The auction for Hahnemann University Hospital’s residency slots heated up Thursday night as area health systems competed with each other and out-of-market hospital operators, driving the bidding far higher than the starting bid of $7.5 million.
As a result, the bankruptcy hearing on the sale of Hahnemann University Hospital’s residency slots was postponed from Friday until Aug. 19, as the auction dragged on late into Thursday night.
At stake for the Philadelphia region is the labor of more than 550 doctors-in-training who were allotted to Hahnemann. In the last two weeks, those slots have been scattered to other hospitals in the region and farther afield as Hahnemann’s patient count dwindled to zero.
The auction, run by V. Scott Victor of SSG Advisors LLC, started at 10 a.m. Thursday in the Center City offices of Saul Ewing Arnstein & Lehr LLP, which is representing Hahnemann and St. Christopher’s Hospital for Children in the bankruptcy filed June 30. The starting bid was a $7.5 million offer from Tower Health.
Even as several players jockeyed for the highly sought after residency slots, federal regulators, at the Centers for Medicare and Medicaid Services, have strenuously objected to a deal aimed at acquiring only the residency slots. That could mean that Thursday’s auction — which at 9:30 p.m. looked set to stretch into Friday — could lead to no sale at all.
On Wednesday, Christiana Care Health System, Cooper University Health Care, and Main Line Health joined Einstein Healthcare Network, Jefferson Health, and Temple University Health System in a joint bid.
The closure of Hahnemann, which traces its roots to 1848, affects some of the city’s sickest and most vulnerable patients besides scattering the hundreds of medical residents. The 496-bed hospital employed more than 2,500 people.
The hospital’s current owner Joel Freedman, a California investment banker, bought Hahnemann and St. Chris from Tenet Healthcare Corp. early last year for $170 million. However, he was unable to operate it profitably as most of Hahnemann’s patients are poor and dependent on government insurance. In April, Freedman said that the hospital was losing $3 million to $5 million a month and would have to close without financial help from the state and others.