North Philadelphia Health System CEO to resign as part of cost-cutting plan

A bankruptcy judge has approved an amended plan that keeps Girard Medical Center in Philadelphia open.

After selling St. Joseph's Hospital in early 2017, North Philadelphia Health System, which filed for bankruptcy in December 2016, only operates Girard Medical Center, a behavioral health and drug treatment facility.

In August, the bankruptcy court tentatively approved a plan that allowed Ironstone Real Estate Partners of Philadelphia to acquire most of NPHS' assets for $8.5 million. Under the plan, the city was to lease Girard Medical Center from Ironstone for one year, and NHS Human Services in Lafayette Hill, Pa., was to operate the facility. However, the city was unable to finalize an agreement with NHS. City officials subsequently began talks with NPHS leaders about managing Girard Medical Center.

Under the revised plan, Girard Medical Center will be sold to Ironstone. The city will lease the facility from Ironstone for $2.2 million a year, and NPHS will sublease the hospital from the city and run the facility until a permanent operator is secured, according to the Philadelphia Business Journal

In addition, NPHS negotiated a 15 percent payment rate increase with Community Behavioral Health, which contracts with the city to manage mental health services for Philadelphia Medicaid recipients. Community Behavioral Health has also agreed to subsidize Girard Medical Center's losses over the next three months while a final reorganization plan is put into place, according to the report. 

To reduce operating costs, Community Behavioral Health is requiring NPHS CEO George Walmsley III and other executives to resign once the sale is completed.

"I can leave with my head high because all 550 employees will remain under the NPHS plan," Mr. Walmsley said Thursday, according to the Philadelphia Business Journal. "I can also leave knowing that the mission to care for the most neediest patients … will remain at the Girard Medical Center campus."

More articles on healthcare finance:

Healthcare bankruptcies more than triple in 2017
Cleveland Clinic's operating income tumbles 32% in Q3
5 healthcare CFOs in the headlines

© Copyright ASC COMMUNICATIONS 2017. Interested in LINKING to or REPRINTING this content? View our policies by clicking here.

 

Top 40 Articles from the Past 6 Months