COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING COMMITTEE ON COMMERCE AND ECONOMIC DEVELOPMENT - - - - Room 696, City Hall Philadelphia, Pennsylvania Thursday, February 5, 2004 1:10 p.m. - - - - RESOLUTION 040046 - Resolution authorizing the Committee on Commerce and Economic Development to hold hearings to investigate the proposed closure of Medical College of Pennsylvania (MCP) by Tenet Healthcare... PRESENT: COUNCILMAN W. WILSON GOODE, Chair COUNCILMAN MICHAEL A. NUTTER, Vice Chair COUNCILWOMAN MARIAN TASCO COUNCILWOMAN DONNA REED MILLER COUNCILWOMAN BLONDELL REYNOLDS BROWN COUNCILMAN JUAN RAMOS REPRESENTATIVE KATHY MANDERINO REPRESETNATIVE JAMES ROEBUCK REPRESENTATIVE JEWELL WIILIAMS - - - - V A R A L L O Incorporated Litigation Support Services Eleven Penn Center 1835 Market Street, Suite 600 Philadelphia, Pennsylvania 19103 215.561.2220 215.567.2670 I N D E X RESOLUTION 040046 LOUIS AGRE, 21st Ward Democratic Leader.............................. RALPH WYNDER, 38th Ward Democratic Leader.............................. LINDA ROBINSON.......................... MARJORIE GREENFIELD, East Falls Community Council............................. JULIE CAMBURN, East Falls Business Association......................... 27 JOHN MILLER............................. 34 CATHERINE FIEDLER....................... 38 GEORGE BETHALA.......................... 43 CAROL FRITZ............................. 48 LEE RUSSO............................... 51 ANN DAVIS............................... 69 ROBERT TSOU, Committee to Defend Healthcare.......................... 79 PHILLIP SCHAENGOLD, Tenet............... 85 THOMAS LEONARD, ESQUIRE................. 97 3 02/05/04 - COMMERCE - RESOLUTION 040046
Good afternoon. Please take your seats. This is the public hearing of the Commerce and Economic Development Committee on Resolution 040046, continued from January 29th. My name is W. Wilson Goode, Jr. I'm Chair of the Committee. To my right is Councilman Michael Nutter, Vice Chair of the Committee and primary sponsor of the resolution. I'll ask at this time for the Clerk to please read the title of the resolution.
Resolution No. 040046, authorizing the Committee on Commerce and Economic Development to hold hearings to investigate the proposed closure of the Medical College of Pennsylvania by Tenet Healthcare Corporation and the devastating impact that such a closure would have on the patients and employees of MCP, the East Falls Community, and the City of Philadelphia; and further authorizing the Committee in furtherance of such investigation to issue subpoenas as may be necessary to compel the attendance of witnesses and the production of 4 02/05/04 - COMMERCE - RESOLUTION 040046 documents to the full extent authorized under Section 2-401 of the Home Rule Charter.
At this time, I'll ask Councilman Nutter to call his first panel of the witnesses.
Thank you, Mr. Chairman. There is a panel of three: Mr. Louis Agre, 21st Ward Democratic Leader; Mr. Ralph Wynder, 38 Ward Democratic Leader; and Ms. Linda Robinson. If you could all come to the table, please.
Good afternoon, Councilman Nutter. Good afternoon, Councilman Goode. My name is Louis Agre, I'm the Democratic Ward Leader in the 21st Ward, which encompasses Roxborough, Manayunk, Andorra, Wissahickon, and parts of Mount Airy. While I am from Roxborough and there's a hospital in Roxborough, we consider MCP our hospital, too. This is where we go when we're sick. I'm involved in a lot of athletic activities, and since I have two sons, I've been in this emergency room on more than one occasion. 5 02/05/04 - COMMERCE - RESOLUTION 040046 When you need medical care, they always tell you, go to a large, urban, teaching hospital like MCP. And when we need medical care, we need a trauma center, we need a teaching hospital, and we need the kind of hospital and kind of medical care that MCP has provided for 150 years to our neighborhood and to the whole Northwest. The loss of this hospital would be devastating, not only to the medical care, but to financial health of the Northwest. We have hundreds of people from our ward who work at that hospital, have worked at that hospital, doctors, nurses, environmental services people, CNAs, the whole gamut comes from our ward to work there every day. And the financial and healthcare repercussions from closing this hospital will be felt enormously in my ward. And I also have a personal reason for being here. My father's life was saved over a dozen times by that hospital. If it wasn't for the infectious disease department and the cardiology department, I don't know if 6 02/05/04 - COMMERCE - RESOLUTION 040046 my father would have seen his 75th birthday; in fact, I know he wouldn't. So it's not only the fact that my ward and my neighbors and my community will be impacted, my personal family will be impacted by this. And I thank you for your time.
Good afternoon, Councilman Nutter, Councilman Goode. And I'd also like to greet even those City, State, and Federal Legislators who are not in attendance but who are also responsible for these hearings. My name is Ralph Wynder. I'm the 38th Ward Leader. I'm also the Chairman of the Residents Coalition. And I am here because I live in the community where MCP is located. I live five blocks away from that hospital, and I worked in that hospital in the past. I worked there for years previous to 21 1996. It's a great deal of feelings that I 22 have concerning that hospital, both concerning 23 myself, my own welfare and the welfare of my 24 family and my neighbors. But what I would like to do this afternoon is to make a brief 7 02/05/04 - COMMERCE - RESOLUTION 040046 opening statement and then to allow another speaker, Mrs. Linda Robinson, to make a comment herself. As the Ward Leader of that community, we have brought together a number of people and entities, from the workers to the residents to the elected officials and many, many others who have shown concern for this hospital closing. And I'd like to commend this particular hearing, this particular body for showing the interest and the concern to hold these hearings, because I see these hearings as being very significant and very constructive to us solving some of these problems. I've been in hearings in the past and they've been a hoax, they've been a fraud. They just allow people to speak for the purpose of allowing expression and then they go on with business as usual. But I feel as though there's already been fruits that have been borne out of this hearing. The directive by the State Health Commission recently that is going to direct 8 02/05/04 - COMMERCE - RESOLUTION 040046 Tenet to make a closing -- to submit a closing policy or a closing statement, some type of directive that indicates that they're going to be closing and that has to be done 90 days previous to that closing, I think that directive has been already a very, very fruitful piece of information and directive that has come out of these hearings. Right now, I would just like to -- I'm very emotional about what has happened, not only because of the closing of the hospital, but also because of the lady who sits to my left. She's a good friend of mine. She's a member of that community, and she lost her son on Saturday, January the 24th. I just think that her story is reflective of a number of things that we are going to be facing if, in fact, MCP closes. So at this time, I would like to yield to Linda Robinson for her statement, and then I will continue after that.
Please identify yourself for the record, ma'am. 9 02/05/04 - COMMERCE - RESOLUTION 040046
My name is Linda Robinson. I live in the community. I live at 29th and Lehigh Avenue. I grew up in that community. I've been in that neighborhood since '58. My son, Gregory Gay, was shot four times the morning of January 24, 2004. He died of his gunshot wounds. They took my son to Temple University, where 29th and Lehigh, Women's Medical is five minutes away. He was able to tell police officers the two guys who did the crime to him. He also pointed in which direction they ran to. My son died at 3:20 at Temple University Hospital. My question is, why wasn't he taken to Women's Medical which is five minutes away as opposed to a hospital that's to 19 minutes away? I just would like to know. 20 He was fighting for his life and he 21 was sent to another hospital instead of being 22 there at Women's Medical, which it could have 23 been, you know, the reason being he could have 24 lived. You know, who knows if he would have 25 lived or died. You don't even know because he 10 02/05/04 - COMMERCE - RESOLUTION 040046 was never taken there to get quick attention to his wounds. You know what I'm saying? So I just would like to know why wasn't ever taken to Women's Medical in the first place? He was five minutes away from there.
We will try to get you an answer. I'm very sorry for your loss.
As we know, Tenet's administration primarily has been placing MCP on a divert status a great deal over the last seven weeks. And these diverts have been sending paramedics and ambulance services away from MCP to the closest, nearest hospital. And diverts should only be done when a hospital is overwhelmed by patients or understaffed. But at MCP, it seems to be a routine effort to place patients on divert so that they do not come to MCP so that they do not have to be admitted so that they do not continue the hospital operation of expanding and serving the community. Even under a divert status or policy, we know that a 11 02/05/04 - COMMERCE - RESOLUTION 040046 paramedic has the right to override it and to just take a patient to a hospital that is even on divert if he feels as though it's a life or death situation. So it appears that someone made an error in judgment. Clearly, this person should have been taken to MCP instead of two and a half miles away to another hospital. But at the same time, we also know that MCP has been placing ambulance drivers and paramedics -- and when I say MCP, I'm talking about the administration, Tenet, with this policy that they have been abusing -- have been placing ambulance drivers in a pressure situation to make a decision whether to take a person there and then be turned away to another hospital or to make a judgment that they just take this person to another hospital. Well, not only has this incident happened with Mr. Gregory Gay, but it also occurred a week later over at Abbottsford and Pulaski Street, which is, again, only about six or seven blocks away from MCP. And yet 12 02/05/04 - COMMERCE - RESOLUTION 040046 two people who were injured, shot, were taken to Temple, a further distance, further time. One of those people also died. I've heard rumors that it was an incident even previous to Mr. Gregory Gay's passing that this has also occurred. So we are not even sure how many documented cases have already occurred in our community where people have died because they were not taken to the closest hospital, MCP, and instead they were diverted to another hospital. I believe it's due to the pressure of Tenet placing this hospital on divert, they're placing paramedics and ambulance drivers under great pressure to make a judgment of whether a case is life or death. Even under extreme situations where it apparently is clear that it is a life or death situation, some ambulance driver's, out of some concern for making the wrong decision, are taking people to the further hospital. This young man was shot at around 2:40, 2:50, somewhere in that area of time. He identified who shot him. m. in the morning. I do believe that if he could have gotten to MCP five minutes sooner, I mean, who knows? Only God knows whether he could have been stabilized and saved. But the fact of the matter is that this is wrong. This is wrong for them to take this gentleman and others to a hospital which is two and a half miles away from where he was fatally wounded instead of taking him five minutes away to another hospital. This is the kind of treatment they are already presenting to our community. This is the type of treatment that will become permanent if this hospital is closed. This is the kind of treatment that, to me, shows the insensitivity of Tenet to just put this hospital on divert and begin the closure before it is officially closed. We feel as though the judge has already spoken to this situation. We feel as 14 02/05/04 - COMMERCE - RESOLUTION 040046 though this body needs to be clear about what is happening in this situation. We feel as though someone needs to do something before another life is lost in that community. This hospital serves a wide range of people. It serves East Falls, Roxborough, Germantown, North Philadelphia, Manayunk. It serves a great deal of communities, and yet they are continuing to treat our people as though they don't matter, as if they mean nothing.
