Becker's Hospital Review

17 CFO / FINANCE Philadelphia hospital's future in limbo as owner looks to sell By Ayla Ellison W est Reading, Pa.-based Tower Health is looking for a part- ner to buy the entire system, putting the future of St. Christopher's Hospital for Children at risk, according to The Philadelphia Inquirer. Tower Health and Drexel University acquired Philadelphia-based St. Christopher's Hospital for Children in December 2019 for $50 million. The 188-bed hospital was put up for sale after it and Philadelphia-based Hahnemann University Hospital filed for Chapter 11 bankruptcy in June 2019. Less than two years after the sale was completed, Tower, which manag- es St. Christopher's as part of the joint venture, is looking for a buyer as it faces financial losses, according to the report. Drexel University President John Fry is looking for ways to maintain St. Christopher's as a teaching location for Drexel College of Medicine's students. He resigned in April from Tower Health's board to avoid con- flicts of interest, according to the report. Philadelphia-based Temple University Health System may also run the hospital. It uses St. Christopher's as a teaching location. "Preserving St. Chris is important for Philadelphia, because it plays a vi- tal role in the city's healthcare network for children," Temple University Health System CEO Michael Young told the Inquirer. "We are currently in discussions to see whether it's possible for Temple to have a role in doing so." n Blessing CFO says new hospital in community will cut revenue, but Quincy Medical disagrees By Morgan Haefner T he CFO of Blessing Health System in Quincy, Ill., said the opening of a 25-bed hospital in the community will lead to revenue losses, according to a May 4 report in the Herald-Whig. Quincy Medical Group, which is proposing the hospital, disagrees, and said the project will improve care coordination and clin- ical outcomes in the area. In a letter to the Illinois Health Facilities and Services Review Board, Patrick Gerveler, CFO of Blessing Health, said Quincy Medical Group's proposed hospital would strip his facility of its sole community status. e status is designated by CMS for hospitals that are geographi- cally isolated. Losing the status would result in a yearly revenue loss of $6.9 million because of lower Medicare rates, Mr. Gerveler wrote in the letter. In addition to Mr. Gerveler's letter, representatives from Blessing and a management consulting firm working for the health system argued Quincy Medical Group's application for the hospital doesn't include pricing or data transparency, according to the Herald-Whig. However, supporters of the $61 million hospital said it would increase competition and economic development in the area, according to the report. In an op-ed authored by Todd Petty, MD, chair of the Quincy Medical Group board of directors, Dr. Petty wrote: "Since announc- ing plans for QMG Hospital — a state-of-the-art, 25 med-surg bed hospital designed to improve outcomes while reducing costs — we have received overwhelming support from patients, community leaders and employ- ers. We planned the new facility in response to input from area residents regarding hospital-based care, and we are humbled by the hundreds of patients who have told the certificate of need board they want and need this hospital." A study conducted by Guidehouse for Blessing found the health system's commercial rates were 157 percent of the median market for inpatient services and 150 percent of the median market for outpatient services, according to an April 22 report from the Herald-Whig. As of early May, the board has yet to approve the proposed hospital. n Mayo Clinic raises $500M as it looks toward growth By Ayla Ellison M ayo Clinic has sold $500 million in bonds to investors as the Rochester, Minn.-based health system prepares to invest heavily in capital projects over the next five years, the Post Bulletin reported March 31. Mayo Clinic has not designated the bond sale for a specific project, but the system noted it is planning large capital expenditures. Over the next five years, the system expects capital spending of $6.5 billion, according to the report. "The specific uses of the net bond proceeds have not been deter- mined, but debt financing is a routine element of Mayo Clinic's capital formation," a Mayo Clinic spokesperson told the Post Bulletin. "Debt fi- nancing is a routine element of Mayo Clinic's long-term financial plan- ning, and the current rate environment makes it an opportune time to issue bonds." The net benefit of the bond sale to Mayo Clinic will be $497.5 million after issuance costs are deducted, according to the report. n

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