Wilkes-Barre General Hospital's Board of Directors has concerns about the possible sale of their facility to Tenor Health Foundation.
They are asking Gov. Josh Shapiro's office and the region's legislative delegation to halt the sale of WBGH.
An internal memo circulated this week says Community Health Systems and Tenor Health signed a letter of intent to have CHS sell Wilkes-Barre General Hospital, Regional Hospital of Scranton and Moses Taylor Hospital in Scranton to Tenor.
For months, public discussions focused only on a possible sale of Regional and Moses Taylor.
Hospital board chair Justin Matus accused Community and sale advocates of including WBGH in the transaction "to sweeten the pot," because the Wilkes-Barre hospital's finances are stronger than Regional's and Moses Taylor's. (A copy of the full board statement appears at the bottom of this story.)
A spokesperson for Commonwealth Health System, which operates the local hospitals for Tennessee-based Community Health, declined to comment on the board statement.
Efforts to reach a spokesperson for the governor's office were not immediately successful.
Two state lawmakers urged patience as negotiations to finalize the deal continue, and questioned whether the board could veto a sale.
Rep. Bridget Kosierowski, D-Lackawanna County, said she understands the board’s concerns. She has concerns about Tenor’s financial viability, but pointed out Community Health and Tenor have only signed a letter of intent.
“They have many steps to make to get to a sales agreement,” Kosierowski said. “And Tenor has its own challenges and barriers to get to the finish line.”
In an email Friday, Tenor CEO Radha A. Savitala told WVIA News "we share the board’s commitment to keeping WGBH alive and vibrant."
Matus: WBGH would be subsidizing struggling Scranton hospitals
This week's announcement of a possible sale arrived after months of searching for a new buyer because a deal to sell all three hospitals to Woodbridge Healthcare, Inc. fell through last November. Since then, local foundations stepped in to financially support the struggling Scranton hospitals.
Negotiations after the failed sale originally included only the Scranton hospitals.
"While the newest contemplated transaction was originally to include only the Scranton assets, it became apparent that without the inclusion of Wilkes-Barre, there was not a deal that would keep services in both communities," the internal memo obtained by WVIA News says.
Matus doesn't believe services in Wilkes-Barre were threatened.
"First and foremost, let's be clear, Wilkes-Barre General Hospital is profitable," he said in an interview.
The three hospitals have mostly lost money in recent years, according to Pennsylvania Health Care Cost Containment Council reports, but WBGH is the strongest of the trio.
In fiscal 2023, expenses outpaced revenues by 24.1% at Moses Taylor; 9.5% at Regional and 15.7% at Wilkes-Barre General, according to the council's report for that year.
Regional and Moses Taylor now operate under one license. CHS consolidated their emergency rooms at Regional.
According to the council's recently released fiscal 2024 report, expenses outpaced revenues by 20.6% at the combined Regional Hospital of Scranton and by 6.19% at Wilkes-Barre General Hospital.
Matus and the board fear "our profits, our revenues, are going to subsidize these money-losing operations," he said of the Scranton hospitals.
What does Tenor offer?
A potential sale to Tenor "offers nothing in the near term nor the long term and may in fact, ultimately cause the demise of the hospital itself through the inevitable cannibalization of our resources in attempt to shore up other facilities and priorities of the parent entity," Matus wrote in the board statement.
"We are certain that there are many potential partners for WBGH better equipped to not only maintain but further improve our mission to serve this community," he wrote.
Kosierowski in June named Geisinger, The Wright Center and Tenor Health as the frontrunners in the months-long fight to save the Scranton hospitals from closing.
Tenor Health Foundation “was formed to identify, own, manage, and turn around financially challenged hospitals,” according to its website.
Tenor recently bought and reopened Sharon Medical Center in Mercer County, which closed in January after its former owners filed for bankruptcy.
Tenor's Savitala partially agreed with the board in the email to WVIA News.
“We’ve now had the opportunity to review the press release issued earlier today and agree that Wilkes-Barre General Hospital is staffed by dedicated physicians, nurses and health care professionals dedicated to keeping WBGH a place where caring and healing are the standard," she wrote.
"Tenor Health Foundation looks forward to working with Chairman Matus, his fellow board members, and the men and women who have made WBGH a center of excellence, as matters move forward,” Savitala added.
