Loss of independence
Two Scranton hospitals to join larger systems
The two remaining independent hospitals in Scranton, Pa., announced deals last week to join larger, more financially stable health systems. Community Health Systems, based in Franklin, Tenn., said it agreed to acquire the assets of Moses Taylor Health Care System, a two-hospital system that includes 213-bed Moses Taylor Hospital in Scranton, 25-bed Mid-Valley Hospital in Peckville and the Physicians Health Alliance in Dunmore.
Geisinger Health System, Danville, Pa., announced plans to merge with Community Medical Center, a 248-bed hospital in Scranton.
The deals are expected to bring in millions of dollars in capital investments and are likely to increase competition in what hospital executives say is a financially struggling healthcare market.
“All three hospitals have struggled (financially) in recent years,” Geisinger Chief Operating Officer Frank Trembulak said.
Geisinger plans to pump about $158.6 million into Community Medical Center over the next seven years, including $28 million pledged previously for an investment in its primary-care practice group in Lackawanna County.
CHS declined to provide terms of the deal with Moses Taylor Health Care System but said it had made a five-year, $60 million capital investment. CHS’ capital investment is similar to the one it made when the health system acquired three northeast Pennsylvania hospitals, including Regional Hospital of Scranton, from Catholic Health Partners this year.
The terms of that deal included a $150 million purchase price and an additional $68 mil- lion capital investment.
“Regional Hospital of Scranton and Moses Taylor Hospital are a good strategic fit for each other,” CHS spokesperson Tomi Galin said by e-mail. “We see a unique opportunity for these two hospitals—with complementary services and areas of clinical distinction—to form a more efficient and sustainable healthcare system.”
A Moses Taylor news release said the two hospitals would maintain separate campuses. However, Trembulak said, Geisinger predicts that Regional Hospital of Scranton and Moses Taylor Hospital will merge, which will reduce the number of hospitals in the Scranton market to two.
Competing in a Pennsylvania regional market is not new for Geisinger and CHS. The health systems own hospitals in Luzerne County. Community Health Systems acquired Wyoming Valley Health Care System in Wilkes-Barre in 2009, while Geisinger operates the Geisinger Wyoming Valley Medical Center in Wilkes-Barre.
The deal with Community Medical Center, Trembulak said, will provide Geisinger with a “springboard to the surrounding five or six counties.”