JUNE 30, 2019 — THE DAY OF RECKONING. HOSPITAL TO CLOSE IN SEPTEMBER 2019.
A spokesperson for American Academic Health System LLC, has announced the closure of the 496-bed Hahnemann University Hospital in early September 2019 promising an orderly transition for patients.
As a consequence of the closure, an estimated 2,500 employees will lose their jobs.
Last-minute legal maneuvers, and a possible bankruptcy, is in the works.
According to Joel Freedman, founder and president of American Academic, “Our goal in acquiring the hospitals was to help them both flourish and provide world-class care. We relentlessly pursued numerous strategic options to keep Hahnemann in operation, and have been uncompromising in our commitment to our staff, patients, and community. We are saddened our efforts have not been successful, and we are faced with the heartbreaking reality that Hahnemann cannot continue to lose millions of dollars each month and remain in business.”
It is believed that the acquisition of the hospital was a financial engineering play by a former investment banker turned healthcare mogul.
Philadelphia-based Hahnemann University Hospital has announced that it plans lay off 175 employees, including nurses, support staff and managers as it faces numerous financial, operational, and reimbursement problems.
Joel Freeman, the executive nominally in charge of Hahnemann has been quoted in several publications.
"We are in a life-or-death situation here at Hahnemann.”
"We're not Tenet with endless cash. We're running out of money."
Freedman, an investment banker who is the Chairman and founder of El Segundo-based American Academic Health System, which acquired both Hahnemann and St. Christopher's Hospital for Children from Dallas, Texas-based Tenet Healthcare in January 2018 appears to have underestimated the severity of the problems facing the hospital or overestimating his company’s ability to resolve operational issues quickly.
Freedman is also the CEO of El Segundo-based Paladin Healthcare Capital which reportedly faced similar issues in January 2018 when the firm appears to have underestimated the problems with the EHR (Electronic Health Records) system at Petaluma Hospital. Gary Frazier, senior managing director for Paladin claimed that “Paladin was unaware of the information technology issue when it originally bid to take over the hospital.” <Source>
Unless the hospital receives immediate financial assistance from outside sources such as the government, insurance companies, or Drexel University with its long affiliation with the hospital, the hospital will be forced to downsize, sell to another operator, or close. In any event, the employees are at greater risk as the turnaround effort continues.
Change is coming. There will always be a tomorrow, no matter how much you may try to ignore it. There are no guarantees in life, or promises for a bright future. Just because something bad hasn't happened yet, doesn't mean it won't. It can happen to anyone, anytime, anywhere ... are you now wondering, Am I Next?