Meeting of November 29, 2017 – Chestnut Hill Hospital

Chestnut Hill Hospital has been a fixture in the local community for a long time. Five years ago it was taken over by CHS, a for-profit chain of hospitals, and Dr. John Cacciamani was hired as president and chief executive officer. Very recently the hospital was taken over by a new entity, Tower Health Systems, a non-profit system. Dr. Cacciamani addressed these changes.

He first reviewed the growth of the hospital, which aims to provide “the highest level of care close to home.” In addition to housing a high-quality internal staff, the hospital also has physical locations of area medical schools and hospitals – for example, Penn radiation oncology, Temple sports medicine, Jefferson neurology and neurosurgery. The hospital also maintains residency programs in internal medicine, family practice, and surgery.

With regard to ownership, Dr. Cacciamani explained that CHS was suffering under an intolerable debt load. Tower Health, which has taken over five of the former CHS hospitals, was formed by Reading Hospital in October 2017 as a group of area hospitals, four of them in distant Philadelphia suburbs plus Chestnut Hill. Except for Chestnut Hill, the other four hope to “lock in” their local market, meaning 60-65% of the local hospitalizations. This is obviously not pertinent to Chestnut Hill (less than 10% of local hospitalizations).

 

This new system, in association with the University of Pittsburgh Medical Center (UPMC), should provide significant economies of scale. Initially Independence Blue Cross fought this new integration by threatening to pull out of Chestnut Hill Hospital because it saw UPMC as a rival health insurer, but this crisis has passed. For the moment, UPMC is not entering the Philadelphia market.

The integration of these hospitals is ongoing, but the general public does not know what the outcome will be. Even some of the medical staff at Chestnut Hill have some fears about the future, and have predicted to Dr. Cacciamani that Chestnut Hill Hospital will be sold off from the system because its location makes it dissimilar to the other hospitals in the system. John’s response to this fear – nobody knows the future. For the moment, the transition from CHS to Tower has moved the hospital from a high-risk system to a low risk system.

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