In a story reported by WDRB this week, UofL Health CEO Tom Miller said a “heroic effort” has turned around the financially failing Kentucky One health system acquired by the University of Louisville last year.
At the same time, Miller said his claims of success shouldn’t be seen as a suggestion that UofL Health is in a position “to fund capital improvements that are needed” going forward.
Presenting in front of the October interim Appropriations and Revenue Committee, Miller testified that UofL Health ended their 2020 fiscal year with a $34 million profit. He withheld something more impressive – and significant – from his presentation: UofL Health has amassed $320 million in cash in its first year of operation.
While one might expect this accomplishment to be touted, Miller likely knows to draw attention to their enormous cash reserves in front of the General Assembly would raise legitimate questions of whether UofL still needs the $35 million taxpayer backed loan authorized in the 2020 session. Funds will be tight in the upcoming 2021 session when the General Assembly will pass a budget for the second year of the biennium.
(For context, consider that the state of Kentucky’s “Rainy Day Fund” is reported to be $460 million. Therefore, UofL Health is sitting on a pile of cash equal to 70% of what the state has tucked away to help balance the books.)
According to their end of the year financials – obtained by the Center for Open Government through an open records request – UofL Health generated $1.1 billion in revenue last year. Their liquidity, which includes cash, investments and accounts receivable, is $717 million.
The idea that UofL ever needed a taxpayer-backed loan to move forward with this deal was always implausible to anyone who looked at the facts. Still, UofL President Neeli Bendapudi told legislators the taxpayer backed loan was necessary. Now, Mr. Miller is claiming UofL Health can’t be expected to invest in their own businesses even with their solid financial position.
Bendapudi and Miller have every incentive to spin the narrative to serve their purposes. Thankfully, UofL Health and it’s affiliates are covered by Kentucky’s open records statutes. The Center for Open Government will continue to monitor this merger. The taxpayers deserve to know the many facts UofL would prefer remain in the shadows.