Home Analysis My take: ChristianaCare’s bold move

My take: ChristianaCare’s bold move

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My take: ChristianaCare’s bold move
Nevin
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Good afternoon,

ChristianaCare is not known for making game-changing moves.

Delaware’s largest hospital system and private employer has grown to 13,500 caregivers and $3.6 billion in revenue without making a big acquisition or building a costly acute care hospital in fast-growing Middletown (population 24,500).

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That cautious stance from the nonprofit system changed with Friday’s announcement of a letter of intent to acquire Delaware County-based Crozer Health from its for-profit owner.

Should the deal go through, ChristianaCare would add four hospitals and about 4,000 employees. In the coming weeks, ChristianaCare will go through the due diligence process to determine, among other things, the extent of Covid-19 damage to Crozier’s bottom line.

We do know that based on its most recent nonprofit filing with the Internal Revenue Service, ChristianaCare took a hit from the virus and accompanying restrictions on non-emergency services. Thanks to its conservative financial practices, ChristianaCare has a solid balance sheet.

Signs that ChristianaCare under physician CEO Janice Nevin was changing course could be seen a couple of years ago with the acquisition of financially strapped Union Hospital in Elkton, MD. It also moved more aggressively in providing care outside the hospital setting with an emphasis on underserved populations while signing on to a joint venture with an operator of urgent care centers

The change also came during a wave of consolidation in the hospital business with the massive University of Maryland health system snapping up hospitals on the upper and Eastern shores. A similar trend has been taking place in the Delaware Valley with the University of Pennsylvania’s hospital system taking over West Chester’s hospital with Inspira strengthening its hold on areas of south Jersey.

ChristianaCare is also shifting toward an outcomes-based model, rather than the traditional fee for service that leads to incomprehensible hospital bills and at times outrageous charges.

Nevin, the daughter of an Episcopal priest, is no stranger to Delaware County. She grew up in Claymont, a steel mill town that is also the boyhood home of President Joe Biden. Just across the line is Marcus Hook, a gritty refinery town that reflects Delaware County’s economic struggles.

“Delco,” as it is commonly called, became nationally known for its close-knit towns, Wawa coffee, and blue-collar toughness, all featured in the Emmy-winning HBO show Mare of Easttown. and before that the Oscar-winning movie Silver Linings Playbook

As the Philadelphia Inquirer noted in its story, there are skeptics of the deal, one of whom pointed to the financial troubles of Reading-based Tower Health. Tower Health recently closed two hospitals on the edge of ChristianaCare’s regional service area. The moves raised concerns on emergency care for a large population of elderly that includes DuPont managerial retirees.

It was also noted that Delaware County – despite having pockets of affluence that include the site of a ChristianaCare’s outpatient center in Concordville-Chadds Ford – comes with a large population of poorer residents covered by less lucrative reimbursements from Medicaid and Social Security.

The Inquirer story did note one big difference between Tower and Crozier comes with Tower attempting to tie together a large and economically diverse area extending from Reading to southern Chester County. By contrast, Crozer’s hospitals are within a compact area.

That leads to the question of whether ChristianaCare would have to make the painful decision to restructure Crozer and perhaps close a hospital. Under current for-profit ownership, Crozer made moves in that direction by closing maternity and hospice units while eliminating much of the executive staff. Crozer’s CEO recently resigned with a current exec taking his place.

In a brief interview on Friday, Nevin said a drawing card was Crozer’s large outpatient health system that fits into ChristianaCare’s focus on improving access to healthcare for underserved populations.

She concluded by taking note of ChristianaCare’s “For the Love of Health” mission and adding that love sometimes means making dificult

That could include walking away or going “all in” and working to improve health outcomes in Delco. – Doug Rainey, chief content officer.

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