In the two weeks since Joel Freedman, the investment banker who owns American Academic Health Systems, announced that he plans to close Hahnemann University Hospital, nurses and other frontline providers of patient care have made their voices heard. Their point has been simple: Hahnemann and St. Christopher’s Hospital for Children are community resources, not real estate commodities. They’re right.
Since before the Civil War, Hahnemann has been an integral part of the social fabric of Philadelphia, treating underserved populations and training generation after generation of health-care professionals. Two-thirds of the patients who visit the hospital are people of color, and the overwhelming majority are public payers or uninsured. Almost 3,000 people work at Hahnemann, making it one of the most important employers in the area. Shuttering it would result in an economic shock to the city unlike any in recent history.
A Hahnemann closure would also have a significant public health impact. The hospital’s emergency room sees more than 50,000 patients annually, many of them arriving with complicated conditions due to lack of access to a reliable primary care provider. If displaced, such a volume of challenging cases would place incredible stress on other Philadelphia hospitals, all of which are already clogged with ER wait times above the state and national averages. The quality of care across the city will suffer greatly. And at a time of devastating gun violence and opioid epidemics, these are matters of life and death.
Our already inadequate maternal health system would be affected as well. Hahnemann is one of only six places in Philadelphia where babies are delivered. Between 1997 and 2012, two-thirds of the city’s maternal units were closed, and infant mortality rates surged in the years that followed. We need to be investing in facilities dedicated to improving the health and welfare of mothers and babies, not further undermining them.
It’s important to understand how we got here. Hahnemann is a safety-net hospital, and safety-net hospitals don’t make much money. So why would an out-of-town investor who has never treated a patient buy it in the first place? Mr. Freedman’s bankruptcy filing offers a clue: As the nurses have pointed out, he appears to view Hahnemann as a real estate investment rather than as a hospital. By separating the health-care business from the real estate, Mr. Freedman has positioned himself to sell off the land for a fortune while allowing the hospital itself to wither away. He seems fine trading the lives of Hahnemann’s patients and the people who care for them for luxury condos or a hotel, so long as there’s a profit to collect along the way.
Mr. Freedman did not invent this destructive business practice. It’s common among predatory investors like Wall Street vulture funds that see everything as a financial commodity. The Hahnemann story is in fact not so different from what the Wall Street firms who bought the Philadelphia Energy Solutions refinery did in the years before the recent disaster – make a profit while deferring maintenance and letting the debt-loaded operations entity sink. In both cases, the community is paying the price.
This extractive business model does not belong in Philadelphia or anywhere else in the United States of America. The health and well-being of our people cannot be left to corporate lawyers doing the bidding of a single investor or a bankruptcy judge in Delaware.
For the short term, city, state, and federal officials must work with all affected stakeholders to find a solution that keeps Hahnemann’s doors open for good. For the long term, we must create a Medicare for All system that would guarantee health coverage to all people. Under that system, we are going to invest in health-care facilities that operate in underserved areas and we are going to end the culture of corporate greed that is denying health care to millions of people in the richest country on Earth.