FRANKFORT, Ky. (Dec. 9, 2021) – A $35 million, partially forgivable loan issued to University of Louisville Health by the Kentucky General Assembly in 2020 now has an accelerated repayment schedule in response to positive financial performance, Gov. Andy Beshear announced today.
“I want to congratulate UofL Health on its recent success. It is great to see their facilities have benefited from the funds issued last year, and I hope to see this positive trajectory continue well into the future,” Gov. Beshear said. “We know now more than ever how vital our health care facilities are to our state’s continued growth. This is tremendous news for the Louisville area and the commonwealth.”
The loan was initially approved by the Kentucky Economic Development Finance Authority (KEDFA) in March 2020 to provide funding to absorb short-term operating losses and capital expenditures following UofL Health’s acquisition of KentuckyOne Health. The loan agreement initially included annual payments of principal and interest beginning in April 2025 over a 15-year period. Following an amendment approved during today’s KEDFA meeting, UofL Health now intends to repay the loan across four years, beginning in April 2022 and concluding in April 2025.
Since the acquisition, UofL Health continues to report a positive financial performance, ending fiscal year 2021 with a net income of $96.5 million, along with an increased number of full-time employees, higher average hourly wages and higher patient admissions. UofL Health provides care to over 1.5 million patients each year and currently employs more than 7,900 full-time employees.
“Our 12,000 health care heroes are the key to UofL Health’s success, but we share this credit with the entire commonwealth,” said Tom Miller, UofL Health CEO. “Kentucky understood the critical need to preserve health care services, jobs and expand access in underserved areas. Kentucky invested in UofL Health and Kentucky is reaping the return.”
Other details of the loan agreement remain unchanged, including the ability to forgive up to 50% of each annual loan payment based on UofL Health meeting either of two options:
- Retain 5,880 full-time, Kentucky-resident jobs being paid an average hourly wage, excluding benefits, of at least $35; or
- Meet both of the following requirements in Medically Underserved Areas (MUA): Continue operating existing facilities and open at least one additional facility within the MUA or in close proximity to serve the MUA, and increase the total number of UofL Health and its affiliates family medicine access points providing health care services from 10 to 14 in the MUA.
In the past year, UofL Health opened two new Urgent Care Plus locations in underserved areas, and 107 physicians have been recruited to improve care for the underserved population.
UofL Health used the $35 million KEDFA loan for critical upgrades and equipment needs at the acquired facilities. The most significant project was a replacement of the IT infrastructure to support electronic medical records. Other major projects include acquisition of surgery power equipment, establishing a geropsychiatric unit and redevelopment of an epilepsy unit at UofL Health - Jewish Hospital; a cath lab and detox unit at UofL Health - Mary & Elizabeth Hospital; expansion of 10 additional beds for UofL Health - Frazier Rehabilitation Institute; and air conditioning upgrades for UofL Health - Shelbyville Hospital.
UofL Health’s positive financial outlook continues recent economic momentum in the commonwealth, as the state builds back stronger following the effects of the pandemic.
This year, the commonwealth has shattered every economic development record in the books for yearly investment totals. Year-to-date, private-sector new-location and expansion announcements include $11 billion in total planned investment and commitments to create 17,000 full-time jobs across the coming years. Through September, Kentucky’s average incentivized hourly wage is $24.15 before benefits, a 10% increase over the previous year.
In September, Gov. Beshear, Ford Motor Co. Executive Chair Bill Ford, CEO Jim Farley and Dong-Seob Jee, president of SK Innovation’s battery business, announced the single largest economic development project in the history of the commonwealth, celebrating a transformative $5.8 billion investment that will create 5,000 jobs and places Kentucky at the forefront of the automotive industry’s future.
In July, thanks to strong fiscal management by the Beshear administration, the state budget office reported the commonwealth ended the 2021 fiscal year with a general fund surplus of over $1.1 billion – the highest ever in the commonwealth – and a 10.9% increase in general fund receipts to $12.8 billion.
In May, Moody’s Analytics published a positive economic outlook for Kentucky, noting mass vaccination as the driving force behind a sustained recovery in consumer services. The state’s recovery, Moody’s said, benefited from earlier reopening efforts and increased demand for manufactured goods over services. The report also found Kentucky’s manufacturing industry outperformed the nation’s since the national downturn last year.
Fitch Ratings in May improved the state’s financial outlook to stable, reflecting the commonwealth’s solid economic recovery. The state’s April sales tax receipts set an all-time monthly record at $486.5 million, as did vehicle usage tax receipts at over $64 million.
In March, Site Selection magazine’s annual Governor’s Cup rankings for 2020 positioned Kentucky atop the South Central region, and third nationally, for qualifying projects per capita. The commonwealth also placed seventh overall in total projects, the highest of any state with a population under 5 million. Site Selection also placed Kentucky in a tie for fifth in its 2021 Prosperity Cup rankings, positioning the state among the national leaders for business climate.
For more information on UofL Health, visit UofLHealth.org.
A detailed community profile for Jefferson County can be viewed here.
Information on Kentucky’s economic development efforts and programs is available at CED.ky.gov. Fans of the Cabinet for Economic Development can also join the discussion at facebook.com/CEDkygov, on Twitter @CEDkygov, Instagram @CEDkygov and LinkedIn.