University of Pennsylvania Health System plans Acquires financially strapped Doylestown Health in deal that will strengthen nonprofit health system’s Arriving in the northern suburbs of Philadelphia, officials said Thursday.
Doylestown Health, a 247-bed hospital in Bucks County, is the University of Pennsylvania’s seventh hospital. Reaching a final agreement could take several months, and then the deal must win regulatory approval.
Addition of Doylestown fills gap in Penn’s geographic coverage Make sure to get a referral to senior care in College Station.trade It also gives Penn a new platform to bring advanced care into the community, said Kevin Mahoney, CEO of Penn Health System.
“Patients want to come to Penn Medicine, but it’s not an easy place to get to,” Mahoney said, referring to Penn’s flagship hospital at the University of Pennsylvania.
If the preliminary deal closes, Doylestown would open a new front in Penn’s competition with Jefferson Medical Center, the health system with the largest hospital beds in the region. Jefferson Abington Hospital draws patients from the Doylestown area.If Jefferson had completed his The proposed acquisition of Lehigh Valley Health Network, just north of Doylestown, Pa., could give it a strong presence in the central Jefferson region.
Doylestown Hospital, which celebrated its 100th anniversary last year, has a long-standing focus on maintaining independence and localizing services.COVID-19 clearly demonstrates the fragility of nonprofit health systems Doylestown Health CEO Jim Brexler said that’s problematic financially.
“We need great organizations to be a part of this, and who better to be a part of than Penn Medicine,” he said.
Penn physicians already work closely with those in Doylestown, where Penn has maintained a radiation oncology treatment center since 2011, treating about 400 patients annually.
Doylestown had $418 million in revenue last year, compared with $10 billion for the University of Pennsylvania Health System. In addition to three hospitals in Philadelphia—Hospital of the University of Pennsylvania, Pennsylvania Hospital, and Presbyterian Medical Center—Pennsylvania also owns Princeton Medical Center in Plainsboro, New Jersey; Chester County Hospital in West Chester; and Lancaster General Hospital, Lancaster.
Doylestown Hospital’s Unusual History
In 1895, a group of women formed the Doylestown Village Improvement Association to promote the health and beauty of the town, according to a presentation on the organization’s history last May.
The organization was not always successful—an effort to remove spittoons from the town’s public spaces failed—but as is known, VIA opened what is now Doylestown Hospital in October 1923. The nonprofit VIA still owns the hospital.
A board of VIA members governed the hospital until 1960, when VIA hired the hospital’s first professional administrator.
When Richard Reiff was hired as the second person for the position, the hospital was at a crossroads, with the board needing to decide whether Doylestown was going to become a community hospital and triage center, sending complex cases to A. or whether to offer more advanced services, Brampton Hospital or Philadelphia Medical Center Reif said in May.
The board decided to provide more advanced services such as cardiac catheterization to diagnose and treat heart problems. Brexler, the third CEO in Doylestown’s history, said in May that Doylestown is the first hospital in Pennsylvania to offer cardiac catheterization but not traditional heart surgery. Hospital.
Doylestown’s current financial pressures
Doylestown’s tendency to spend money on programs and facilities that allow patients to receive care close to home has resulted in a relatively heavy debt load.Hospitals are in a fragile financial position when the COVID-19 pandemic leads to financial cancellations Elective services.
“The COVID experience has shown us how important we are to the community because we do everything for the community and we don’t back down,” Brexler said. “But it also sucks the financial support out of us and makes us see How vulnerable we are.”
A report last summer from Doylestown’s chief financial officer said the organization’s cash reserves fell by a third from the end of 2018 to last July, while expenses such as labor costs rose sharply. That leaves Doylestown with just 60 days of cash on hand, down from about 170 days in 2018.
In recent years, the system has not been profitable enough to meet the terms of its loan agreements and has had to lender.it still Brexler said credit ratings from Moody’s and Standard & Poor’s are low, but the financial situation is improving.
Payne wants to see better financial results from Doylestown before the deal closes. “We’ve seen improvements over the past few months and we think that trend will continue,” Mahoney said.
When discussing a potential deal with Penn, Brexler tried to convince VIA board members to think differently about the future.
“We can no longer be just fiercely independent. We must fiercely protect the mission we serve,” he told them. “How do you make sure that this mission that these ladies started 100 years ago actually exists.”