Holy Spirit bleeding cash, triggering talk of layoffs Geisinger Holy Spirit Hospital -

Central Pa. hospital bleeds money, triggering talk of a sale

Posted May 11, 2018   Geisinger Holy Spirit Hospital, Holy Spirit Hospital, Geisinger, Holy Spirit Hospital Camp Hill Pa, Dr. Ryu, Jaewon Ryu, Harvard, Walmart, 

File photo of Geisinger Holy Spirit Hospital near Camp Hill in Cumberland County. (PennLive archives)

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By David Wenner | dwenner@pennlive.com

Fierce competition among central Pennsylvania hospitals has Geisinger Holy Spirit in Cumberland County bleeding red ink.

In 2017, the hospital near Camp Hill had an operating margin of minus 6 percent, meaning it lost $6 for every $100 worth of medical care. Its malady seems long term: Both income and patient volume are down from a few years ago, with that drop coinciding with the opening of a competing hospital just five miles away.

Holy Spirit's downturn is all the more alarming since most hospitals are enjoying a financial golden age. That's due to more people having health insurance because of the Affordable Care Act, and the surge of baby-boomers getting things like heart bypasses and joint replacements. All of Holy Spirit's hospital neighbors -- or rather competitors in today's aggressive health care landscape -- are enjoying much better health.

UPMC Carlisle, known as Carlisle Regional Medical Center until last year, posted a 10.77 percent operating margin in 2017. That means it had $10.77 left over for every $100 it was paid for caring for patients. UPMC Pinnacle, centered just across the river in Harrisburg and owner of the recently-built hospital near Holy Spirit, had a 10 percent operating margin. Penn State Health Milton S. Hershey Medical Center had an 11 percent margin.

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The cause of Holy Spirit's condition seems obvious: the opening of UPMC Pinnacle West Shore in 2014. The newer hospital cost $120 million and has all private rooms and an emergency room built to handle 36,000 visits per year. Moreover, it has a prime location just off Interstate 81 and Route 944, providing easy access for vast sections of Cumberland and Perry counties and substantial populations to the east and north.

In 2013, the last full year before the opening of West Shore, Holy Spirit had a 62 percent occupancy rate, matching the state average, according to data from the Pennsylvania Department of Health. In 2016, the most recent year available, Holy Spirit had a 52 percent occupancy rate, more than ten percent less than the state average. Holy Spirit cared for 10,404 patients in 2016, down from 13,136 the year before West Shore opened.

The health department data lumps all the UPMC Pinnacle hospitals together, and doesn't break out the occupancy rate for West Shore. However, UPMC Pinnacle's overall occupancy rate was 69 percent in 2016, well above the state average.

Emergency room visits at Holy Spirit fell from nearly 47,000 in 2013 to 40,790 in 2016. Meanwhile, combined ER admissions at UPMC Pinnacle rose from 115,361 in 2013 to 141,184 in 2016.

As most people know, health care keeps getting more expensive and America's health care bill keeps growing. As a result, virtually all hospitals see their revenues rise from one year to the next.

But Holy Spirit's revenues have fallen, from $304 million in the fiscal year that ended shortly after the opening of West Shore, to $287 million in 2017.

"These losses are quite serious," said Stephen Foreman, an associate professor of economics and health administration at Robert Morris University. Still, he noted that, averaged over the past three years, Holy Spirit loss is only minus 0.57 percent, which he called "Not great but not a disaster."

David Sarcone, an associate professor at Dickinson College and a health care expert, agrees West Shore hospital has had a major negative impact on Holy Spirit, and one that will be hard to reverse. He points out that hospitals costs are largely fixed -- they need to be staffed at a certain level regardless of whether they are busy, for example.

The opening of PinnacleHealth West Shore Hospital in 2014 appears to have drained revenues from Geisinger Holy Spirit near Camp Hill. .Joe Hermitt, PennLive

"Once the volume of services drops below a financial break even, things can get very ugly very quickly from a financial perspective," he said.

Now, there's talk in Harrisburg-region health care circles that Geisinger is looking to unload Holy Spirit, and rumors of discussions with Penn State Health and others.

Geisinger Holy Spirit declined to answer specific questions about the revenue and volume drop offs, or whether Geisinger is looking to sell Holy Spirit.