They are treating us as if we are some type of cattle or dogs when they let people bleed in the streets then do not take them to the closest, instead put the pressure on ambulances and paramedic units to make that decision. And it is clear -- I think the evidence will be brought out at some point soon in court -- that these diverts are not necessary, that these diverts are being called when the hospital is not overcrowded and when it is not understaffed because it is a policy that someone in the administration of Tenet has put their staff members on and has put the fire department and paramedics units on. 15 02/05/04 - COMMERCE - RESOLUTION 040046 So we would like that to be looked at so that we can save a life in our community, so we can hopefully do something that keeps the hospital in our community that will continue to save lives. I think this draws out the comments that we have been making over and over again about this being a life and death matter. And I think people are not taking it as serious as it should be. Clearly, clearly, Tenet's refusal to even reach out and have discussions with other people before making their announcement to close, to me, indicates some kind of insensitivity because they had people -- who knows whether their losses are as great as they say. Only the documents that this hearing is requesting may bring out those facts. But I would think that -- we have seen that Tenet has bargained with the nurses in bad faith. They have given them a contract that they knew meant nothing and then waited for them to vote on it. They have not done 16 02/05/04 - COMMERCE - RESOLUTION 040046 what the judge has asked them to do when he told them not to do any more closing activities, and they began to dismantle computers, began to transfer people, doing things that violated it. I am not convinced that Tenet is in the shape that they say they are at until I see some kind of documented proof of that. And I would hope that this hearing brings out some of those matters and shows us the true proof. But if they do not want to be in our community, either for fiscal reasons or otherwise, then we are not trying to hold them there. We would just like them to have enough sensitivity for our community that they keep this hospital open long enough for us to find a new healthcare provider to serve the members of our community so that deaths and health issues would not affect our community as it has affected us thus far. And so in saying that, I would just basically, you know, like this particular body to make sure that Tenet provides the documents 17 02/05/04 - COMMERCE - RESOLUTION 040046 that you have asked them for. We would commend you for calling these hearings and for asking them to do these things. Tenet has indicated that you have been hard on them. Their lawyers or consultants have indicated that they feel your questioning as been little rough and that they would like for you not to treat them in that manner. Well, they should consider the manner that they are treating the people of our community. If they think that your questions were hard or brash or in any way too strong, they should consider the life of Gregory Gay and they should consider the other lives that are lost. It's nothing that can be any more extreme than the lives that they are causing to be lost and will be lost in our community. We are only asking them to consider the community, the people they profess to care for and serve and to change their character to the extent that they go along with what is being asked of them in terms of this 90-day closure plan and they go along with even an extension of that and stay in that position of treating 18 02/05/04 - COMMERCE - RESOLUTION 040046 people in our community until such time as we can find a buyer. Things are happening. Other people are discussing things now. We are hopeful, we are prayerful that there is going to be a healthcare provider that will take over MCP.
But if they close that hospital before that is done, we will have a mounting death rate in our community, very similar to the life of Gregory Gay. )
We are asking them not to allow our people to die because they are losing breath, losing blood, losing consciousness because they have to go to an institution that is two and a half miles away as opposed to five minutes away. That is what I would like this body to question them about, why it has to happen. As you look into their books, we would like for you to just 19 02/05/04 - COMMERCE - RESOLUTION 040046 understand -- help them to understand that they do not have to be placing that hospital on divert every other four hours, every other six hours or whatever it might be because they do not want emergency cases coming in there they will be forced to admit to their hospital when they, in fact, do not want to admit anyone. So we'd like to get to the bottom of this. And again, I think Tenet has an opportunity right now, they have an opportunity to show a different type of character. Five hospitals remain in this City. I think they need to consider the way that they are looking, that they have lost credibility and they are continuing to lose respect and they have an opportunity right now to regain some of the that credibility, to regain some of that respect if they do the right thing and begin to consider the people of that community. Keep that hospital open until we can find a healthcare provider. I'd like to thank you for allowing me to say this. 20 02/05/04 - COMMERCE - RESOLUTION 040046 (Applause.)
If I may, Mr. Chairman. I'd like to, first of all, echo Ralph's remarks. I'd also like say that is the difference between a hospital running well and a hospital not running well. A hospital runs well, a parent is saved; a hospital that's trying to save money, a child is lost. And we can't have that in our City. Thank you. (Applause.)
Thank you for your testimony. We have been joined by Councilwoman Donna Reed Miller and Councilwoman Marian Tasco. We are also joined by Representatives James Roebuck and Cathy Manderino as well as representatives from Senator Hughes and Senator Tartaglione's office. I believe Senator Hughes is also going to join us later. At this time, I ask Councilman Nutter if he has any questions for this panel?
Thank you, Mr. Chairman. No questions. I deeply appreciate the testimony. 21 02/05/04 - COMMERCE - RESOLUTION 040046 And, again, Ms. Robinson, words can't express our true sympathy to you in this personal tragic situation. We will, though, do our best to try to get answers to the questions that you have asked because they deserve an answer. God bless you.
Thank you. Any questions from Members of the Committee? (No response.)
Any questions from State Representatives? (No response.)
Thank you, Mr. Chairman. Marjorie Greenfield and Julie Camburn. Please identify yourself for the record.
Marjorie Greenfield, I'm a resident of East Falls and President of the East Falls Community Council. 22 02/05/04 - COMMERCE - RESOLUTION 040046 I thank you for the opportunity to testify here today. I appear here as a concerned East Falls resident as well as in my capacity as President of East Falls Community Council. East Falls Community Council is a neighborhood organization of East Falls residents, and our mission is the improvement of living conditions in East Falls for all of our residents. I think it's pretty clear from all the testimony which has already come that the closing of MCP will be directly contrary to our mission. East Falls is a diverse community with approximately 6,000 residents. Some of us are third generation Fallsers and others are late arrivals such as myself. I've only lived there for about years. 19 We live in two public housing 20 developments, single-family, twin, and row homes and in apartments of all types. We are unemployed and employed, teachers, hospital workers, City employees, college and medical students, homemakers, doctors, lawyers, judges, our Governor, State and Federal 23 02/05/04 - COMMERCE - RESOLUTION 040046 Legislators, and just about any other educational, economically situated person which you might imagine. In the last few years, the housing market in East Falls has exploded and our commercial district is on the rebound as a result of a lot of hard work by our development corporation and many volunteers. We have several major new rental housing projects underway and with more on the drawing boards. What will the closing of MCP Hospital mean to our community? As you know by now, closing the hospital would mean the direct loss of a thousand jobs. That cold statistic translates to a hard reality for us. Many of the people who hold those jobs are our neighbors in East Falls. Many own homes here, others rent. MCP employees and patrons patronize our businesses from the drug store to the dry cleaning, pet food store, the restaurants, pizzerias, and delis. Losing a thousand jobs at MCP means lost business and a reduced demand for 24 02/05/04 - COMMERCE - RESOLUTION 040046 housing, both sales and rental in East Falls. Losing the jobs will tear at the fabric of our community. Many of the employees have spent their whole lives working at MCP. Many will have a hard time finding employment elsewhere and many will have to leave our community. Residents, many elderly, will have to travel a great distance for care. And I want to tell you just one story which is about a client of mine, though I've heard others from people who have to find a new place for dialysis and so on. But this woman recently broke her wrist. She has a car, but she's been told for rehab she's now going to have to go to Moss at Einstein. She cannot afford to pay the $5 it will cost her to park at Einstein, so she will go there by public transportation. How long will that take you? And it is it really necessary? Our residents also in theory could go to Chestnut Hill Hospital, and Chestnut Hill Hospital is a good 15 or 20 minutes away by car. I don't know how you'd get there by public transit. There are only two ways to 25 02/05/04 - COMMERCE - RESOLUTION 040046 cross the barrier posed by Fairmount Park. Chestnut Hill Hospital describes itself as a community-based health system offering exceptional care of neighborhoods of Northwestern Philadelphia and Eastern Montgomery County, but I don't think they mean East Falls, Allegheny, North Philadelphia, Manayunk, and Roxborough. Chestnut Hill Hospital is simply not a substitute. It doesn't have a trauma center. It's not easily accessible or focused on serving us. Where else could we go? Temple University Hospital is, by car, 10, or more 15 minutes away. And according the hospital's web site, it is the busiest Level 1 regional trauma center in Philadelphia. Would that be your first choice if you had to go for emergency care? It certainly wouldn't be mine.
And we heard last time that people have waited 10 or 11 hours for care in the ER there. If you need to go by SEPTA, I don't know how long it would take to get there. We could go to Hahnemann in Center City. You're faced again with the same longer 02/05/04 - COMMERCE - RESOLUTION 040046 car trip. If traffic is bad, there's no 3 telling how long it would take. And by public transit, it's even worse. Jefferson Hospital, deeper in Center City is the same story. So what does this mean in people terms? It would mean, as we've heard, continuing loss of life for victims of heart attacks, crime, automobile accidents, and other life-threatening and life-altering events. It would mean defaults on mortgages, uprooting of families, many of whom have lived in our community for generations; uprooting of children from their neighborhoods and their schools. Tenet tells us it's losing money. Has anyone seen the raw numbers yet? What chooses has Tenet made over the last few years to achieve that wonderful result? They've closed many important departments, specialties that many of us need. Tenet bemoans the loss of insured patients. It says that most of the people in East Falls, or at least two undefined and unnamed areas which they haven't 27 02/05/04 - COMMERCE - RESOLUTION 040046 really told us which ones, don't use them. Well, what did they expect when they closed so many important departments in the hospital? Did they think we would come there any way? Tenet has effectively discouraged those who have a choice from choosing MCP. I chose MCP for the birth of my children and MCP doctors for much of their care. That couldn't happen today. It wouldn't happen today. The hospital has been decimated. I thank you for the opportunity to appear before you today. )
Good afternoon. My name is Julie Camburn, a lifetime resident of Philadelphia with 29 years in East Falls. I'm President of the East Falls Business Association, an organization of 65 micro to small-sized businesses and three mid to large-sized ones. Tenet is one of them. My own small business is a 23-year-old graphic 28 02/05/04 - COMMERCE - RESOLUTION 040046 design firm which also publishes our community paper, The Fallser. MCP has been on the front page of our newspaper for the last several months due to this closing, and they will continue to take front page space until things are resolved to the good of the community. In addition to this, I sit on the Board of East Falls Development Corporation as a representative of the Business Association. In compelling testimony, it was really heart wrenching and beautifully given last week by Association to Save MCP Hospital's Ginny Holzworth, an intensive care nurse. You heard her plea to preserve basic human rights. "The right to be cared for, the right to be cured," were her exact words. You also heard from Dr. Richard Wagner, head of the ER who noted that MCP serves a community with the highest percentage of elderly in the City for whom there are few, if any, alternatives for medical care. He outlined the hospital's rich history of service, both to the community and the City of 29 02/05/04 - COMMERCE - RESOLUTION 040046 Philadelphia. You will hear today from many people with personal stories, such as Ms. Robinson's, related to the hospital, its services or lack thereof, and its employees. As Meg just noted in her commentary, there are many businesses which interact with the hospital, providing services and products for both the operation of the institution and the needs of its employees. In a neighborhood working from the grass roots to create economic development opportunities, the hospital was a source for employment opportunities for consumers and for partners and programs related to education and cultural enrichment, and not only in East Falls, but in Germantown, Roxborough, North Philadelphia, and other communities as well. Its value, however, goes far beyond the neighborhood. Loss of Tenet hospitals and MCP is neither the latest nor the last of Tenet's chopping block. It also means loss of leases for small apartments and houses in the surrounding community as well as Center City 30 02/05/04 - COMMERCE - RESOLUTION 040046 high-rises. Closing institutions eliminates jobs, not only at that institution, but at businesses which both service and are serviced by it. Think beyond East Falls and its eateries and service business. How many jobs will be eliminated in administrative services at 1500 Market Street? How many outsourced contracts will not be renewed? And as physicians scramble to relocate -- and by now, those of us who use physician services at MCP have received the same letter Councilman -- was it Councilman Kenney last week who showed us a letter from Drexel?
