PNHP

A for-profit company bought, then closed, a Philadelphia hospital. Medicare for All could have saved it.

Hahnemann University Hospital in Philadelphia is slated to close in September, less than two years after a private equity firm bought it.

By Walter Tsou, M.D., M.P.H.
Tarbell, August 1, 2019

Fifty-four years ago, President Lyndon Johnson went to Independence, Mo., to present the first Medicare cards to President and Mrs. Harry Truman and to sign the Medicare Act of 1965.  Said Johnson, “Through this new law . . . every citizen will be able, in his productive years when he is earning, to insure himself against the ravages of illness in his old age. This insurance will help pay for care in hospitals, in skilled nursing homes, or in the home. And under a separate plan it will help meet the fees of the doctors.”  Thus was born the most successful and popular health insurance program in the U.S., Medicare. It was a time of remarkable affirmation of the role of government in offering protections to its citizens – civil rights, voting rights, Medicare and Medicaid, among others – all passed under the signature of President Johnson.

In the ensuing years, we have seen a diminishing role of government in protecting health care and the rise of entrepreneurship and for-profit medical care. Health care news is reported as business, and the majority of Americans are confused by the new business lexicon of health care – “copays, deductibles, networks, prior authorizations, EMRs, etc.”  Everyone agrees that the cost of health care is too high. It is the leading cause of personal bankruptcy – the “crime” of getting sick and being unable to pay your medical bills. And to add insult, the majority of those who go bankrupt have health insurance but have the misfortune of being “out of network” or “denied coverage” or unable to cover copays and deductibles.

The for-profit American Academic Health System bought Philadelphia’s Hahnemann University Hospital and St. Christopher’s Hospital for Children in 2018, keeping them afloat but extracting what profit it could.  In July, American filed for Chapter 11 bankruptcy. St. Christopher’s, a profitable entity, will be sold. Unprofitable Hahnemann appears to be more valuable for its location than as a safety-net hospital to its owners.  After 134 years, the hospital is shutting down, leaving a huge void in the medical care of city residents, particularly the poor.

According to a recent CNN report, as Hahnemann’s shutdown proceeds, another hospital in downtown Philadelphia, Thomas Jefferson University Hospital, is seeing as many as 290 emergency room patients a day, up from 175. Jefferson’s maternity ward, anticipating a delivery rate of 1,800 for the year, now expects to handle about 2,800 births. The hospital’s president told CNN most of these new patients are on Medicaid.

Government has failed here on several levels.  Unwisely, Hahnemann was never zoned as a hospital area, ensuring that any entrepreneur could buy the property, conveniently located near the Pennsylvania Convention Center, and convert it into yet another luxury condominium or hotel.  Medicare and especially Medicaid reimbursement are simply too low. Some say that this is proof that Medicare for All would bankrupt hospitals, but actually it would do the opposite – pay hospitals a guaranteed amount on a global budget and free hospitals from the multimillion dollar expense of hiring hundreds of billing personnel. It is more than likely that Hahnemann would still be operational if it had a guaranteed global budget payment system.

Philadelphia has become not only a destination for college graduates but also for suburban empty-nesters who are moving to Center City for its arts, culture, transportation and, wait for it . . . medical care.  We are getting older, and close proximity to medical care is a huge draw for wealthy retirees who would love to plant their dollars in our city. The current building boom downtown has left the city with plenty of condos but a dwindling number of hospitals.

Medicare’s 54th anniversary reminds us that government once saw its role of ensuring a safety net for its citizens as part of a series of rights:  civil, voting, health. Sadly, the government has deferred its role to the entrepreneurs who have taken over health care, leaving all Americans to fend for ourselves and without a net.  We need to protect those who protect us, and we must do that by prioritizing health care in our zoning, our reimbursements, our regulations and our laws.

Dr. Walter Tsou is a national board advisor to Physicians for a National Health Program; an adjunct professor of family and community health at the University of Pennsylvania; former Philadelphia Health Commissioner (2000-2002), and a past president of the American Public Health Association.

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