Hospital, Refinery Closures Rattle Philly Economy
The planned hospital closure came as the city got hit with the news that after the massive June 21 fire and explosion at its oil refinery in South Philadelphia, Philadelphia Energy Solutions notified the state Department of Labor its plans to shut down the facility.
PHILADELPHIA—The City of Philadelphia got a reprieve of sorts when the State Department of Health ordered the owner of Hahnemann University Hospital today to cease plans to shutter the 496-bed hospital here by September.
American Academic Health System of El Segundo, CA reportedly told its employees on Wednesday its intent to close this hospital this September. The hospital, which employs more than 2,000 workers, confirmed reports of the planned closure, according to published reports.
The planned hospital closure came as the city got hit with the news that after the massive June 21 fire and explosion at its oil refinery in South Philadelphia, Philadelphia Energy Solutions notified the state Department of Labor its plans to shut down the facility at 2144 Passynut Ave. on July 1, which will put 1,024 employees out of work.
In terms of the Hahnemann University Hospital closure, the state Department of Health ordered the ownership of Hahnemann University Hospital to cease and desist plans to close the hospital, including shutting down its emergency department in the next few days, until the department receives written notice that the hospital intends to close and submits a closure plan.
“Hahnemann University Hospital is vital to the community’s health care and its owners cannot stop treating patients with no plans in place for their continued care,” said Secretary of Health Dr. Rachel Levine. “There is a legal process in place to ensure that this difficult transition happens in a way that protects public health. Hahnemann must follow that process, including keeping its emergency department open.”
A hospital is required to give 90 days written notice to the department of its intent to close, and as part of that notification must submit a closure plan that addresses financial stability; changes in the governing body, administration and medical staff; staffing changes; transition plan; status of payments; policies and procedures and a communication plan, according to the Department of Health.
“We will continue to work with the hospital owners, employees and our partners in the City of Philadelphia to ensure that if this hospital has to close it does so responsibly and with minimum impact on residents.” Dr. Levine said.
In January 2018, American Academic Health System, LLC, acquired Hahnemann University Hospital, the teaching hospital for the Drexel University College of Medicine, and St. Christopher’s Hospital for Children, as well as its affiliated physician practices and other hospital-affiliated entities, from Tenet Healthcare Corporation. The deal was valued at $170 million, according to the Philadelphia Business Journal.
Since the purchase, American Academic Health has been attempting to turn around the finances of Hahnemann University Hospital.
Pennsylvania Gov. Tom Wolf praised the Department of Health’s action, which he said “was undertaken to ensure the people who rely on the emergency medicine and other services at Hahnemann University Hospital are not suddenly left without care, and its employees aren’t left without jobs. We have processes and procedures in place to assure these things don’t occur and this letter, in no uncertain terms, advises Hahnemann that it must follow those rules in the best interest of patients and employees.
He added that his administration has been working with the hospital’s leadership, particularly pertaining to delaying the hospital payments on the Philadelphia Hospital Assessment and the Statewide Hospital Assessment to provide them financial flexibility to avoid closure.
“However, a lack of response from hospital ownership did not provide the confidence that regulations were being adhered to and so the department took legal action so that the hospital makes no attempt or action toward closing and or eliminating services, particularly emergency department services, until the Department of Health has received notice and approved a closure plan,” the governor stated.
The governor also released a statement in connection with the oil refinery closure, characterizing the closure announcement as “devastating news for these workers and their families. These are skilled and hardworking people who helped to prevent the fire from doing more damage. They deserve to be treated with dignity and respect by a company that has profited from their labor. I expect the company to take care of these workers first before prioritizing their own further profits.”
He added that Department of Community and Economic Development Secretary Dennis Davin, the Governor’s Action Team and Department of Labor & Industry Secretary Jerry Oleksiak are working on a plan to address potential negative economic impacts for the Philadelphia region and to provide assistance to the workers affected by the refinery closure announcement.