Where will their employees be going? The impact on other hospitals of the closing of MCP'S trauma and emergency services, both in Philadelphia and its suburbs, is nearing catastrophic. At the end of December, I was with my 93-year-old mother at Jeanes Hospital in their ER for 11 hours. They were convinced they would not have to hospitalize her. They 31 02/05/04 - COMMERCE - RESOLUTION 040046 sent her home. I took her home in an ambulance. On January 5th, she went back to the hospital. This time her own attending physician scrambled in, found that she had bronchitis and, therefore, could be admitted. She was admitted for days. It's traumatic. 8 This is not only MCP; it's the surrounding 9 community. 10 And speaking of catastrophes, remember Dr. Wagner's mention of MCP's decontamination unit? It is the only site immediately available in case of bioterrorism. No need to set up tents on the parking lot as was done at Hahnemann when the Republican Convention was in Philadelphia several years ago. It is fully equipped and ready to open and the only site between New York and Washington. Has Secretary Ridge weighed in on what the closing of this institution will mean when the orange alert turns red? Does he even know? Any of us could go on at length at what the loss of a medical facility with an 32 02/05/04 - COMMERCE - RESOLUTION 040046 outstanding history means. Let's take a peek at the causes for its demise. These go beyond Tenet and Allegheny, both companies knowing full well what they were buying into. MCP Hospital is defined as a community hospital. Its community goes beyond the two square miles of East Falls. It's North Philadelphia, it's Germantown, it's Roxborough, and it's also the Schuylkill Expressway. The hospital's owners bemoan the need to serve so many under and uninsured. They bemoan the indigent community which uses its ER as a primary care facility. What have they done to address these problems? Nothing but whine. They found money to buy a robotic arm and equip a state-of-the-art neurosurgery facility, but they forgot to address their biggest problems. And so has our government. Even now, Governor Rendell and other politicals are scrambling to make deals. As these negotiations proceed, however, don't throw the baby out with the bath water. Keep the hospital open, fully resourced, and 33 02/05/04 - COMMERCE - RESOLUTION 040046 include the community in the deal. After all, we live here, we work here, you need us to continue to do so. Our tax dollars keep you in business. (Applause.)
Thank you for your testimony. Let me note for the record we've been joined by Councilman Juan Ramos and Councilwoman Blondell Reynolds Brown, both members of the Committee. At this time, I'll ask Councilman Nutter if he has any questions for this panel?
Are there any questions from Members of the Committee? State representatives? (No response.)
John Miller, Catherine Fieldler, and George Bethala. You can come up to the witness table. Please identify yourselves for the 34 02/05/04 - COMMERCE - RESOLUTION 040046 record and proceed with your testimony. Thank you.
My name is George V. Bethala. I'm a retired employee of the Commonwealth of Pennsylvania, Pennsylvana Human Relations Commission. I reside at Melrose Park. I'm a patient.
My name is Kathleen Fiedler. I'm a long-time community resident, fourth generation East Falls person and a long-time employee of MCP, now with Drexel University College of Medicine.
Hello. I also own a home in the East Falls section of Philadelphia. I'm a resident of East Falls for over 10 years. The closing of the Medical College of Pennsylvania is threatening both the well-being of my future healthcare as well the stability of the single largest financial investment I ever made by purchasing a 35 02/05/04 - COMMERCE - RESOLUTION 040046 property in the East Falls section of Philadelphia. To make a sound property investment, I took into consideration everything various neighborhoods had to offer. At the time, East Falls offered the diversity of housing, close proximity to the City and various highways, a good prep school, a good college, last and very reassuring, the teaching hospital, Medical College of Pennsylvania. That's been a stable part of the neighborhood for over a hundred years. This is now all threatened by Tenet's decision to close MCP as one of many hospitals to use in some manner as to create a better bottom line for themselves. This is all well and good when people's lives and livelihoods are not put at stake. But for every calculation that Tenet makes to better that dollar bottom line of theirs, another calculation of lesser amounts of healthcare and diminishing property values seems to be missing for those of us that are residents of East Falls. 36 02/05/04 - COMMERCE - RESOLUTION 040046 In April of 2002, at age 36, the proximity of the Medical College of Pennsylvania, with their state-of-the-art neurosurgical staff and emergency room, saved my life. I have been consequently diagnosed with an inoperable cancerous brain tumor. I have been through cranial biopsy, cranial radiation, and up to date still on chemotherapy for my condition. I am no longer allowed to drive due to a seizure condition brought on by the brain tumor. As I said previously, the house I purchased in East Falls is within walking distance of MCP at which I have biweekly blood counts, occasional MRIs to monitor the cancer, and EEGs to monitor my seizure condition. So not only will Tenet be taking away the healthcare that is essential to my survival, but also desecrating the value of my home which is the only investment I have to leave my family. Because my condition is fatal, I have no longer any time to take a loss on a property and start over again. Isn't it time we give Philadelphians 37 02/05/04 - COMMERCE - RESOLUTION 040046 a good reason to stay in Philadelphia rather than to flee Philadelphia? In closing, I would like to spread my contempt onto all of the dealmakers who must have known something about this travesty long before it started. I would also like to know why a buyer cannot be found for this hospital. If it was mismanagement or lack of advertising which caused MCP to fail, then Tenet should be held solely responsible. However, if MCP is in need City, State, or federal funding to keep operating, why are these other channels of funding not being fought for as well? I can't give a detailed plan on how to make MCP profitable, but I can see very clearly that if Philadelphia continues to turn a blind eye to the closure of its hospitals, we might as well just close up the fire departments and the police stations as well. It's common knowledge to teenagers and even some preteens that when constructing a City, being they play a game called Sim City, they know the four essential needs of a 38 02/05/04 - COMMERCE - RESOLUTION 040046 City are police departments, fire departments, hospitals and taxes. (Applause.)
Medical College of Pennsylvania is essential to the East Falls neighborhood as well as its bordering neighborhoods. As stated in the previous hearing a week ago, closing the hospital will only cause those who cannot pay to place that burden on the next closest hospital. Are we going to close that one too? Is the City of Philadelphia going to allow this domino effect to continue? How many hospitals can we lose before we start seeing people die because the emergency rooms are too full? Well, I heard today I guess that's already happening, but I hope none of us ever have to find that out. Thank you. (Applause.)
Mr. Chairman, as a fourth generation life-long resident of East Falls and a former employee at MCP, now working for Drexel University College of 39 02/05/04 - COMMERCE - RESOLUTION 040046 Medicine, I am here today to express my concern over the closing of our neighborhood hospital. My dad was born at Women's Medical College in 1934. He was also treated there by doctors and nurses in the oncology unit in 1995 until he died in 1996. My children were born there in 1979 and 1983 and were seen into their teens by the late pediatrician Dr. Phyllis Marciano, Women's Medical College, Class of 1960. "Dr. Marc" was a godsend to so many mothers in East Falls. She taught us all so much, both as a physician and as a mother. Her patients, or her kids as she called them, were always made to feel special. At one point, for almost years, 18 four out of five members in my immediate 19 family were employed at MCP. This scenario is 20 repeated in numerous households in East Falls and the surrounding community. The financial impact the closing will have on the community could be devastating both to growing families and those that are getting ready to retire. So many elderly patients depend on their 40 02/05/04 - COMMERCE - RESOLUTION 040046 various doctors at MCP. They have longstanding relationships with the doctors, nurses, and staff there. They know that the secretaries will try to schedule their appointments so they can do everything in one trip. Many of these elderly patients see three or more doctors at MCP. It was always a family atmosphere around the hospital, professionals working side by side with secretaries, technicians, students, residents, orderlies, engineers, cafeteria staff, volunteers, and many others to offer care and comfort to the sick. I have to admit I have a personal agenda for coming here today. In November of 2002, my strong, healthy 46-year-old husband Ray suffered a cerebral aneurysm. Time was of the essence. Luckily, we live around the corner from MCP. Ray was taken by ambulance to the trauma center at MCP where we were shown to the family room and told that his prognosis was very grim. After a very long surgery, Ray was taken to the intensive care unit where he spent two months. The nurses 41 02/05/04 - COMMERCE - RESOLUTION 040046 and doctors in the ICU gave Ray compassion, excellent care, but most of all they gave us hope. Ray couldn't talk or move his right side. He was fed through a tube. The nurses turned him continually and were diligent about avoiding skin breakdown. They kept him stimulated constantly by talking to him about his dogs and his kids. They sang Christmas songs to him and assured me every night that they would call me if they needed me. Now almost months after that 14 aneurysm, Ray is home and he is progressing 15 every day. He's able to move all of his extremities and he's talking again and eating meals by mouth. His survival is a true miracle. Myself and my family attribute it to the care that he received at MCP. I've been told by the doctors that Ray's brain injury will be an ongoing serious health issue for him. I think we can all agree the continuity of care is of the utmost importance to the health and well-being of all patients, but especially those with chronic conditions. 42 02/05/04 - COMMERCE - RESOLUTION 040046 If my husband's aneurysm had occurred while the trauma center was on divert or while the ER was closed, the fire rescue would have driven past MCP's emergency room to Temple Hospital. 9 miles away from my house. Ray may not have survived. This past December, Ray had a seizure. He was rushed to MCP's ER by fire rescue. Thankfully, the ER was not closed. The elderly patient in the next bed was crying because she was being transferred to Hahnemann. Thankfully, Ray's medication was adjusted and he was released that evening. The closing of MCP by Tenet Healthcare will have a negative impact on the lives and livelihood of so many in this community on so many levels.
Tenet has shown us that they have little regard for human life. They have come to Philadelphia, a medical Mecca, to increase their revenues, not to heal. They have shown blatant disregard for the laws of this City and this Commonwealth. 43 02/05/04 - COMMERCE - RESOLUTION 040046 I am insulted by Mr. Schaengold's testimony here in City Council last week. It was obvious to me and people across this City that Tenet did not take these proceedings seriously. The way in which Tenet has practiced business throughout this country indicates their true mission: To make as much money as possible. The history of the Women's Medical College through all of its changes is a vital part of the history of the City of Philadelphia. The people of this community for generations have been born, worked, and have even died at MCP. I'm confident that the government and the citizens of this City will see to it that MCP continues to heal patients for another 153 years, because we are survivors. Let the healing begin, not on Tenet's watch. Thank you for your time. )
Good afternoon, honorable members of the City of Pennsylvania, City Council of Pennsylvania, Chairman, other 44 02/05/04 - COMMERCE - RESOLUTION 040046 members, ladies and gentlemen. My name is George V. Bethala, residing at 7405 Richards Road, Melrose Park, Pennsylvania 19027. I'm a retired employee of the Commonwealth of Pennsylvania, Pennsylvania Human Relations Commission. I retired after serving the Commonwealth for years and 6 months. 9 I was a patient at Temple Hospital 10 from 1980 through 1995. I had an open-heart 11 surgery at Temple Hospital in 1980. In March 12 of 1995, I came to know about the quality of 13 services, efficient patient care rendered at 14 the MCP Hospital, Philadelphia and hence, I 15 transferred to MCP Hospital. 16 From 1995 'til date, I had about 17 nine emergency admissions to MCP for cardiac 18 care, catheterization, angioplasty, including 19 a second open-heart surgery in 2002. The 20 doctors at the hospital, especially the 21 cardiology group, especially Dr. Meister and his associates -- God bless them -- nursing staff, and the staff of the ICU/CCU are extremely kind, considerate and efficient for caring for the sick. They are my guardian 45 02/05/04 - COMMERCE - RESOLUTION 040046 angels. On August 10th, 11th, I had a sudden serious chest pain. I called Dr. Meister, "I'm suffering severe pain." I was admitted into the MCP Hospital on the midnight of August 10, 2002. The 11th, I had a stress test. The 12th I had a cardiac catheterization. And on August 13th, I had open-heart surgery. If I did not reach the hospital on August 10th at the right time, ladies and gentlemen and Honorable Members, I would not have been perhaps present to give you this witness. Besides me and my family, a majority of them who attend MCP, there are African Americans, minority people, white communities and other people like me coming from other countries going to the hospital and for the care. The patients get best of care, including excellent diagnosis, excellent treatment. The hospital is a God-given gift to all those people who are sick and who needed hospital. Their stay at the hospital makes the patient to recover fast and return 46 02/05/04 - COMMERCE - RESOLUTION 040046 home with rejuvenated health. In my opinion, the hospital is a super specialty hospital when compared to the rest of the hospitals, and super in every respect. Tenant's decision to close this hospital is a bolt from the blue. Tenet, a rich for-profit corporation is an entrepreneur that can make money in many ways and many ventures. Tenet's decision to close this hospital is a death blow to all the patients who are sick and need medical care. At this point, public interest, public safety, and public need is a priority and has to be safeguarded against all odds to serve the citizens of Commonwealth of Pennsylvania, and the citizens of City of Philadelphia Tenet does not care for the poor people. Tenet does not care for the patient. Tenet does not care for the suffering of the people. Tenet cares only to make money; dollars. Finally, I respectfully request -- I stand before you with all humility, I request 47 02/05/04 - COMMERCE - RESOLUTION 040046 the Honorable Mayor, the Council President, and the Councilmembers of the City of Philadelphia to intervene in this matter and try vigorously to reverse the decision of Tenet Corporation to close MCP Hospital and to keep the hospital stay open and help the people at the present and the future. May God bless you all. (Applause.)
