Philadelphia hospital at risk of financial ruin explores long-term options

The fate of Philadelphia-based Hahnemann University Hospital is uncertain as leaders explore ways to strengthen the hospital's financial footing, according to The Philadelphia Inquirer.

In January 2018, American Academic Health System, part of El Segundo, Calif.-based Paladin Healthcare, acquired Hahnemann University Hospital and St. Christopher's Hospital for Children in Philadelphia from Dallas-based Tenet Healthcare. In April, a little more than a year after the deal closed, American Academic Health System said Hahnemann University Hospital was losing $3 million to $5 million a month and may have to shut down.

In April, Hahnemann University Hospital laid off 175 employees. At that time, American Academic Health System CEO Joel Freedman said the hospital wouldn't stay afloat without help from the government, insurers and its academic partner, Philadelphia-based Drexel University.

In an email to faculty in late May, Drexel University President John Fry said the university and AAHS are involved in talks about the future of Hahnemann University Hospital and St. Christopher's Hospital for Children.

"We are actively engaged in discussions with AAHS to fully understand the financial situation with the hope that we might be able to arrive at a mutually acceptable long-term plan for the hospitals. It is too early to predict the success of these efforts but Drexel's financial advisers and the AAHS advisers have been working diligently for the last few weeks on several options," Mr. Fry wrote in the email.

Mr. Fry said he has reached out to Pennsylvania Gov. Tom Wolf and others for support.

"Since my last update, the College of Medicine leadership team and our external advisers have continued to meet regularly with government officials, insurers, local healthcare leaders, and key contacts at AAHS to pursue all options to keep the hospitals open and financially viable for the future," he said. "I have also had productive meetings with Gov. Tom Wolf and Mayor Jim Kenney to apprise them of the gravity of the situation, and to ask for their assistance and support. Those conversations are continuing."

Hahnemann University Hospital's financial challenges are attributable to several factors, including a decline in inpatient volume and an antiquated IT system that has led to documentation issues and made it extremely difficult to access reliable information on the hospital's finances and operations, according to the report.

More articles on healthcare finance:

Supreme Court sides with hospitals in multibillion-dollar payment dispute
CommonSpirit's net income more than doubles to $500M
Investment gains boost Sutter Health's bottom line: 5 things to know

Copyright © 2024 Becker's Healthcare. All Rights Reserved. Privacy Policy. Cookie Policy. Linking and Reprinting Policy.


Featured Whitepapers

Featured Webinars