Yesterday, Government Affairs Director Sarah Durand testified before the KY State Senate Education Committee against bonding $35 million for the University of Louisville Hospital to buy out failing Jewish Hospital.
Here is a transcript of Durand’s comments:
The Bluegrass Institute understands that this deal was crafted with leadership long before the legislative session began. And, we want to see UofL be successful with this acquisition.
Where we respectfully disagree on this policy is the role of government and the risk posed to taxpayers and whether they should be responsible for the success or failure of bailout out a failing hospital.
As a resident of Louisville, I can tell you that unlike in rural areas where hospitals closing would have a devastating impact on those communities, we have multiple choices of hospitals in Louisville and more health care jobs than people to fill them. We value the role that UofL has in the community and the value that Jewish Hospital has provided in the past. But, there is a vibrant health care community in Louisville and Jewish Hospital is also not the only transplant and research hospital that Kentuckians have to choose from.
When you look at the UofL Hospital and the university’s finances, they have hundreds of millions of dollars in assets and revenues. There is no reason at all that UofL could not be successful in securing a private loan. If bailing out a failing hospital is in fact a lucrative move for UofL, banks would be competing for the loan and there is no reason or need to pass this bill and have taxpayers on the hook for it.
At a time when we are dealing with a pension crisis and cities and towns across the commonwealth are cutting spending on important government functions like education and public safety, this money isn’t in the budget. So just when we thought this bill could not get any worse, it’s been decided to bond it – to add to our debt and unfunded liabilities, to stick the bill with my children and your children or grandchildren who aren’t even of working age but will be paying for this when they are, especially if you decide to forgive half of it as the bill suggests. Is this such a priority that we should add this debt in mortgaging the future of the next generation? Should this be prioritized over so many other concerns the state faces when there is so simply a private-sector solution?
Lastly, how do we know UofL and Jewish Hospital won’t come back and ask for more money? This wouldn’t be the first time that the state has invested in a project and it’s grown into a multi-year investment and drain on the general fund. You look at a project like KyWired – what we thought was $30 million that we were sticking to taxpayers is now estimated to be more like $1.5 billion. But because we were already invested in it, it’s too big to fail and we just keep throwing more money at the project. How can you guarantee that they will not come back and ask taxpayers to take on even more spending or debt if they discover operational costs they didn’t consider or that the problems causing Jewish to fail are too big for them to handle and they need another government handout?