I have one more sentence, gentleman. A student from the Women's Medical College of Pennsylvania, Dr. Ida Scudder (ph), a hundred years ago she came to India, traveled by foot, traveled by bus and established a 1500-bed hospital known as Christian Medical College, and it is a 1500-bed hospital. Thank you. (Applause.)
Thank you for your testimony. Let me note we've been joined State Representative Jewell Williams. I'm going to ask Councilman Nutter if he has any questions for this panel? 48 02/05/04 - COMMERCE - RESOLUTION 040046
No questions, Mr. Chairman. It's just a very powerful heartfelt testimony, and I appreciate the witnesses who are here for sharing your views with us today. Thank you. (Applause.)
Are there any questions from Members of the Committee? (No response.)
At this time, I ask Councilman Nutter to call his next panel.
Thank you, Mr. Chairman. Carol Fritz, Edith Dooney, Thomas Morgan and Lee Russo. Please identify yourself for the record, ma'am, and proceed with your testimony.
My name is Carol Fritz. I do not live in East Falls or even nearby, but I am nonetheless part of the community served by MCP. I traveled from my home in Powellton Village, across Philadelphia to see my primary care physician Catherine Sharif 49 02/05/04 - COMMERCE - RESOLUTION 040046 (ph). It would be far more convenient for me to go to a doctor at Presbyterian Hospital two blocks from my home or to the Hospital of the University of Pennsylvania six blocks away. Yet, I am 1 of over 2,000 women from all over the Philadelphia area who choose to get their medical care from the Centers for Women's Health at MCP. The care provided there, both on routine visits and when ill, is uniformly supportive, respectful, and excellent. So what difference will it make to us should our doctor's office be forced to move because MCP closes? Can't we just see the doctors somewhere else? There will be a great loss should MCP die. Part of the loss will be a splitting apart of the community of caring which exists at MCP now and has already been lost in other Philadelphia hospitals I've gone for care. I don't know why this is so. The size of MCP as an institution still permits the doctors to know each other. When I've needed a specialist, Dr. Sharif has referred me to her colleagues at MCP, not to a 50 02/05/04 - COMMERCE - RESOLUTION 040046 name off a list from a faceless healthcare administrator. The spirit the Women's Medical College, the tradition of women caring for women, of women achieving professional excellence, lives on in the Center For Women's Health and Wellness. In the City where the founding father's established our government to promote the general welfare, I'm shocked that such a great institution serving that general welfare is on the verge of death. MCP may have been the last best hope for monistic medical care in a society that increasingly puts profits ahead of people. Tomorrow will be a day to wear red to raise awareness of heart disease as the number one cause of death for women. I am one of those women who's dealing on a daily basis with the challenge of making the diet and exercise changes necessary to avoid a heart attack or stroke. If MCP closes, the community I rely on to support me and maintain my health will no longer exist. This will be a great stress and dislocation in my life, as 51 02/05/04 - COMMERCE - RESOLUTION 040046 well as the lives of the other 2000 patients treated at the Centers for Women Health. Personally, I work on legal cases on major class action complex litigation and I work in major cities all across the United States. Every year my accountant asks me if it is worth the thousands of dollars I pay in taxes to maintain my business in Philadelphia. Should MCP close, my personal tie to this City would be deeply affected. I will have significantly less reason to keep my business in this City. Thank you. (Applause.)
Thank you very much for your testimony. Ma'am, would you please identify yourself for the record?
My name is Lee Russo, and I am an employee at MCP for 27 years. I'm also a heart. I'm the manager of telecommunications. And I want to thank the City Councilman and State Representatives for allowing me to speak today. MCP, the Medical College of 52 02/05/04 - COMMERCE - RESOLUTION 040046 Pennsylvania, is a great hospital and it has ties to the community and nation for 154 years. MCP was the hospital for most of all our mayors and their family, our State Senator Arlen Specter and, of course, our current Governor Ed Rendell. MCP took care of the Kelly family, Grace Kelly, the Princess of Monaco, and their mother's portrait still hangs in our portrait gallery among the most famous female educators and clinicians of their time. Fighting Joe Frazier and others have been treated at our hospital as well. And, of course, the people who do most of the living, dying, supporting the City, the State, and the Nation. It is true that the current times are hard. But these are the very folks that live through and fought the war for our nation and our freedom, the freedom we take for granted, and thanks to these seniors we do. Now, Tenet is telling them, for those that it is hard for them to get around, that they have to travel far to get where they need to go. Many of these have no family left, so they 53 02/05/04 - COMMERCE - RESOLUTION 040046 have to ask for services. And what's worse, they're going to have to go to a place they don't know, a place they don't feel safe or comfortable in. I know, because my mother is 85 years old and she uses the facility. And so do many of my neighbors in Manayunk. The women who were taught and graduated at Women's Medical College are also the founder of the MCP Hospital. It was founded, as in most cases, by necessity. The very women who went to school were very qualified but could not break the all-male medical society so the MCP Hospital was established. Now these women could practice their profession because of the hospital. It was their drive that made this hospital in a country with all-male physician to survive. It was this school and this hospital that graduated the first black woman physician, Eliza Grier in 1897, a daughter of slaves who took 14 years to complete her studies. And it was the Women's Hospital that understood her family needs when she was needed to go home to pick cotton, but it was the college and the 54 02/05/04 - COMMERCE - RESOLUTION 040046 hospital that kept her studies current and alive during this time. The first native American Indian woman Susan LaFlesch-Picotte was trained here and devoted the rest of her life to serve her people in the under-served area of America. This hospital is also an institution of higher learning. I say this because this was the hospital that taught Dr. Larry Bush of Florida Medical Center who identified the first bioterrorism threat of Anthrax in the USA after the 9/11 disaster. Dr. Bush was trained by Dr. Mathew Levison and the late Dr. Okasanna Kornowiski, two great infectious disease physicians. It was their dedication and their ability to continue studying at MCP because the faculty allowed this and understood the need for research. Drexel University dropped this research at MCP and other research programs. What happens when there is another threat? Who will train the next Dr. Larry Bush? We can no longer be a nation where we are sure nothing can happen to us, a nation known as Camelot is over. 55 02/05/04 - COMMERCE - RESOLUTION 040046 Also, I want to inform this committee, my colleagues, and listening public in a time when our nation has been on an orange alert and down sometimes to yellow alert to keep awareness up, we cannot give up the only multi in-house HASMET center in Philadelphia in a high metropolitan area. If you allow this to happen, it is unpatriotic and inhumane. (Applause.)
If something were to happen to my family or me, I would not want to travel miles to get to one of these centers if there were one. One center just doesn't make it. Two centers don't make it and neither does three. The more we have, the better off we are. What do you think? (Applause.)
I have been listening to Mr. Schaengold and others saying the reason for MCP Hospital to close is the hospital has not met their financial goal. I and many others are very, very angry because it seems to us that this was the only thing that could 56 02/05/04 - COMMERCE - RESOLUTION 040046 happen based on what has been happening over the last few years. Tenet Health owns the hospital, but it is Drexel that actually runs the physicians' offices. This is one of the big issues that causes MCP to lose service that would bring in revenue to the hospital. An example, the orthopedic service, Drexel who owns the service did not want to pay for space at two locations. So they decided that they wanted to take the orthopedic people and put them in Hahnemann only, thus closing our orthopedic service at MCP and losing money. (Applause.)
It was also Drexel that pulled out pathology service. Example, histology, cytology, and autopsy service. It was Tenet Health, though, who had to pay to run these tests down to Hahnemann for testing, these samples. It was Drexel that combined two heavy outpatient services, primary care and medical clinic -- again, people who don't have a lot of money go to the clinic -- into one space because they were trying to go save 57 02/05/04 - COMMERCE - RESOLUTION 040046 money on space. But again, it was not a wise thing to do. What was worse is Drexel laid off more of the support staff that they would combine with these services. The support staff were people who make the appointments, call the patients back, take the phone calls off the answering service, greet the patients and spend the extra time when these seniors, new mothers, and first-time patients with medical problems need help and are frightened. Because of this, many patients were lost and they are looking for other services. Tenet also stated, "We are a Center for Women's Health," and the nation has recognized this. They have given us the Center of Excellence, yet Drexel pulled out our OB/GYN service from MCP. I also wish to point out that there has been a slow and deliberate systematic shift of faculty and specifically department heads from MCP to Hahnemann, further weakening the educational values. It is interesting to note that the current Dean Stephen Klasko is a graduate of Hahnemann, therefore has no 58 02/05/04 - COMMERCE - RESOLUTION 040046 allegiance to the well-being or future of MCP. Mr. Freeman, who is our CEO, announced that MCP had a business development about a year ago. It was to: One, pay special attention and grow the neurosurgery services with Dr. Warren Goldman, Dr. Alan Turtz, and Dr. Frederick Simeone. This was to be done by renovating the operating rooms and creating new operating rooms and installing the gamma knife. Two, it was to develop the orthopedics. And you know what happened. I just told you. Developing of cardiology. Drexel started sending all the cardiac patients to Hahnemann -- and I know because they tried to make me go and I wouldn't go -- to build up that department. They also started to knock down our cath lab, systematically dismantling and sending the parts to Hahnemann. That left us with one or two, so Hahnemann had a better cath lab because we had the best one. To enhance the Center for Women's Heath. And, again, as I say, we know how that 59 02/05/04 - COMMERCE - RESOLUTION 040046 enhancement went, they took out OB/GYN. Women use that service. To improve the surgical areas with Dr. Paul Curcillo. This, again, depended on the operating room development. Well, let me explain just a little about this. The operating room renovation started in three phases. Phase 1 started in late December '01 through mid-April of 2002. During this time, Operating Room 6, 7, 8 and 9 were closed, thus losing money. Phase started in early May of 2000 to mid-August 2002. During this time Operation Rooms 1, 2, 3, and were closed, thus losing money. Phase 3 stared in early September of 2002 but ended in September 29, 2003. Included in this phase was the new recovery room or we call it the PACU. With Operating Rooms 1 and 2 closed, again, losing money. This third phase ran into trouble because of Drexel. Again, the fight over space. Each time was this Phase 3 was started, Drexel would not allow it to continue because they were concerned about Drexel room 60 02/05/04 - COMMERCE - RESOLUTION 040046 space being used. Drexel wanted inch for inch in the same area. Well, let's face, two places can't occupy the same space. I mean, Isaac Newton, I think, said that. Since Tenet had given their word to the new neurosurgeon, Dr. Frederick Simeone, other scheduled operations were taken to Hahnemann -- there you go again, we lost money -- so the new neurosurgeon Frederick Simeone could operate, thus losing money for MCP and gaining money for Hahnemann.
Now, why did you take this year to look -- if you look real close you'll see all that is needed. The support of Drexel, and Drexel by the look of things had and has no 17 interest in keep MCP open. Why? Why? And what is their plan? Maybe it's the agreement they had with Tenet if MCP closed their doors they would gain $34 million. How interesting, huh? I'm wondering if the $34 million is a write-off for the $1 lease a year, this way Tenet wins and so does Drexel. It's money to a non-profit organization. Is that a tax 61 02/05/04 - COMMERCE - RESOLUTION 040046 write-off or what? )
I don't know if any of the listening public know this, but if a hospital closes its doors even for one day, it can never open again as an acute care hospital. For once it closes, the bed license is lost. And to ask for a new bed license, the building would never meet the current fire or safety laws and others. It's an old building. We're grandfathered. Not to say we're not fixing things, because we are and it's a safe place to be, but if it closed and you had to ask for new one, you'd have to meet every single solitary regulation. So you can't let the door close. You've got to find a buyer. You've got to leave it open the next 90 days. You've got to. (Applause.)
