Hahnemann creditors want emergency department shut down July 17

UPDATE: As of Sunday, July 14, the Hahnemann emergency department remains open for non-critical patients. Admissions to the hospital from the ED are slated to end on July 17.

Plans to wind down operations at Hahnemann University Hospital gained speed Thursday as the debt-ridden hospital moves through U.S. Bankruptcy Court in Wilmington.

The hospital’s creditors want to shut down Hahnemann’s emergency department on Wednesday. The hospital is losing money rapidly, making it harder to sell the parent company’s most valuable asset, St. Christopher’s Hospital for Children, a lawyer for Hahnemann said in court.

The hospitals are owned by Philadelphia Academic Health System and filed for Chapter 11 bankruptcy in late June. By selling St. Christopher’s, the creditors hope to raise cash to pay themselves and others Hahnemann owes.

“Every dollar I spend in the emergency room at Hahnemann is a dollar I’m taking away from something else, that is, St. Christopher’s Hospital,” said Mark Minuti, a lawyer with Saul Ewing Arnstein & Lehr who represents Hahnemann. “Nobody wants [Hahnemann] to close.” But it’s not bringing in enough money to pay its costs, and nobody is offering to bail it out.

Most Hahnemann admissions come through its emergency department, so shutting the ER would rapidly reduce its patient population toward zero.

Minuti said he was close to an agreement with the state, the city, and others with a stake in Hahnemann’s services to borrow money to run the hospital as it moves toward its shutdown. Gov. Tom Wolf and Mayor Jim Kenney have demanded that Hahnemann not close abruptly, which would leave residents of some of the city’s poorest neighborhoods with less access to emergency care.

Nate Wardle, press secretary for the Pennsylvania Department of Health, would not confirm whether the department supported a Wednesday closure.

"At this time, the temporary manager and the department are working with Hahnemann to ensure a safe and orderly wind-down process,” he said in an email.

In a joint statement, Wolf and Kenney blasted Joel Freedman, the head of Hahnemann’s parent company.

“The situation at Hahnemann University Hospital, caused by CEO Joel Freedman and his team of venture capitalists, is an absolute disgrace and shows a greed-driven lack of care for the community," they wrote.

“While it is clear that the hospital’s current operation is no longer financially viable, we are both committed to working with potential investors to find support for the restructuring of Hahnemann and for protecting St. Christopher’s Hospital for Children."

A lawyer for Freedman declined to comment.

The emergency department has stopped accepting critically ill patients and gave up its trauma center designation. Maternity services are to end Friday, and as of Tuesday, the 496-bed hospital had just 97 inpatients.

Kathleen Dakosty, 38, of Society Hill, receives infusions every three weeks at Hahnemann to treat an immunodeficiency disorder. Her next was scheduled for Friday, but on Thursday morning she got a call asking her to come in that day, as she wouldn’t be able to get her infusion at Hahnemann on Friday or later.

“Even if I do get it this week, that only gives me three weeks to figure out the next" infusion, Dakosty said.

A spokesperson for Philadelphia Academic insisted that the infusion center would remain open Friday.

Other patients and hospital workers, as well as politicians and others, protested outside the hospital Thursday, holding signs that read “Patients Before Profits.”

The same day, Sodexo Inc., which provides food services at Hahnemann, notified the state that it would lay off 106 workers when the hospital closes.

While nearby hospitals are working to absorb displaced patients, and hospital workers fire off resumés to potential employers, Hahnemann announced plans Wednesday to transfer its physician training programs to Tower Health.

Administrators said the move would minimize disruption for the medical residents, many of whom arrived just weeks ago to begin their training in Philadelphia.

Tower Health has agreed to pay $7.5 million to acquire Hahnemann’s 500-plus residency and fellowship slots. Residents would be guaranteed a spot at one of Tower’s six hospitals, the largest of which is the 716-bed Reading Hospital in Berks County, according to court documents. The system’s only Philadelphia property is the 148-bed Chestnut Hill Hospital.

One major issue is that the Tower system has accredited residency programs in only five of the 15 medical specialties available at Hahnemann.

The accreditation process typically takes between nine months and a year, but the Accreditation Council for Graduate Medical Education (ACGME) said Thursday that it would expedite matters to make accreditation decisions at Tower before Hahnemann’s planned closure Sept. 6.

“The ACGME is expediting its application and review process for new programs that intend to continue the education of residents or fellows displaced by the Hahnemann closure,” said Susan White, a spokesperson for ACGME, in an email.

But the deal still has several hurdles to clear. The U.S. Centers for Medicare and Medicaid Services, the Pennsylvania Department of Health, and “any other applicable regulatory authority or governmental body” must sign off on the deal before it can be approved by Bankruptcy Court, according to court documents.

In order to acquire the full block of Hahnemann residency slots, Tower is also seeking the hospital’s Medicare ID number, which controls how many residents a hospital can have and enables hospitals to receive federal funding for resident training. Medicare, the federal health program for the elderly and disabled, also pays for much of the nation’s physician training.

Typically hospitals that accept residents above their Medicare cap must cover the full training and salary costs on their own.

The exception is when a teaching hospital or residency program closes. In such cases, hospitals can stretch beyond their cap to accept “orphaned” residents as temporary transfers and get Medicare funding for them.

But an influx of more than 500 new doctors-in-training to a health system that currently has just 118 residents would be more than a stretch, said Gerard Anderson, a professor of health policy and management at Johns Hopkins Bloomberg School of Public Health.

“The reason they want to buy the Medicare ID number is, they want to be considered, effectively, Hahnemann,” he said. Otherwise, “if they transfer these [slots] to the new hospital, they probably wouldn’t get credit for any of the residents.”

If successful, the deal would advance Tower’s long-term plan to develop a medical training program with Drexel University, which has used Hahnemann as its primary teaching hospital.

The two organizations in February announced a 20-year academic agreement, with a four-year medical school near Reading Hospital to open for the 2021 school year. When fully operational, the school is expected to have up to 200 medical students.