Kyle Snyder, Geisinger Holy Spirit's chief administrative officer, said in a written statement, "With all the moves in the Harrisburg region, it is not surprising that there is speculation about what may be next for Geisinger Holy Spirit."

He also said "we talk regularly with other organizations to explore ways in which we can work together to better serve our patients and community." Also, Snyder said while the quality of care is good at Holy Spirit, "we must continue to focus on making improvements to our financial position."

Penn State Health declined to specifically address whether it has an interest in buying or joining with Geisinger Holy Spirit.  "Cumberland County remains an important focus," wrote spokesman Scott Gilbert, who also added "we are exploring a range of options to enhance patient access to Penn State Health Services and providers close to home."

It makes sense that Penn State Health, the parent of Penn State Hershey Medical Center, would be among those willing to talk to Geisinger Holy Spirit. It too is feeling pressure from UPMC Pinnacle, which last year bought Carlisle Regional Medical Center as well as three hospitals in York and Lancaster counties. That was right before Pinnacle merged with UPMC, Pennsylvania's largest health care system.

The moves gave the former PinnacleHealth scale and reach hospitals systems say has become necessary to their survival.

Penn State Health also needs more scale -- that's why it planned to merge with Pinnacle a few years ago, until government regulators objected. Since then, it's been in major growth mode, although much of its expansion has been concentrated in the Berks and Lancaster counties.

With a stronger foothold in Cumberland County, Penn State Health could use its reputation as an academic medical center and offerings, including a broad range of organ transplants, to draw more patients from Cumberland and Perry counties. In fact, the aging populations of Cumberland and Perry were a major factor in Pinnacle's decision to build West Shore Hospital even when, based on occupancy rates at Holy Spirit and Carlisle Regional, there was no glaring need for the hospital.

Further, the surge of Cumberland and Perry residents entering their Medicare years played a role in attracting Geisinger to Holy Spirit in the transaction that became final in late 2014. At the time Geisinger decided to acquire Holy Spirit, Penn State Hershey and Pinnacle had yet to announce their merger plans. UPMC was nowhere to be seen in the Harrisburg region.

Penn State Health, parent of Penn State Hershey Medical Center, wouldn't say whether it has any interest in acquiring or joining with Geisinger Holy Spirit Dan Gleiter | dgleiter@pennlive.com

Holy Spirit, a Catholic hospital that opened in 1963, has plenty of people who feel an attachment, especially in the immediate Camp Hill area. But it also has factors working against it that are hard to overcome. It's landlocked and much of the structure dates back to the original construction. It's also not ideally located, with people having to make their way through congested Camp Hill to reach it.

Those factors are likely a likely a turnoff for older people, especially given the ease of reaching West Shore Hospital via I-81 or Route 944, also known as Wertzville Road.

Holy Spirit's financial situation has changed dramatically since becoming part of Geisinger. Still another attraction for Geisinger was the prospect of using Holy Spirit and its network of doctors to grow its health insurance company, Geisinger Health Plan, in the Harrisburg region. But that hasn't materialized to any great extent, with the plan having about 582,000 members, up from 467,000 in late 2014.

Geisinger, true to its initial promises, has made improvements at Holy Spirit, including adding 100 doctors and spending $32 million to expand the ER and add a Level II trauma center. But the market has changed dramatically with the entry of an aggressive giant such as UPMC, and the urgency on the part of Penn State Health to expand.

Foreman, the Robert Morris University expert, believes it's possible for Geisinger Holy Spirit to turn the situation around. However, he said it would take major steps such as dropping money-losing services, mounting a multi-year campaign to convince patients it's the area's best hospital, and recruiting popular doctors from UPMC Pinnacle.

Asked about the plausibility of selling Holy Spirit, Foreman said, "Who would buy it? Who would pay money to compete with UPMC Pinnacle?"

Still, Foreman believes it's possible Penn State Health would have an interest, mainly because of the patient referrals that would come from owning the system. And while the Federal Trade Commission shot down a merger with Pinnacle, Foreman suggested the FTC might react differently if the hospital being acquired is viewed as "failing."

Dickinson College's Sarcone said, "It appears that [UPMC Pinnacle] through aggressive marketing and the investment in new facilities basically took market share away. Reestablishing patient preference revealed in physician referral patterns will be expensive and time consuming."

Sarcone doubts an aging hospital with a declining patient volume would attract many potential buyers. Still, he believes Penn State Health might be the exception. Holy Spirit has a heart center, an urgent care center, a network of doctors and an inpatient mental health unit. "Holy Spirit has valuable assets that would fit nicely with Hershey's needs ... that's something to think about," he said.