Please, I beg of you, don't let this hospital close. I beg you. I too am a patient. My sister just died of brain cancer. I know what this man is going through. When I wanted her to come to 62 02/05/04 - COMMERCE - RESOLUTION 040046 MCP, her family doctor said, "Don't go there. The services aren't there." So I was rushing her to Fox Chase all the time. Her epileptic seizures, every day, walk along, you just fall over. She died in my arms on the 20th of January. I wanted her in our hospital. Couldn't go don't there. Don't let that happen to anybody else, please. (Applause.)
Thank you very much for your testimony. Thank you. Do you have any questions? Councilwoman Brown.
Good afternoon, Ms. Russo. First let me thank you for what, for sure, was an informative testimony. It's clear you've done your homework, and you've been living and breathing this issue on a number of levels. And let me also thank you for what I call the little known black history facts about the hospital. Where I lost you was, you mentioned the closing of the only multi -- and then I lost your testimony something house in the 63 02/05/04 - COMMERCE - RESOLUTION 040046 region.
I'm sorry. I have copies I should have handed out. I apologize. Multi-bioterrorism center. Actually, this is what it is: It's a small building attached to our hospital, but it has its own entrance off our emergency room 9 which means someone can drive right up and pull right in. They don't have to walk in the hospital. They don't contaminate our hospital. They don't contaminate anybody in the ER, nothing. It was under construction -- it was actually our morgue for the longest time, so you know it has all those wonderful things because it was prepared for death. It was prepared so that it has its own feed for air. It has its own water supply. It has everything you need to enter this building. On the side is a parking lot so that if they needed to they just chase all the cars out and leave that there so that no one, no one who didn't need to be near these people would be contaminated. It's right in our ER, so our doctors just walk across and in there. It's a 64 02/05/04 - COMMERCE - RESOLUTION 040046 multifacet. I know there's on at -- and I don't want to lie to you -- the University of Penn, but it's one person at a time. This is multifacet. So when the weather is cold, you walk in, multiple people, they're all in their, stools, they all get sprayed with a chemical, they get their clothes off. We have trained our nurses, our physicians, our security officers, our maintenance men are all trained on wearing these masks. They were all told to take their beards and their mustaches off, which they've done because you can't wear them when you're wearing the mask. I mean, these are dedicated people who know what their job is. There is a policy we have in place on who we call. Our infectious disease department, our infectious control department, our administrators, our head of our nursing, these people are on one-minute notices. They carry long-range pagers. One-minute notices, these people are there.
And so without this center, Philadelphia indeed is at risk? 65 02/05/04 - COMMERCE - RESOLUTION 040046
Has nothing. As the young lady said prior to this, from New York down there is not another facility like it, not anywhere like it. And I'm very proud of it. (Applause.)
Your response prompts a follow-up question for me. At our last and first hearing, there was a lot of confusion, at least on my part, as to when different stakeholders were informed of the closing. As an employee, can you frame for me and us when you were informed of the closing? Because many of us learned about it when we read it in the paper.
Well, that's when I learned about. My sister, again who had cancer, had called me. She was very sick that night and asked me to stay at her house overnight because her granddaughter had also been sick with the flu. So I stayed at her house, but I told her I had to leave very early, but that was okay because her husband was home by then. I walk out my door about 66 02/05/04 - COMMERCE - RESOLUTION 040046 4:30 in the morning, and the paper was there. " Well, I nearly fell over. I called my operators, my telephone operators who were on call, and they told me that they were bombarded all night long with calls from the media, the press, the people calling them. It was like a frenzy. When I got to work, I was asked by the CEO to put out a message. We had beepers where you put one number in and it beeps off like a hundred pages. There was going to be an emergency meeting in the boardroom where Mr. Schaengold was going to appear. He actually made that announcement. I think it was the 18th. Then I had asked a couple questions at that time. I had heard -- our CEO had told us prior to that, like Thursday or Friday prior to the announcement that they were going to try keep us open for the next two years, thus allowing the gamma knife, the new renovated ORs, the neurosurgery people, and Dr. Paul 67 02/05/04 - COMMERCE - RESOLUTION 040046 Curcillo -- who I needed to mention, he's a wonderful surgeon -- to do their thing and keep us alive. I had asked if that was taken into consideration, and Mr. Schaengold said it was but they didn't think it was going to be enough because of the past histories. I wanted to know then what was going on because I had heard we were losing money maybe a couple months, but not every single month. It was like a shock to me to know that. I knew that we had lost money two years prior. We were in a hard time, and they had come to us, being the administration at the hospital, not Mr. " I took that question back to my operators. I had 14 operators. " Volunteered they took a cut in hours. For two years they cut their hours. You know how they paid them? Through their vacation time. 5 hour, depending on what needs to be done and paid themselves through their cash plus because they still had bills to pay. They did that for Tenet. Then they come in September and ask us again. My people cut themselves down to four days a week, again paying them through their vacation and personal time off, which left them no money but they thought they were helping their job. They thought they were helping MCP, and they put forth that effort, every single one of them without a qualm. When the overtime came, guess who did it? Fifty, sixty hours a week? Myself and my two supervisors. And that's the truth. Call 69 02/05/04 - COMMERCE - RESOLUTION 040046 anybody, even my big boss who doesn't work there anymore. He left before this happened. Fifty, sixty hours a week I was working to make up for the hours that my operators couldn't do. I even had operators who clocked out and came back to work on the switchboard because they knew how tired I was getting. They came back and worked for nothing because they love MCP. They like their job, they love each other, they wanted not for you to lose your job, you know, lay somebody off, let's all take a cut. And they have families to pay for. These are the kind of people that we have at MCP. These are the good, honest, dedicated people we have at MCP. These are not creeps. )
I had called earlier, but I did not see, Edith Dooney, Thomas Morgan. Is there a Ann Davis? And Dr. Walter Tsou. 70 02/05/04 - COMMERCE - RESOLUTION 040046 Ms. Davis, please identify yourself for the record and then you can proceed with your testimony.
My name is Ann Davis. I'm a patient at the Medical College of Pennsylvania. I'm an employee at the Medical College of Pennsylvania. I've been there for 32 years. I'm a Philadelphia resident. I live in North Philadelphia. And I brought my family to Medical College, my mother comes there and my sister comes there also.
I'm here the same reason everyone else is here. We do not want my hospital to close. I've been there for 32 years, and all this time I worked. I'll be 51 years old next week. I'm near retirement. Now, I don't hope all this is in vein. I hear Tenet say they're losing money. Well, I want you to know, we didn't have our hands on their checkbooks. The money I made, I have to balance my checkbook. If I spend a little bit too much, I know I have to cut back. They 71 02/05/04 - COMMERCE - RESOLUTION 040046 have accountants. Somebody had to tell them to cut back. For years, we watched them strip Medical College. But we're employees, we can't go up to the CEO office and say, "Hey what are you doing? You're taking all the services away?" When I came there, you could have a baby at Medical College. Your children could stay at Medical College. But we watched them strip her away. And now they tell you, she's bleeding fiercely. Well, I guess she is; they killed her, they killed her. They took everything out of there. I heard about Medical College closing from Channel 6 Action News. I'm saying to myself, "Nobody had the decency to tell the employees before they put it on the news?" They have been holding us mandatory ethics meetings. We had to show. They gonna tell us about ethics. (Applause.)
I told them, I don't 72 02/05/04 - COMMERCE - RESOLUTION 040046 need ethics meetings. If I don't have ethics by now, through my momma and my father and the grandmom raising us, I wouldn't get it by them. They holding us to ethics meetings. Well, where is their ethics meetings now? (Applause.)
Where are they now? I mean, we were forced to go. If we didn't go, you weren't allowed to work. So where are they now? Tenet don't live in North Philly. Tenet don't live in East Oak Lane. Tenet gets on a jet and they leave town and they sit in California with whatever they drink on the beach. And all they look at is stock markets. We look at lives. We work. We kept Medical College going. We did not run when that Arab came here and stripped all our money. We stayed. We didn't say, "We're leaving, we're going somewhere else." We stayed, because Medical College is where I grew up at. I planned on retiring from there. Now, I heard all the stories about people don't like to work, certain people 73 02/05/04 - COMMERCE - RESOLUTION 040046 anyway. But I want you to know, I worked. I'm not about to go on Welfare now. Where is my job going? I pay taxes here. How am I going to pay for my house? I live in North Philly here. But they don't consider that because they're rich people. Rich people don't live our lives. Not one of them mopped the floor or took care of a patient. All they do is look at a financial book. Well, where is our financial? I didn't get rich there. (Applause.)
I didn't get rich there. But I know one thing, if something happened to me in North Philly, I'm going to Medical College of Pennsylvania where I know the doctors are good. (Applause.)
In 1994, when I was diagnosed with breast cancer, I could have ran to Fox Chase. No, I came to Medical College where I know my doctor is good at. I stayed. My mother, I brought my mother there. My sister has colon cancer; I brought her there. Just to watch them strip her away? 74 02/05/04 - COMMERCE - RESOLUTION 040046 But we can't go up to the CEO office and say, "Hey, stop that. Why are you taking down Hahnemann?" They deliberately did what they did. Deliberately. So they can come before everybody now and say, "We don't have no 8 money. We're losing money." Well, they did everything they could to make them lose money. (Applause.)
But every day I'm hoping and I'm praying. You know, my mother always told me -- she said, "In a time of trouble, you learn your friends." Okay. We know Medical College is in trouble now, but we staying on this ship until it sink.
If I have to, I'll go back to '60 days. If I could get some shackles, I'm gonna chain myself to the gates, because we are fighting for our lives. We live here. These people are leaving town; they don't live here. I don't even think it penetrates them of what they're doing. Because they just fly in and they run around 75 02/05/04 - COMMERCE - RESOLUTION 040046 and they look at books and they say, "Oh, we ain't made" -- you know, one of their CEOs is making $24,000 an hour. Some of us don't make $24,000 a year. This is why these people say they don't have no money. It's the way they live. And it must be easy picking for them to steal the way they do and don't go to jail. (Applause.)
There's no way in the world anybody should be in healthcare for profit. You should be in healthcare to save lives and make people's lives better. We get a pleasure out of seeing our patients come back that been near death and say "thank you." We used to have premie babies before they took the maternity away, every year the premies would come back and you would see them as they grew up and they would get bigger and bigger, babies that maybe weren't even like a pound, you know, when they were born. And you watched them. We had a relationship with the people, the doctors, the nurses. I mean, we were a team. We held MCP together. But we 76 02/05/04 - COMMERCE - RESOLUTION 040046 couldn't do nothing with them and their checkbooks. And they kept stripping her. They kept sending everything to Hahnemann. Everything had to go to Hahnemann. We have doctors that pay rent there like private practices, Dr. Marlo, he's been there like 30 years. Now he's got to move his practice somewhere else because they're hollering they're closing. They're still threatening about closing. They passing letters and telling all the employees they have to sign it and you open the letter and it's about them closing, "We're going to close March 31st." They doing everything they can to discourage people, to make people leave. So their next move, I'm presuming -- I ain't been to college now. I don't have an M.D. The next move, I guess, is that "We don't have the staff there now because everybody left." (Applause.)
