Yet another hospital bankruptcy has led to an auction and a sale. This time it was St. Christopher’s Hospital for Children in Philadelphia, Pennsylvania. The 188-bed hospital is a healthcare outpost in north Philly and one of only two children’s hospitals in the city.
In 2018 it and Hahnemann University Hospital were sold by Tenet Healthcare (NYSE: THC) to California investment banker Joel Freedman, represented as American Academic Health Systems LLC (AAHS), for $170 million. Hahnemann’s financial troubles prompted American Academic to file for Chapter 11 bankruptcy protection on June 30 and led to that hospital’s closure in July 2019.
St. Christopher’s attracted a lot of attention, as Jefferson Health joined a consortium with Einstein Healthcare Network, Philadelphia College of Osteopathic Medicine and Temple University Health System to submit a letter of intent to AAHS to keep the hospital open. KPC Healthcare, a privately owned hospital company that acquired a few hospitals from the Promise Healthcare bankruptcy auction last February, also joined the process.
While Jefferson Health and Co. dropped out of the bidding on September 18, KPC reportedly stayed in until late into the night of Thursday, September 19. However, the partnership between Tower Health (formerly known as Reading Health System) and Drexel University won the auction with a $50 million bid.
Tower Health, based in West Reading outside the city, entered the Philadelphia market after its acquisition of five Community Health Systems (NYSE: CYH) hospitals in May 2017 for $418 million. The system signed a 20-year academic partnership with Drexel and the two are collaborating on a medical-school campus near Tower’s flagship hospital in Reading. Drexel’s medical school sends its students to St. Christopher’s for training, as it did with Hahnemann University Hospital.
Although the organizations will share ownership of St. Christopher’s, Tower Health will take the lead operationally.