News that for-profit Community Health Systems wants to sell three Northeast Pennsylvania hospitals to a newly formed nonprofit was generally greeted with cautious optimism last week.
Cautious may be the key word for many, including Melissa Sonday, a Registered Nurse at Moses Taylor Hospital's neonatal intensive care unit in Scranton.
"We don't know much about this company. You know, we're just finding everything out as it comes out," Sonday said of WoodBridge Healthcare, which has an agreement to purchase Moses Taylor, Regional Hospital of Scranton and Wilkes-Barre General Hospital, which operate under CHS' Commonwealth Health System.
"But we do have a lot of expectations and things that we really want them to focus on and do for our community," said Sonday, who is a member of the SEIU Healthcare union, which she said represents about 800 workers at Moses Taylor and Regional Hospital. The two hospitals merged in 2022, though they continue to operate in separate buildings.
Those expectations, Sonday said, include providing high quality care for patients, honoring union contracts, ensuring financial stability for the hospitals — and, perhaps most importantly, investing in the facilities' staff and infrastructure.
For a decade, Tennessee-based CHS was doing the exact opposite, Sonday said.
All three hospitals were under nonprofit ownership before being acquired by CHS in 2009 (Wilkes-Barre General) and 2011 (Moses Taylor and Regional Hospital).
"We have had so many services cut such as pulmonary, ENT (ear, nose and throat), hematology, oncology, radiology, orthopedics, just in our hospital, and the infrastructure and deterioration of the buildings is very evident," Sonday added. "They don't invest in the hospitals here."
In Luzerne County, union members shared similar concerns and a similar history.
“We want our hospital to get back to the way it was before CHS bought it," said Lori Schmidt RN (cardiac rehab), president of the PASNAP-affiliated Wyoming Valley Nurses at Wilkes-Barre General.
"It was a true community hospital that people chose to bring their families to. Our obstetrics abruptly closing last year disrupted the plans of new parents and caused loyal staff to be forced to seek employment elsewhere," Schmidt added. "It has been a revolving door of administration and executives. Our union has been the only constant, advocating for our patients’ care.”
For its part, CHS has typically said very little about the hospitals or their operation. Even its own release announcing the sale contained few details.
In a statement emailed the previous day — when asked about possible sale concerns that had been raised by U.S. Sen. Bob Casey — a spokesperson said the company was proud of its track record of "delivering safe, quality care in their communities."
But all three hospitals lost substantial amounts of money in fiscal year 2023, according to the Pennsylvania Health Care Cost Containment Council 2023 fiscal year report, and it was also clear CHS was looking for a way out.
"[We] have been working diligently with numerous state officials over the last year to identify a sustainable path forward for these hospitals," the statement added.
What are WoodBridge's plans?
The $120 million sale to Bucks County-based WoodBridge is scheduled to be complete in the fourth quarter this year, a release issued last week said.
Formally granted nonprofit status earlier this year, WoodBridge describes itself as "an organization dedicated to helping hospitals and health systems provide high-quality, patient-centered care and community support."
"Our goal is to achieve this by acquiring hospitals in urban and rural areas, providing capital and optimizing their operations and services to better position the hospitals and caregivers to serve their patients and their community," the company adds.
Joshua Nemzoff, chairman of the WoodBridge Board of Directors, said in a statement announcing the sale that "these hospitals were a catalyst for establishing WoodBridge."
WVIA requested an interview last week with Nemzoff to learn more about the group's origins and plans.
WoodBridge spokesperson Letitia Fecher said the group would be open to a follow-up discussion once the deal is closer to being finalized this fall.
"The WoodBridge team will be meeting with hospital leadership, physicians and staff to learn more and create the longer strategic plan, including initial capital investments," Fecher said.
"Right now, there is much to learn before they can give any specifics beyond what’s been shared already," Fecher added.
According to his website, Nemzoff's "primary area of expertise is the development and implementation of acquisition, divestiture and merger plans for hospitals and hospital systems."
He also was a founder and leader of New Hope-based StoneBridge Healthcare, a privately financed "hospital turnaround firm" which is separate from WoodBridge.
Nemzoff told the Philadelphia Inquirer on Tuesday that StoneBridge will have no role in managing the NEPA hospitals, adding that “this is a WoodBridge deal."
Website addresses FAQs
The group has launched a new website, woodbridgecaresnepa.org, which includes a Frequently Asked Questions page about the proposed sale. Among its key points:
Reinvesting in NEPA: "As a nonprofit, all profits will be reinvested to improve facilities, expand services and support community programs," the site states.
"This nonprofit status also will enable WoodBridge Healthcare to offer services to those in need, regardless of their financial situation, ensuring equitable and accessible healthcare for everyone."
"Being a nonprofit, tax-exempt organization means that our primary focus is the well-being of our patients and the community," the site adds.
What it means for patients: "Nothing changes for patients today. All patients can continue to see the same doctors and care providers they know and trust at all locations."
As well, the site says, the MyHealthHome patient portal, contact numbers locations and services currently offered are not expected to change.
What it means for employees: Again, nothing changes immediately, WoodBridge says.
"WoodBridge intends to hire all Commonwealth Health employees in good standing. Employees would retain their positions at the original date of service, and earned benefits would remain in place at the time the agreement is finalized," the site adds.
Existing collective bargaining agreements with SEIU and PASNAP will continue to be honored, the site states, adding: "WoodBridge Healthcare leadership has a history of strong relationships with major unions."
- Impact on insurance: "We do not anticipate changes to the insurance plans the system accepts as a result of this purchase. We are early in the process and as we learn more will share additional details," the site states.
- Name changes: It is too early to say whether name changes will occur, the site states.
'It probably will get better'
Barry Buckingham, Executive Director of the independent Pennsylvania Health Care Cost Containment Council (PHC4), and George Gugoff, the group's Manager of Financial Reporting, expressed optimism that the sale could be good for patients and the hospitals themselves.
They also reflected on the transition between nonprofit and for-profit more broadly.
"Originally, all hospitals were developed by their communities ... and were by definition, viewed as a charity or nonprofit kind of arrangement," Buckingham said.
"And then eventually, folks started to think they could make money on them in terms of the for-profit. But I think it goes back and forth," he said.
"I think that in any kind of business, not just healthcare, larger can become more complicated. And sometimes, focus can get lost on the goal of patient care when when profit rolls into it," Buckingham added.
"But that's not to say there aren't good for-profit hospitals," he said.
As Gugoff noted, making a profit has become more challenging for the industry as a whole since the COVID-19 pandemic and subsequent inflation drove up all costs, including labor costs.
He also sees trends suggesting those costs will begin to recede somewhat, "But CHS ... it looks like they're losing a lot of money."
The transition to nonprofit ownership could relieve some of the pressure created by profit incentives, he suggested.
Gugoff fully anticipates that WoodBridge will look at all financial considerations — revenue cycle, insurance claims, reimbursements, wage indexes and staffing.
"I can say that they're familiar with taking hospitals that are not doing well. And making them a little better. They do have a track record," Gugoff said of Nemzoff and StoneBridge, based on what he understands of their history prior to the creation of WoodBridge.
"But for the patient, the experience shouldn't change, and it probably will get better," Gugoff said.