But they do everything the did to threaten people. They're doing everything they can to threaten people to make them leave. Telling people, "Get out, you 77 02/05/04 - COMMERCE - RESOLUTION 040046 going to Drexel, you going here or they're going there." You know, they doing everything they can. But I beg you, Honey, there's going to be a lot of lives -- it won't be none of their families because they're going to be in California. It's going to be a lot of lives lost. The Medical College has survived a lot of wars, a lot of -- 153 years of service. That alone must speak for something. She served a purpose. Now you going to tell me because these fat cats came in from California she's no longer serving a purpose? She is important. If you get hit on the expressway, you coming to the Medical College of Pennsylvania. And you want somebody there that you know is going to stand there and say -- you don't want them saying "Well, do they got Keystone?" You don't want them arguing over the insurance. You want somebody there that's going to work on you and try to save your life. And the Medical College staff people will do that. Don't leave it to these 78 02/05/04 - COMMERCE - RESOLUTION 040046 fat cats with the checkbooks because they might just ask how much you got; and if you ain't got enough, kick you to the curb. But healthcare shouldn't be like that. Healthcare should be about saving people's lives. It shouldn't be about your life means more because you have more money and these people here don't have enough. Your life is supposed to be important as anybody else's life. You should have a right to live. And they're telling us now that they're putting a price on life. And life shouldn't have a price. Is this what they teach children nowadays? There's got to be some more values somewhere in life for people to still hold on to. You got to stop this, how much life cost business. Somebody in the business for profit, they should be in the building bomb business or something like that. You know what I'm saying? Not a life and death situation.
I understand. Thank you. Thank you very much. 79 02/05/04 - COMMERCE - RESOLUTION 040046 (Applause.)
Good afternoon, Ms. Davis. I want to thank you for your testimony. It was very good and to the point. We were given this article, and I plan to ask a question from this article of Mr. Schaengold. One of the points I wrote on the back of my notes was, where is the compassion to cut the profit to serve the public and make it a viable hospital? And you said it all in your words that were so compassionate and certainly in some measure factual. I would say to you that Senator Roxanne Jones would be real proud of you. Thank you so much.
Thank you. Members of Council, thank you for these hearings on the proposed closure of MCP Hospital. I'm Dr. 80 02/05/04 - COMMERCE - RESOLUTION 040046 Walter Tsou. I'm the former Health Commissioner of Philadelphia and a spokesperson for the Philadelphia Area Committee to Defend Healthcare. We're a local healthcare activist group comprised of health professionals and concerned citizens. Our group's purpose is to advocate for quality affordable healthcare for all Philadelphians, and indeed all Americans. With the unanimous vote of City Council, we sponsored a Charter change in last November's elections which proposed that the City prepare a plan to provide universal coverage for all Philadelphians. This ballot question passed by a 2 to 1 margin, 75 percent to 25 percent. I'm here today to tell you that our committee supports in full the efforts of the Coalition to Save MCP Hospital. We know that if this hospital closes, there will be no 22 hospital from Lankenau to Temple and no trauma center in Northwest Philadelphia. People, as already eloquently stated, will die for lack of access to emergency care. 81 02/05/04 - COMMERCE - RESOLUTION 040046 Any rational plan of healthcare resources would question why we would close MCP's trauma center and keep open three Center City trauma centers located within three miles of each other. It is totally irrational, unless you accept that healthcare is a market commodity and not a public good. According to the Philadelphia Health Management Corporation's community health survey, we now have 136,000 uninsured Philadelphians, an increase of 45 percent in just two years between 2000 and 2002. In any other City, this would be front page news, but our papers have not even mentioned this disgrace. As we all know, Philadelphia is the largest City in the United States without a public hospital. When we closed PGH in 1976 we have never asked ourselves whether this was the right decision for Philadelphia. Indeed, unlike most cities, we have provided no 23 financial support for indigent hospital care. Now, in 2004, we are brought together by the perfect situation for crisis; low 82 02/05/04 - COMMERCE - RESOLUTION 040046 reimbursement, high malpractice costs, an exploding uninsured population, and no City funds for hospital care. Our district health centers are totally understaffed and overwhelmed with patients. As so many have stated, MCP is just the latest victim of a healthcare system out of control. How long will we sit on our hands while healthcare slowly disappears before us? MCP is an academic medical center that cares for a large number of uninsured patients. And while the reimbursement is not profitable for Tenet, the human cost of closing the hospital would be far greater than can be measured in dollars. There is a solution, and ironically it is quietly buried within the walls of MCP Hospital. There is a program at MCP which remains profitable, even though the patients come from the poorest sections of Strawberry Mansion, Hunting Park, Abbottsford Homes in Nicetown. What is this program? It is dialysis. It is run as a non-profit business, and every one of the patients are universally 83 02/05/04 - COMMERCE - RESOLUTION 040046 insured under Medicare. In short, the solution to the crisis at MCP and every healthcare facility in Philadelphia and this nation is in a properly financed single payer national health insurance program like Medicare delivered by a nonprofit institution. And so, our fight is twofold. On one hand, Philadelphia cannot solve this problem on its own. But we also do not have the luxury to wait. Our collective efforts brought $427 million to Kavaerner to save a thousand shipyard jobs to build luxury liners. Surely, we have the will to bring a tenth of that to save 1,300 healthcare jobs who fight to save our neighbors' lives every day. Our final task is political. Every Member of City Council should be fighting for a national health insurance system for our nation.
The benefit to Philadelphia alone for the 136,000 uninsured would be worth close to $700 million in healthcare purchasing power, more than enough to save MCP and many other hospitals. In summary, the Philadelphia Area 84 02/05/04 - COMMERCE - RESOLUTION 040046 Committee to Defend Healthcare supports the efforts of the Coalition to Save MCP Hospital. In the short term, Tenet must sell MCP Hospital and let someone else keep it open. Philadelphia should support this new entity. In the long run, we need a properly financed national health insurance program so that we can provide quality affordable healthcare to all Americans in the United States. Thank you very much. )
Thank you for your testimony. Councilman Nutter, do you have any questions for this panel?
No, I don't, Mr. Chairman. I'm still trying to take it all in. Thank you very much. Mr. Chairman, I would now like to call Mr. Phillip Schaengold, Vice President of Operations, Tenet Healthcare Corporation. Mr. Schaengold, please identify yourself for the record. Let me remind you this is a continued hearing from last week and 85 02/05/04 - COMMERCE - RESOLUTION 040046 you are still under oath.
Yes. Thank you, Councilman Nutter. My name is Phillip Schaengold, and I'm Vice President for Tenet, responsible for the Tenet Pennsylvania market. Mr. Chairman, and Ladies and Gentlemen of the Committee on Commerce and Economic Development, last week we voluntarily appeared before the distinguished Members of this Committee and we were fully prepared to deliver testimony and answer any follow-up questions as requested by the Committee. Last week my prepared remarks were distributed, but rather than take much of your time today and read it into the record, we will submit it as part of the information that has been requested from us by you. Let me, however, note for the record that we did not intend to disrespect Members of this Council, members of this community, our patients, or our employees in regards to the manner in which the announcement was made. We were, unfortunately, operating under a set of regulations that are federally oriented, 86 02/05/04 - COMMERCE - RESOLUTION 040046 and in our attempt to properly notify all of you and all of our employees and our physicians, the process was faulty and failed us. And on the morning of December 18, due to a leak to our local newspaper, we found ourselves reading the information in the press instead of being given an opportunity to share it with everyone individually. Let me assure you that it was never our intent to mislead or not to be forthcoming about the closure. Having said that, the decision to close MCP has been and continues to be a very difficult decision. We have concluded that economic forces simply do not permit us to continue to operate MCP without jeopardizing our remaining five hospitals. We have tried to identify parties that would want to acquire this facility, and as I stated last week, to date, none have been forthcoming. We are prepared to sit down with any entity that wishes to operate MCP as an acute care facility. We are even prepared to turn over the operations of MCP to the City of Philadelphia so that it can serve as the 87 02/05/04 - COMMERCE - RESOLUTION 040046 City's public hospital. We are prepared to work with the City, with the State, with all of you to rebuild a safety net, healthcare safety net, in the City. I'm prepared to answer any questions that you may have.
Thank you, Mr. Chairman. Thank you for your statement, Mr. Schaengold. And I'm sure, with the Chair's approval, it will be entered into the record as if you had read it. Based on your last couple comments, what steps have you taken regarding outreach into the general market regarding MCP? Who have you talked to to try to turn this situation around?
Well, we have made all the health systems here in the community aware of the fact that MCP is available to be operated by anyone that is a viable acute care operator to come forward. We have had 88 02/05/04 - COMMERCE - RESOLUTION 040046 confidential discussions with a couple of parties who wish to remain, at this point, anonymous because they have not shared that information with their boards. We've made it known to the State that we're prepared to turn over the facility to the State. The industry as a whole, healthcare both for profit and not for profit is aware that MCP is available to be acquired. As I said earlier, to date there have been no interested parties come forward.
What proposals have you or other individuals within the company developed to come back at least to the City or to the State with your own recommendations of how some form of healthcare service could be provided at the MCP campus?
We have not done so. We have made it very clear that we are a company that operates acute care facilities, that we really do not have the expertise to operate outpatient, urgent care, or any other forms of health services, but we would be prepared to work with other parties who would like to do that. 89 02/05/04 - COMMERCE - RESOLUTION 040046
So nowhere within the company, and since the December announcement, there's been no thought, no 5 time, no attention or consideration given to either what next or how do you clean up what has now tragically happened here in the market? You continue, including with last week's announcement, to indicate that you want to operate the remaining five hospitals in this marketplace. So apparently you're not going anywhere. What is to happen to that particular campus, and why are there no 15 resources being devoted to try to come up with some ideas or suggestions of your own?
We have no interest in continuing to operate a healthcare facility on that campus, and we have made it known to all parties that we are seeking other entities to do so. We believe that we are unable to operate an acute care facility there and have, therefore, announced its closure.
I understand what you don't want to do. What I'm asking 90 02/05/04 - COMMERCE - RESOLUTION 040046 you is, what are you prepared to do? And are you telling me now -- because you've said it three different ways -- that you plan to not dedicate one minute of time or resource or anyone else within the company to figure out how to turn a very bad situation around, come up with some ideas or some suggestions to either the City or the State or other people in the healthcare industry in this particular matter? Is that your testimony?
No, it's not. What I've said is that we do not wish to operate any healthcare facilities on that campus. I've also said that we have reached out to other organizations and are trying to identify ways that they could make use of this campus. But I have no specific proposal to present to you or to any other entities at this time.
Mr. Schaengold, you stated, "on that campus." Does that mean you have no intentions to operate more than five hospitals within this marketplace, or just not at that site? 91 02/05/04 - COMMERCE - RESOLUTION 040046
We are committed to operate the remaining five hospitals in Philadelphia. We have no plans at this time to acquire any additional hospitals.
If you were to decide that you were to operate a sixth hospital within this marketplace, would you do it at that site or would you choose another site? Is it the site that prohibits you from continuing the business?
Well, I think as I had stated last week, the economic elements associated with MCP are such that we have deemed that that institution is not financially viable, so we would not operate a hospital on that site. If other assets became available in this community over the next several years, we would certainly consider acquiring other institutions, but we have no 24 plans today nor do we have plans in the near future to acquire any additional hospitals in 92 02/05/04 - COMMERCE - RESOLUTION 040046 the Philadelphia area.
In this article 13 that was given to us by Councilman Nutter, there is a quote in there from, I guess, the CEO, Mr. Fetter. He talks about why you shouldn't break up. They've described the 69 hospitals as a good company. You have 69 hospitals in your company, and they're strong hospitals, good performers in good markets and always have been. Could you tell me what constitutes a good performing hospital and what characteristics did MCP have when you bought it, when you were put into the entire package?
I'll do it in 93 02/05/04 - COMMERCE - RESOLUTION 040046 reverse order. I was not here when the property was acquired, so I can't speak from firsthand knowledge. But as you may recall, all the AHERF (ph) hospitals collectively were losing a million dollars a day when they declared bankruptcy. MCP was in a losing position at that time. I believe what our CEO, Trevor Fetter, is referring to is that in order for a company like ours -- and we are an investor-owned company and we do manage and own hospitals -- we have to generate a margin, a positive margin, in order to have sufficient dollars to reinvest in our hospital. Contrary to some misconceptions, our company does not pay dividends. All the cash we generate goes back either into buying capital, paying taxes, paying interest on loans. There are no 19 dividends that are paid to shareholders. So in order for us to continue to succeed, we have to have a positive margin in our hospitals. That has not been the situation at MCP. And in fact, MCP this past year achieved a negative result of over $35 million.
