferred maintenance, for IT, for those types of things. And (second), Ěýduring negotiations, you realize whether it’s possible to come to an agreement or not, and in this case, it was not.

We know that our most important obligation is to the University of Louisville. We need to make sure that we are financially viable and sustainable, and that we thrive.

How much money are you talking about?

President Bendapudi:ĚýIt’s hard to say. I don’t want to pinpoint a particular number but we were looking for a partner that would keep this viable. During the process we had three potential suitors…trying to see if this would work. In the timeframe, however, they all needed significantly longer. I’m not avoiding the question, but candidly, how much is required is dependent upon the structure of the deal. How much equity would we give out? What would happen? That’s why I’m not able to tell you. If someone came in and said, ‘we just want 10 percent,’ it would look very different from if we were going to be full partners.

What happens now?

President Bendapudi:ĚýThe good news is that both parties are committed to an orderly transition. What I am happy to tell you is that all of our agreements have been extended with no real end date. Our Academic Affiliation Agreement and Master Services Agreement are still in place. If these are to end for any reason, we have to be given a 90-day notice.

We are very reassured that … for the residents’ training … we have an agreement that if Jewish Hospital were sold, those residency slots transfer to the university or to the facility of our choosing.

Down the road, if KentuckyOne finds a partner who is not interested in extending your agreement, what happens then?

President Bendapudi:ĚýThere’s a minimum of a 90-day notice (from KentuckyOne Health) we would have to be given about a potential partner. And even then, I’m confident that given the long history of this community and the importance (of these facilities) to it, it would be a very orderly process. We have been doing contingency planning so that none of our programs is at risk. We would have to find alternative locations for the services we provide. Or maybe a potential buyer would say they want to work with us; that’s possible.

How do you guarantee these programs’ protection?

President Bendapudi:ĚýOur agreements are all in place, so for our doctors, other health care providers that are working in these facilities – nothing is imminent. There’s no problem. If (KentuckyOne Health) says they are going to shut down a facility, then we would move our programs. We would have new AAAs and MSAs with the places where we would practice and for the services we would provide. In our contingency planning we have been looking at what we can move to our facilities and we are looking at the other health systems – Norton (Healthcare) and Baptist (Health System). I have reached out to both CEOs. A lot of what we already have done has been is putting all the data into a data room…and verifying all the numbers that both sides were getting. … So the conversations (with Norton and Baptist) are not new. In contingency planning, that’s what you do: If this happens, what will we do? If this doesn’t happen, what will we do? So none of this is starting from zero because clearly, we’ve all been thinking about this as have they.

What was your level of confidence going into this and how surprising or disappointing is it that you could not find a partner?

President Bendapudi:ĚýGoing in, we knew that we had to look. It really was a moral obligation that we, as a university, had to try to keep (Jewish) open. Internally we knew that it was a toss-up whether we could do it but it’s one of those things where you say, “be brave and try.” So I give credit to our Board and to our people that we said, “we must try.”Ěý Are we disappointed? Yes. Because it would have been great to make this work. But I have to say that discretion is the better part of valor. Looking at the numbers that we saw, we could not see how we could do it in a way that would not jeopardize the university.

Again, we owed it to the university, to the community to try (and make this deal). We had an obligation to try. We were enthusiastic about the potential. It was really important to give it everything we had. And we did.

The press conference in its entirety is available here:Ěý

Talks were halted because UofL could not find a suitable partner to help fund the acquisition. UofL officials were not willing to put the university at financial risk by taking on the acquisition alone.

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“We regret ending our talks with CHI, but we must do what is fiscally responsible for the University of Louisville,” said UofL President Neeli Bendapudi. “Without a viable partner, we do not have the resources necessary to make the acquisition a reality.”

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“KentuckyOne Health is disappointed that the university was not able to secure a financial partner,” said Deborah Lee-Eddie, interim market CEO for KentuckyOne Health. “We will now continue our discussions with other interested organizations.”

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UofL and CHI have agreed to several steps as the two parties work on the changes in their relationship.

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CHI will extend the Academic Affiliation Agreement to ensure that undergraduate and graduate/resident medical education programs continue at Jewish Hospital and Frazier Rehab Institute. If programs cannot be continued at those facilities, CHI will assign those residencies to another facility requested by the university.

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The AAA is an agreement that provides conditions under which the university’s physicians and medical residents provide care for patients, serve in leadership roles for various hospital programs and services and conduct clinical trials that offer innovative treatments unavailable anywhere else in the region.

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CHI also has agreed to continue the current professional services, medical directorships and similar provisions included in the Master Services Agreement while it and UofL discuss transition planning. CHI will provide at least 90 days notice before terminating any of those individual agreements.

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Ěý“Our patients will continue to receive the highest quality care, and our students and residents will continue to receive the education and training they must have to become future providers,” Bendapudi said. “That is our unwavering commitment.”

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KentuckyOne’s local properties also include Our Lady of Peace, Sts. Mary & Elizabeth Hospital, Jewish Hospital Medical Centers East, South, Southwest and Northeast, Jewish Hospital Shelbyville and the KentuckyOne Health Medical Group.

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UofL and CHI have negotiated in good faith on the purchase of the portfolio only since December 2018.

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Services provided by UofL physicians at Jewish Hospital include organ transplantation, cardiovascular medicine and neurological surgery. The hospital is home to the only solid organ transplant facility in the region, and UofL’s renowned clinical care and research in cardiovascular medicine and spinal cord injury are conducted at Jewish and Frazier Rehab.

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Bendapudi applauded all those who tried to make a deal for the KentuckyOne assets a reality.

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“Everyone involved in these talks put dedication and hard work into them, and I thank them all,” she said. “This endeavor did not fail for lack of effort on the part of either party.”