Matus questioned what the group would bring to the table that existing management doesn't already have, saying the firm — run by an attorney and a hospital administrator — "doesn't have a deep bench" of experience.
"We know how to run a hospital. They're not going to tell us anything we don't know," he said.
Reps. Kosierowski, Haddock weigh in
Commonwealth has invested more in the Wilkes-Barre hospital to make it more viable, but the Scranton hospitals offer essential services, too, Kosierowski said.
“So Regional in Scranton is no doubt financially in a desperate situation,” Kosierowski said. “We all understand that. But the main goal here, on behalf of us, the state - when we are involved in this - is always to access care and to protect our workforce.”
She pointed to the letter’s concern about maintaining care.
“We deliver 1,700 babies here in Scranton. (For) sick babies, we have a NICU (neo-natal intensive care unit) here. It's the only one in an 80-mile radius,” Kosierowski said. “So, when you talk about an 80-mile radius that includes Wilkes-Barre.”
Rep. Jim Haddock, D-Luzerne County, whose district includes parts of Luzerne and Lackawanna counties, said he always thought Wilkes-Barre General could be sold, but never heard from any board members about any concerns.
“I knew a year and a half (ago) that Wilkes Barre General could be for sale,” he said. “I don't know why the advisory board at Wilkes-Barre General wasn't aware of that fact.”
Commonwealth has shifted its business footprint to southern hospitals, and Pennsylvania doesn’t fit the footprint any longer, he said.
“The board in Wilkes-Barre should have been talking to the company that they were with, and they should have been very well aware that, yes, the hospital makes money, but CHS had it for sale,” Haddock said.
Pashinski surprised at WBGH's inclusion
But one of Haddock's colleagues also was caught off guard by news Wilkes-Barre General might be in the sale.
Rep. Eddie Day Pashinski, D-Luzerne County, said he was surprised, and he shares the hospital board’s concerns.
For months, Pashinski and others believed Community Health would keep Wilkes-Barre General and sell Regional Hospital in Scranton, whose campus includes the former Moses Taylor Hospital. He said that in December.
“It appeared in our conversations over the last several months that Wilkes-Barre General was in good financial shape, and that particular hospital system was not in any jeopardy,” Pashinski said. “It was the two hospital systems in Scranton that were in trouble ... So we're a bit taken aback on that, and we will now have our conversations.”
Pashinski said he isn’t necessarily opposed to the sale of all three hospitals but wants to ensure their future because they serve hundreds of thousands of people.
“I'm not going to fight the sale,” he said. “I'm going to fight along with my colleagues to make sure that we have a deal that's going to be good for the people of Wyoming Valley, for the people of northeastern PA. “
The region needs “the right medical services here to take care of all the folks that are in northeastern PA,” he said.
“We want to make sure that whoever's going to come in here, they're going to make sure that is a sustainable hospital that's going to provide the quality of care that is necessary and that we expect,” Pashinski said. “We're going to be there to make sure they follow the law, to make sure they provide the kind of health care that's necessary for Luzerne and Lackawanna County.”
Wilkes-Barre mayor seeks more details
Wilkes-Barre Mayor George Brown said he must learn more about Tenor Health before taking a position on a potential sale.
Brown said a sale could cost the city significant money in lost property taxes. Tenor Health is a non-profit and non-taxable. Community Health operates for profit and is taxable.
Wilkes-Barre General currently contributes an estimated $700,000 in taxes, Brown said.
Brown said he would ask Tenor for a payment in lieu of taxes, known as a PILOT.
When Woodbridge Healthcare sought to buy the hospitals, Brown said its officials told him they didn't think they could afford a PILOT.
The mayor hopes to meet with Commonwealth and Tenor officials soon to have a similar discussion.
Matus: Board will put patients over profit
Matus said the board will stand firm in its view that patient care should always be more important than profits.
"We love our friends up in Scranton, but we, the board, have to look out for Wilkes-Barre General first and foremost, that's our commitment," he said of the volunteer body.
"You know, we're not on the board of CHS, and we do not work for CHS," he added. "We don't have fiduciary responsibility. We are responsible for patient safety and quality."
Whether the company makes a profit overall "is never of our immediate concern. It's only about quality and that's our focus," Matus said.