What's the 94 02/05/04 - COMMERCE - RESOLUTION 040046 return to your investors? If it's an investor-owned company, what's the return to the investor?
An investor that buys stock into a company that does not pay a dividend hopes that over time the stock value goes up. And stock value will go up if the shareholders, investors, cities that own stocks, individuals believe that the company will succeed. So for companies who do not pay dividends, you are buying the stock in the hope that it will rise in value.
I know you weren't here. Maybe someone who was here at that time, in looking at MCP and where it was at the time when it was purchased, was there any effort to do an analysis to see what it would take to bring them up to profitability or just to break even in operating? Because as Ms. Davis was kind of pointed in that all of the services were taken away, and as you strip the hospital of services, certainly it can't function. What was done to begin with to look at that 95 02/05/04 - COMMERCE - RESOLUTION 040046 hospital to see if it could been made whole?
I'm sorry, but I don't have that direct knowledge. I will, however, note that over the past five years, the company has invested over $43 million in capital improvements at MCP in an attempt to fix the facilities, introduce new technology with the belief that that would help turn around the financial results for that facility, and that simply had not materialized.
What were some of the problems that even with your investment -- like, what were the reasons for not being able to turn it around?
I think the primary reasons are as follows: The payer mix for patients using MCP continued to deteriorate over the past several years. And when I say deteriorate, I mean a larger percentage of Medicaid and non-paying patients came to MCP. The commercial rates that we get in this community just cover the cost of the care, and so does Medicare. And when you have an 96 02/05/04 - COMMERCE - RESOLUTION 040046 institution whose patient mix is as high as MCP's in terms of Medicaid and non-paying, then reimbursement simply does not cover the costs of providing care. Second, over the last couple of years, you have seen a dramatic increase in cost of supplies, malpractice insurance, labor. And finally, in a sense an indirect problem, as malpractice insurance rates in this community and this State increased and as the crisis in malpractice has continued, physicians began leaving the Philadelphia area. And some of those physicians left MCP, either for other opportunities outside the City or for other opportunities at other health systems that could afford to pay them a higher salary. When you combine all of that, then you have a hospital whose costs are not covered by the reimbursement that we receive for those patient services.
Thank you. And the same question that Councilman Nutter and 97 02/05/04 - COMMERCE - RESOLUTION 040046 Councilman Goode asked you, bottom line, on March 30th, you intend to close the hospital?
Mr. Schaengold, you have several binders in a box to the left of the witness table. Are they responses to information requests from the Committee? Mr. Leonard, please state your name for the record.
Thomas A. Leonard. I'm representing Mr. Schaengold here today. We have taken the notes that we have from last week's hearing and collated all of the notes, and from those notes, generated a binder of documents which we believe were requested last week. Last evening we received the transcript. The next couple of days we'll go through the transcript, see whether there were other documents that were requested that were not part of this binder. If there is an 98 02/05/04 - COMMERCE - RESOLUTION 040046 oversight, we will supplement the binders. We have two binders that we're going to submit. One is the needs assessment that Tenet agreed to do when it acquired the hospitals out of the bankruptcy court from a non-profit bankruptcy that looked at what the community needs were and how to meet them. And that is public, and we can make that available to whomever wants to look through it. The other binder contains information that was requested, some of which is confidential. We would not share that information with our competitor hospitals, so I would ask that the second volume be submitted under seal. The press has asked us for copies of the second volume. What we will do is go back this evening, go through it again, and anything that is not confidential we will make available to the press. But the volume we give you will have competitive information in it that we would not like to have made public. With that understanding, I'll be 99 02/05/04 - COMMERCE - RESOLUTION 040046 pleased to give you the documents.
Thank you, Mr. Leonard. The Chair recognizes Councilwoman Miller, to be followed by Councilman Ramos.
Thank you, Mr. Chairman. Mr. Schaengold, just help me understand something. How much did the decisions based on structure at MCP contribute to the revenue losses? Such as in Ms. Russo's testimony, she talked about having a women's center, which is really good. Most hospitals have very nice women's centers. But then you take OB/GYN away, I would think it would have an impact on your revenues. Or taking orthopedics out or the cardiac unit, any of the other items that was listed in her testimony, I would think that the closing of departments at MCP, shifting them to Hahnemann, would have an impact on MCP's revenue. The other question I have, what is 100 02/05/04 - COMMERCE - RESOLUTION 040046 the payer mix at Hahnemann and what geographic boundaries does Hahnemann draw its patients from? So that's three questions there.
I don't have the specifics of what boundaries Hahnemann draws. I would say that it is probably a broader primary market because it draws from across the river in New Jersey. It has a significant helicopter service that brings patients to Hahnemann from the western and northwestern and northern suburbs, so their draw is significantly broader in distance than MCP. In regards to the structure, the physical structure, obviously, that is where we invested the millions of dollars, and it still would require significant investment because it is an old building. So that certainly contributes to the decision because we can see that the capital requirements for that building are significant. And if we don't generate sufficient cash through that facility, then we don't have money to reinvest into it. 101 02/05/04 - COMMERCE - RESOLUTION 040046 As far as the service mix, we have to depend on physicians who practice at MCP. And we tried to maintain a full service at MCP, but it is true that over the years the number of physicians in particular specialties may have moved either to Hahnemann or to other hospitals in this community. And, unfortunately, when physicians, particularly in areas like cardiology and orthopedics, choose to practice elsewhere, that does indeed have a significant revenue impact on your institution.
So the closing of the OB/GYN was more of a physician decision rather than the institution decision?
On that subject, I don't have firsthand knowledge. I apologize. But I believe that the closure of OB/GYN at MCP was done by the previous owner, AHERF.
I guess there just wasn't enough women from the geographic area that linked to MCP having babies, that they needed to go now to Hahnemann or wherever. 102 02/05/04 - COMMERCE - RESOLUTION 040046
Ma'am, the best I can answer is that the previous owner had decided apparently that they were better off in having a women's hospital and they had shut down the OB service at MCP.
I don't know. I would think probably seven or eight years. I'm guessing. It certainly was not in existence when we brought MCP out of bankruptcy. The OB was no longer there.
Okay. I didn't know that. But people in the back are not agreeing with what you're saying. They're actually saying it wasn't that long, seven or eight years.
In 1996, apparently, OB was closed at MCP and at Hahnemann, as a matter of fact. And Hahnemann 103 02/05/04 - COMMERCE - RESOLUTION 040046 then reopened its OB service.
No. They did. The AHERF system closed both and moved it to City Avenue, I believe.
I guess my questions were mainly based on -- it sounded to me when Ms. Russo was testifying, someone that's worked there for 27 years, I believe she said, so I kind of listened. I've had some experience at MCP. I don't live far from MCP. I live in Germantown. There's always been people in my part of town that have used Medical College historically for years. With that hospital, I have always been quite satisfied, and those that I knew that were there were satisfied. But I never knew that you didn't do OB/GYN until today. I just assumed that that was a full service, that still women came there and had their children and whatnot. I had a friend that was the head pediatric nurse practitioner there for years. 104 02/05/04 - COMMERCE - RESOLUTION 040046 I just didn't know that services had been cut. I don't mean to keep saying "you," but I'm saying that because you run it now. But the people in the back are still insisting that OB/GYN was shut down three years ago. Correct?
Excuse me. You have to come to the witness table to testify.
To me, it seems like the structure was systematically set to eventually close down Medical College. And maybe it's not good to have profit-making entities running things that we need so desperately, and that's healthcare here in the City. In any city, we need healthcare. Because I see it the same way Ms. Davis and some of the other people stated today, that this is a necessity. It's life support. It's quality of life in neighborhoods, and we need healthcare. I have one other question and then I'll stop. Ms. Russo, I believe, testified that if we closed the doors one day, that we would not be able to reopen it as a hospital. 105 02/05/04 - COMMERCE - RESOLUTION 040046 Is that so?
Do you, Mr. Leonard, know whether that is true or not?
I think it would be up to the State. They regulate healthcare in Philadelphia.
Does somebody know the answer to that? Maybe we can get that answer. Thank you Thank you, Mr. Chairman.
Someone from the audience would like to approach the witness table? Please approach the witness table. Please state your name for the record and proceed with your testimony.
I am Lee Russo. It is correct that the OB/GYN or the delivery of babies was removed from MCP in 1996 and given to the City Line Hospital, which was part of the Allegheny system and also part of Tenet's system when it was first bought. Then Tenet 106 02/05/04 - COMMERCE - RESOLUTION 040046 closed City Line, and so OB/GYN and OB was up for grabs again. Instead of us getting back some of it, they gave it all to Hahnemann. So they kept us in a lurch. They did take it away because they never gave it back to us where they could have. They sent it all to Hahnemann. I also mentioned that it was the Women's Care Center that no longer offered that service. What I meant was, there was no 12 OB or GYN doctor that you can call for an appointment, be seen, have your follow-up until your baby is delivered or you have a problem. That service is gone. You have to go to Hahnemann. There is no service like that in any of the Tenet hospitals now. It's strictly at Hahnemann. So it's correct, and yet it could have changed if they so desired to have that change.
I got that official from 107 02/05/04 - COMMERCE - RESOLUTION 040046 somebody that I know that works there. I can give you his name at a later date. I don't want him to be caught in the middle of it. But he called me today to remind me of that prior to me coming because we had discussed it last week. My concern was, when the Councilman talked about Parkview Hospital and whether someone could buy it, I became concerned and asked whether it was still considered a hospital. And the person told me that it's a law that if the hospital closes for one day, the bed license is no longer a valid license and has to be reapplied for again, which means all those rules and regulations -- and in an old building, as Mr. Schaengold said, it would be very difficult to comply with the laws of safety and fire, what-have-you. It is an old building and it needs a lot of work. I agree. Over the years more work could have been attended to. And, again, Mr. Schaengold is right. You can't live on love and prayer and all that stuff. You can pray to God that you find the 108 02/05/04 - COMMERCE - RESOLUTION 040046 money, that's true. But If you keep taking away and keep taking away and keep taking away, then you have nothing to base anything on. So we did need their help. We needed them to come in and say, "Look, something is wrong. Let me figure out what it is. Let me see -- if I can't give you money, let me give you back some of those services for a while, and see if you guys can help. Put forth an effort," and we would have. I don't blame it all on Tenet. As I mentioned, a lot of services were removed because of Drexel's intervention. I would like to know what Drexel is going to gain by the closing of MCP. I am very concerned. If someone else took MCP over, I will let you know that Drexel will lose a great deal. There will be no place for their students to go except all the way downtown. Because Queen Lane is only two blocks away. We have no more hospitals on City Line, so they won't be able to go there. It would be really a travesty to Drexel if someone else were to buy it as an acute 109 02/05/04 - COMMERCE - RESOLUTION 040046 hospital. I have a funny feeling in my gut -- and someone else has mentioned it to me -- that somehow Drexel is involved in this. They're going to wind up with that building to do as they want. Thank you.
Thank you, Ms. Russo. The Chair recognizes Councilman Ramos, to be followed by Representative Manderino.
Thank you, Mr. Chairman. Mr. Schaengold, you wrote a letter to the editor today, and according to your letter to the Inquirer, you say that there's a huge disparity between the national rate of Medicaid reimbursement for hospitals for low income patients, which you claim is around 97 percent at the national level, and the local rate, which you state is at 75 percent. With your expertise, to what do you attribute this disparity?
The State of 110 02/05/04 - COMMERCE - RESOLUTION 040046 Pennsylvania's Medicaid rate for reimbursing healthcare services is pegged at an amount that constitutes in Pennsylvania about 75 percent of cost. Pennsylvania happens to be one of those lowest reimbursers of Medicaid services. As a result, basically the cost of providing service to Medicaid patients in Pennsylvania are not being sufficiently covered. It's not a local problem. It is a Commonwealth problem.
