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Tue July 31, 2012
UK Healthcare Defends $87 Milllion In Loans As Smart Business
LEXINGTON, Ky. - UK Healthcare officials are calling an $87 million dollar loan from the university a prudent business decision, which allowed the organization to maintain its reserve funds.
The internal loans were meant to keep UK Healthcare’s cash flowing as it completed construction of its hybrid operating rooms and dealt with delayed Medicaid reimbursements, which are now beginning to speed back up.
"There's nothing unusual, nefarious, or dangerous about it," says Dr. Michael Karpf, executive vice president for health affairs at UK. He compares the loan to a decision many have faced during the economic downturn.
"In the recession if you needed some extra money, would you cash out your investments or your retirement plan or would you take a home loan for a short period of time to tide you over?"
Karpf says the loan is backed up by $220 million dollars in reserves, money that’s currently tied to investments that are only now beginning to rebound. News of the loan surfaced after the release of a report ordered by UK president Eli Capilouto that details the overall financial status of the university.