UPDATE: Deal is reached to keep Easton Hospital open for at least a month
The owner of Easton Hospital on Friday gave Pennsylvania until midnight “to assume operations and responsibility” of the facility, claiming a state commitment of millions of dollars in emergency funding has fallen apart.
“If the Commonwealth has no interest in assuming all operating expenses and liabilities of Easton Hospital, Steward Health Care will proceed immediately on planning to close the facility,” Steward Health Care System LLC executive Dr. Michael Callum wrote in a letter to Gov. Tom Wolf.
The pending closure of the community hospital offering an emergency department, intensive care, laboratory and other services comes amid the worsening coronavirus pandemic that threatens unprecedented strain on the nation’s health care system.
Steward Health Care in a letter to Wolf dated March 22 said it needed to secure by Wednesday about $40 million in emergency funds or it will be forced to close by April 1.
Wolf on Thursday said his administration was doing everything possible to keep the Wilson Borough facility open.
According to Steward Health Care, Wolf's administration had agreed Wednesday to provide $8 million to keep Easton Hospital open for four weeks, with a goal of working month-to-month to secure a total of $24 million through June. Since then, Steward claims the administration clarified its position to make the initial "$8 million contingent on Steward keeping the facility 'open throughout the disaster declaration or at a minimum June 30, 2020.'"
“Since this is in direct contradiction to what was agreed to ... Steward Health Care is formally offering the Commonwealth of Pennsylvania the opportunity to assume operations and responsibility of Easton Hospital, effective at midnight this evening, March 27, 2020,” wrote Callum, who is president of Steward Medical Group.
Efforts to reach Wolf’s office for comment after lehighvalleylive.com obtained Steward Health Care’s letter were not immediately successful.
State Rep. Robert Freeman, whose district includes Wilson Borough, called the threatened closure “very irresponsible on their part.”
“I’m very disappointed in Steward Health Care,” said Freeman, D-Northampton. "They’re being very irresponsible in the face of a pandemic and they should be ashamed of themselves.
“I would say that they owe it to the community to continue to try to work through something with the governor’s office and not close down a facility that is absolutely vital at this time.”
Steward Health Care argues it has no choice, financially. The for-profit owner says it notified the Pennsylvania Department of Health in January the hospital would either be sold to St. Luke’s University Health Network by April 21 or close on or before that date, resulting in the loss of 700 jobs -- as well as a community resource.
“The hospital has been extremely distressed for months, and it lost $5 million from operations in February alone,” states a letter dated March 22 signed by Callum and Robert Wax, senior vice president and general counsel at St. Luke’s.
Since then, amid the coronavirus pandemic, Easton Hospital decided to postpone all elective surgeries to conserve personal protective equipment and blood supplies that will be needed to treat COVID-19 patients. That has cut operating revenue even more drastically.
“Like all hospitals making this difficult choice,” Callum and Wax continued, “Easton Hospital’s outpatient and inpatient volumes have dropped precipitously. The resulting losses have made the continued operation of Easton Hospital impossible. Meanwhile, given the financial realities facing hospitals, St. Luke’s is unable to complete the transaction in the original timeframe.”
A St. Luke’s representative on Friday afternoon said he was unaware of new developments in Easton Hospital’s push for emergency funding, and could not be reached subsequently for comment after the release of Steward Health Care’s latest letter to the governor.
Steward Health Care, based in Dallas, Texas, bought Easton Hospital in 2017 from Tennessee-based Community Health Systems (CHS). The hospital property itself is owned by Medical Properties Trust, which Steward leases.
Easton Hospital was a nonprofit until its acquisition by CHS in 2001. Celebrating its 125th anniversary in 2015, it opened with 11 beds in Easton in 1890 and moved in 1930 to Wilson Borough.
In an effort to remain open, Easton Hospital under Steward narrowed its areas of focus in 2019 by partnering with St. Luke’s University Health Network for certain care. That list of services shifted to St. Luke’s broadened in February with the closure of Easton’s obstetrics and gynecology unit.
This is a breaking news post and will be updated.
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Kurt Bresswein may be reached at kbresswein@lehighvalleylive.com. If there’s anything about this story that needs attention, please email him. Follow him on Twitter @KurtBresswein and Facebook. Find lehighvalleylive.com on Facebook.