State, City Pledge $15M to Fill Gaps Caused by Hospital Bankruptcy

PHILADELPHIA—On a day when Presidential-hopeful and U.S. Sen. Bernie Sanders addressed a rally in front of the troubled Hahnemann University Hospital, Pennsylvania Gov. Tom Wolf and Philadelphia Mayor Jim Kenney said their administrations are prepared to spend up to $15 million to address potential gaps in service and continuity of care related to the recent bankruptcy filing by the owners of Hahnemann and St. Christopher’s hospitals.

Gov. Wolf and Mayor Kenney also called on the White House and Congress to match all state and local funding and to cover the debts accumulated by both governments to help ensure Hahnemann patients and workers are protected.

The American Academic Health System of El Segundo, CA told its employees on June 26 its intent to close the hospital, which first opened in 1848, this September. The hospital employs more than 2,000 workers.

Philadelphia Academic Health System, LLC and a number of its affiliates filed for Chapter 11 bankruptcy protection on June 30.

State officials say the company’s debts to the state and city collectively make up almost $40 million of its growing $300 million operating deficit. Both governments had been working with the hospital ownership—American Academic Health System—to ease the resolution of these debts before its owners declared bankruptcy.

The state and city have been working with the on-site management team to protect public health by ensuring that the hospital’s pending closure is safe and orderly. Any new funding from the state and city would be used to cover any new plan that might emerge at that site to cover gaps in service and continuity in care should the hospital close, they noted.

Gov. Wolf and Mayor Kenney’s in their full joint statement, said, “At this point, there is no means to provide public funding to bail out the current owners. We are fighting to maintain patient safety, save access to care and employment, protect St. Christopher’s Hospital for Children, and mitigate the damage done by the current owner. This demands a long-term strategy and giving millions in taxpayer funds to Joel Freedman or his financiers is not a responsible one.

They added, “We are prepared to spend $15 million from the state and city, to be matched by the federal government, for viable solutions to address gaps in service and continuity of care for Hahnemann patients, and incentivize a long-term solution to emerge to serve the community at this site.”

“We need the federal government to step up and join us in protecting these patients and workers. The White House and Congress must be equally invested in protecting patient care in Philadelphia and they should match any state and local funds committed to that goal. We will work with our partners in the Senate and House to fight for federal support.”

Freedman, the CEO of American Academic Health System, released a statement on Monday afternoon. Freedman according to a PennLive.com report stated that Hahnemann Hospital owner American Academic Health System was open to other remedies to keep Hahnemann open. “With our liquidity rapidly depleting and little time to spare, we could not find any other takers, forcing us to do the only responsible thing: use remaining resources to assure patient safety through an orderly closure,” Friedman stated.

The governor and mayor concluded their statement by noting that the state and city “are committed to protecting St. Christopher’s Children’s Hospital and working with potential investors to find support for maintaining a level of medical services in the community served by Hahnemann, as well as saving jobs, lives, and meeting the needs of Philadelphians.”