Temple University Health System’s formula for making Chestnut Hill Hospital financially sustainable is not complicated, Temple’s CEO Mike Young said Tuesday.
Eliminating Chestnut Hill’s operating losses — $20.6 million in the hospital’s last full year under Tower Health ownership — can happen by doing a better job of getting paid by insurers; eliminating the high corporate overhead costs imposed by their former owner, Tower Health; and attracting more patients, Young said.
Temple, Philadelphia College of Osteopathic Medicine, and Redeemer Health on Jan. 1 completed their $28 million acquisition of Chestnut Hill Hospital from Tower Health and celebrated the occasion with lunch for hospital employees Tuesday.
Temple owns 60% of the joint venture and will manage the hospital, which is licensed for 148 beds.
Chestnut Hill Hospital’s chief executive John Cacciamani said the last three years were very difficult for the hospital due to both COVID-19 and the financial turmoil at Tower, which in 2017 acquired Chestnut Hill and four other community hospitals for $423 million and almost immediately ran into financial trouble.
“We needed a large health system, one with power in the marketplace” to take over from Tower, Cacciamani said. Temple already had close ties to Chestnut Hill in cardiology, lung medicine, and critical care, he said. “We already know how we work together.”
Tower had previously tried to sell Chestnut Hill to Trinity Health Mid-Atlantic, but that preliminary deal fell apart in January 2022 when “Trinity determined that it could not identify enough synergies that would result in substantial benefits for patients and the community,” according to Tower’s petition to Orphans Court for approval of the sale to Temple.
Young, in an interview after Tuesday’s event, said there are plenty of ways Chestnut Hill’s inclusion in the Temple system will help patients.
Adding Chestnut Hill, he said, will ease some of the patient backlog at other Temple hospitals. The operating rooms at Temple University Hospital sometimes have a three-week wait for scheduled surgeries. “We can do it next week here at Chestnut Hill,” he said.
Temple also owns Jeanes Hospital, Episcopal Hospital, and Fox Chase Cancer Center.
Emergency department patients will also benefit from the partnership, Young said. If one of Chestnut Hill’s eight emergency department doctors is out, management has had to scramble to find a replacement. Temple University Hospital has 43 emergency department physicians, and one of them will be able to help out at Chestnut Hill, Young said.