Whatever the future of Geisinger Holy Spirit, it could have significant consequences for health care consumers in central Pennsylvania. When Penn State Hershey and Pinnacle tried to merge, the government objected on grounds the merged entity could raise prices and reduce quality, with many consumers having no alternative.

The subsequent fallout seemed ideal, resulting in three major health systems, Geisinger, UPMC Pinnacle and Penn State Health, competing to be the top choice for Harrisburg region residents. That's an unusual level of competition for a region the size of the Harrisburg region. In that light, the loss or diminishment of a major player would surely be felt.

ISIS inside Labor Justice Energy State IRS DEA G4S Terrorists - The DHS Department of Homeland Security PAID Islamic Radical Jihadist Orlando Florida Massacre G4S Omar Mir Seddique Mateen - FBI Newspaper Security Guns Violence Gay Queer Blacks Jews Women Hillary Clinton Bill Clinton Barack Obama

The ISIS terrorist who committed the worst mass shooting in U.S. history worked for a security company contracted by the Department of Homeland Security (DHS) to protect federal facilities nationwide and transport illegal immigrants apprehended in the southern border region. Earlier this month Judicial Watch launched an investigation into the Florida-based security firm, G4S, after breaking a story  about illegal immigrants being quietly transported from the Mexican border to Phoenix and getting released without proper processing or court appearance documents.

G4S was contracted by DHS to drive the group of illegal aliens, classified as Other Than Mexican (OTM), from the Border Patrol’s Tucson Sector where they were in custody to a Phoenix bus station where they went their separate way. The OTMs were from Honduras, Colombia, El Salvador and Guatemala and Border Patrol officials told Judicial Watch they were in custody for a couple of days and ordered to call family members in the U.S. so they could purchase a bus ticket. Authorities didn’t bother checking the identity of the U.S. relatives or if they’re in the country legally, according to a Border Patrol official directly involved in the matter.

Judicial Watch was on the scene when several vanloads of OTMs arrived at the Phoenix Greyhound station on Buckeye Road just a few days ago. A photo accompanying our story shows one of the uniformed G4S guards that drove a vanload of OTMs from Tucson to Phoenix earlier this month. G4S claims to be the world’s leading security solutions group with operations in more than 100 countries and 610,000 employees. G4S has more than 50,000 employees in the U.S. and its domestic headquarters is in Jupiter, Florida. Judicial Watch has filed a number of public records requests to get more information involving the arrangement between G4S and the government, specifically the transport of illegal immigrants from the Mexican border to other parts of the country.

The investigation will expand to include documents and information pertinent to Omar Mir Seddique Mateen, an Afghan-American with two firearms licenses and a security officer license.

Early Sunday morning the veteran G4S security guard carried out the savage attack in an Orlando nightclub, killing 49 and injuring dozens of others. A multitude of media reports have confirmed that Mateen worked for G4S for nearly a decade even though he had been investigated by the Federal Bureau of Investigation (FBI) for terrorist ties. In one Florida newspaper report  the security company confirms that Mateen has been a security guard, with a firearms license, since September 10, 2007. A former co-worker told another Florida media outlet that Mateen regularly made threats of violence and that he was an angry, loud, profane man who used slurs for gay people, blacks, Jews and women.

In 2013 Mateen was investigated by the FBI for terrorism ties and his connections to an American named Moner Mohammad Abu-Salha who carried out a suicide bombing in Syria. Both men are from the Ft. Pierce area in Florida’s so-called “Treasure Coast.” The federal probe didn’t seem to impact Mateen’s work at G4S however, because there was no disruption in his employment, even after he openly praised ISIS.

This is astounding considering that the agency created after 9/11 to prevent another terrorist attack has a $234 million contract  with G4S to provide security services for a number of federal agencies, including the nation’s nuclear facilities and the departments of Labor, Justice, Energy, State as well as the Internal Revenue Service (IRS) and Drug Enforcement Administration (DEA). Ironically, the government’s contract with G4S stipulates that the company helps identify “suspected terrorists” trying to enter the U.S. and helps the feds with emergency responses to terror threats.

We will pursue this vigorously, as the Obama administration is too often inept, to put it charitably, in protecting Americans from Islamic terrorists.