I don't know the specific states, but on a national average, Medicaid tries to cover just slightly below a hundred percent of cost. So I think in my letter, on a national level, it's around 97 percent.
When you realized that this was below the national rate, did Tenet try to do anything to get this reimbursement rate at the national level?
We have state hospital organizations. We have local 111 02/05/04 - COMMERCE - RESOLUTION 040046 hospital organizations that have been working on this issue for many years on behalf of all hospitals. This is not a Tenet issue only. This affects every hospital in the Commonwealth.
Also in the same article you claim that commercial health insurers in the Philadelphia area have one of the lowest private insurance reimbursement rates in the country. To what do you attribute the low level of reimbursement?
Probably to a lack of competition. This market is dominated by a single payer, and they have very successfully been able to achieve contracts that are very favorable to them, which to their credit they've been able to achieve. This is not at all a derogatory criticism of them. Because of their tremendous market presence, the reimbursement rates are lower than in other parts of the country. And that, unfortunately, as I've said last week, in this country the private insured payer gets the burden of covering the uninsured. And when 112 02/05/04 - COMMERCE - RESOLUTION 040046 that private payer does not share that burden, then you have a potential problem in the community.
If you have these concerns of Pennsylvania having the lowest reimbursement rate, you stated last week -- and it was something that all of us here, especially those of us that represent the whole City as At-Large Members of this Council, they were committed. And I believe you used the word strategic plan for this area was to keep those other five hospitals open, and that was a public statement that you made here. But at these rates, if you're concerned about this, all these concerns of reimbursement, isn't this at some point going to affect your other five hospitals as well? Is it affecting it now?
At some point it will affect all the hospitals in the City of Philadelphia and the Commonwealth. We have made a strategic decision that we would like to remain in Philadelphia because we believe that our five hospitals can, over time, 113 02/05/04 - COMMERCE - RESOLUTION 040046 succeed. But I will share your concern. I think over time this City, this State, is going to have to come to grips with the fact that the healthcare system is not well and that more hospitals are going to be closing as a result of the discrepancy between cost and reimbursement.
Along the same lines of my question, there's an article that I believe Councilwoman Tasco referred to. It's called The Week in Healthcare. Are you familiar with the publication? I guess you are, right?
In the second to last paragraph of that article, it says here, if you can permit me -- Mr. Chairman, can I read this paragraph? It says, "Finally, Bill Watts said the investigation of Tenet and the wrath of malpractice lawsuits that it faces over allegations that physicians performed unnecessary procedures at Reading" -- this is 114 02/05/04 - COMMERCE - RESOLUTION 040046 a town in California. He said a company's fate hinges on where the US Justice Department takes its investigation of Medicare outliers. If prosecutors pursue fraud charges the damage they seek could put Tenet out of business. Hypothetically -- I don't like to draw at all in hypotheticals, but let me do it this time. How about if this comes to be true? It seems like you would have to consider closing the other five hospitals in Philadelphia. Correct me if I'm wrong. This is quite a statement here in a medical journal.
This gentleman is an individual who I think this article it points out is a major Tenet skeptic. He represents one of Tenet's leading shareholder critics. That represents his opinion. I really don't know what he bases it on.
But he does make references to a number of issues that you have, with being sued for malpractice and so forth. Would this put our other five hospitals in danger? 115 02/05/04 - COMMERCE - RESOLUTION 040046
Well, I think all those issues are probably the reasons why we have tried to reduce our holdings to roughly 70 hospitals. Obviously, any damage that takes place on a national basis through our company could have an effect on the Philadelphia hospitals.
Also, in the last paragraph in your letter to the Inquirer today -- I must admit I agree with you and I believe the different groups of the MCP community who have testified. I'm a user of MCP for many, many years. They have treated me very well there and helped me stay as healthy as I have cooperated. I concur that we have to create a well-designed, properly financed and accessible healthcare safety net for the citizens of Philadelphia. That was part of your quote. We do have an obligation, one, to fight for MCP to stay open. But, number two, that there is a healthcare crisis in this country and it's hitting us very hard in this State and this City. It tends to impact low 116 02/05/04 - COMMERCE - RESOLUTION 040046 income residents. So I will tell you that I do concur with parts of that last sentence in your article. But I also share the concern of everyone who has testified here today. One, in the manner that this announcement was made and the disregard, whether it was intentional or not, of the workers there and the people who are serviced there. And I'm here to join my voice with the good Councilman of the district where MCP is at, Councilman Nutter, and the rest of my colleagues to see if there is still a way to keep this facility open to the community in that area. Thank you, Mr. Chairman.
Thank you, Councilman. Councilwoman Reynolds Brown has a quick follow-up, and then Representative Manderino.
Good afternoon, gentlemen. I was struck by the comment you made wherein you said the announcement of the closing was leaked. At our last hearing we 117 02/05/04 - COMMERCE - RESOLUTION 040046 had some discussion about standard operating procedure. What would have been the appropriate standard operating procedure, in your view, with regards to announcing to all the stakeholders that this action was ominous for the hospital?
We are a public company and are bound by SEC regulations. We have taken a very conservative approach in any announcement that impacts the market or region. The plan on December 17th after the market closed 4:00 was to contact our stakeholders and prepare to meet with our managers, employees, and physicians the next morning. There were meetings set up for seven in the morning. The Board of Directors was called and asked to attend an emergency meeting. Somewhere along this process someone within my company gave a courtesy call to an individual, and that information wound up at the Philadelphia Inquirer. And they did what they should do when they have information, they tried to confirm it. We were unable to confirm the story. 118 02/05/04 - COMMERCE - RESOLUTION 040046
Yes, the Councilman, the Mayor's office and the Governor's Office. We had placed calls to Harrisburg. We did not hook up with everyone because it was right in the middle of the budget discussions. By the time we were able to reach certain individuals, the press had already beaten us to them to confirm the story. And when we all woke up the next morning -- or for some of us who can get it in the middle of the night online -- the story had broke before we had an opportunity to speak to our employees and our physicians and our board members and all the other individuals that we had planned to communicate with. It was not intentional. But again, as I've said before, you're all owed an apology because the process failed. We take responsibility for it.
Thank you for that explanation because we struggled, as I said at the last hearing, and none of us gave 119 02/05/04 - COMMERCE - RESOLUTION 040046 you the opportunity to at least state what is. We were curious about the manner in which it happened and, of course, disturbed by the process, but we never did get you to tell us what is standard operating procedure. Having heard that, you will recall at the last hearing that Councilman Frank DiCicco alerted us that he was actually in discussions with St. Agnes that was about to close. So what you've shared with us is direct contrast to the manner in which that closing is coming to pass and, if I'm not mistaken, has indeed announced, formally announced, that it's closing. So it just speaks to the level of discontent, to put it mildly, that's being shared by the residents of that area because the process failed.
Unfortunately, again, as I said, we are a public company and we are burdened with many regulations that we are following. We were very conservative in our approach. Some would argue that we should have been more liberal in our approach and not be as concerned about public disclosure. We 120 02/05/04 - COMMERCE - RESOLUTION 040046 simply took the most conservative route and we failed. And as a result of our failure, we embarrassed friends and we failed our employees and our physicians and our constituents, and we've been suffering the consequences since then. It was of our doing and we bear the responsibility.
Thank you for your testimony. Thank you, Mr. Chairman.
The Chair recognizes Representative Manderino. REPRESENTATIVE MANDERINO: Thank you, Mr. Chairman. Thank you, Mr. Schaengold. I now have two lines of questioning. I'm going to pick up where Councilwoman Blondell Reynolds Brown left off, because I listened very closely to what you said to her, and I guess I'm still very disappointed in my understanding of that answer. Because what I understand you to say is that the only thing that would have been different was a matter of hours precipitated by a press leak, and not a 121 02/05/04 - COMMERCE - RESOLUTION 040046 matter of months that might have helped this community come together and find an alternative. It seems to me that you said the only thing that would have been different, had you done it the way you wanted to do, was that the morning after the staff and stakeholders would have known, and then they would have read it in the paper the next day, but you weren't changing the time frame in which you were planning to close things down. You weren't changing the approach in terms of trying to find a new seller, that I think you're fudging a little bit on because in that meeting that I was a part of with Governor Rendell a couple weeks ago in Harrisburg, I believe that was the first time that you said you would consider selling that to someone else if they were interested in it. So that wasn't part of the plan when the decision was made. Now, what am I missing here, or do I have it right.
What specifically 122 02/05/04 - COMMERCE - RESOLUTION 040046 is the question? I'm sorry. REPRESENTATIVE MANDERINO: Do I have the scenario right? Was it just a matter of hours in terms of notification that is the only thing in the timetable that would have changed if the press leak had not happened?
That is correct. I think if Members of the Council recall, last week our company made an announcement that we intend to divest of 27 hospitals. Unfortunately, again -- and I'm not using it as an excuse -- I'm trying to present the facts. There are 27 communities that also received that information the morning of the announcement that they could not have received that information prior to that without us violating our responsibility under public notice. REPRESENTATIVE MANDERINO: I understand your responsibility under public notice. Truly, I do. I understand what you're saying about how it is for profit you're governed by SEC. You don't want to give any tips. You don't want to mix 123 02/05/04 - COMMERCE - RESOLUTION 040046 shareholders. I understand all that part. The part that I don't understand is the time frame, once you make that public, that you give the community who is going to be affected. It seems to me that that is a dollars and cents decision, that is maybe what you have decided is in the best interest of your shareholders, but not what we're saying in the best interest of the communities being affected. And at least I believe it is my opinion -- I know it is my opinion, I believe it is the opinion of many others that the balance was struck much more heavily on the side of the dollars and cents as compared to on the healthcare and health needs of the community and the patients. In the 27 other cases, since I know they're in many other states, I suspect there are lots of other time frames in terms of from the date of that announcement when is the closing; is that correct? Or are they all 60 days or 90 days or whatever it was as in the case here in Philadelphia?
I'm not privy to 124 02/05/04 - COMMERCE - RESOLUTION 040046 those other specific situations. But you're correct, here in Philadelphia the notice was a 90-day closure notice. REPRESENTATIVE MANDERINO: The notice here was a 90-day closure notice because that was what Tenet decided they could do because that was what was required by State or City law, because of some other reason I'm not thinking? Or where did the 90 days come from?
The 90 days are a requirement by the Commonwealth. And in view of the mounting losses at MCP, we really could not sustain continuing those losses without jeopardizing our remaining five hospitals. REPRESENTATIVE MANDERINO: Last week when we talked --
Representative Manderino, if I may make a point of clarification. I too was at the meeting with the Governor, and you may recall that I said that I journeyed to Harrisburg in October with Teresa Huskey to meet with representatives of the Governor's Office to discuss the financial 125 02/05/04 - COMMERCE - RESOLUTION 040046 problems that MCP was experiencing. REPRESENTATIVE MANDERINO: And the purpose of that was to discuss the potential closing or to discuss the need for monetary infusion into a hospital?
The purpose of that was to alert them that there was a very serious problem, and without very serious help, there were going to be dire consequences. REPRESENTATIVE MANDERINO: Okay. Let me go back to Mr. Schaengold. Last week we talked about the letter from the State with regard to the need for Tenet to file a closure plan for the 90 days to start ticking. And you said last week that you disagreed with the conclusion of that, but that the next day, if I remember correctly -- I can't remember if you were delivering a plan to them or going to court to figure out whether you should give a plan to them. But can you tell me what actually happened, and has a plan been delivered, a closure plan been delivered to the State? 126 02/05/04 - COMMERCE - RESOLUTION 040046
It is my understanding that the Commonwealth regulations require that hospitals give notice of 90 days of their intent to close. The State does not have either an approval or denial process within those regulations. The need for a closure plan is part of the department's policies and procedures. We met all the requirements of the notice, requirements in the state regulations. And the letter that you're referring to, we have submitted to the Department of Health noting that we have a different interpretation than theirs of the requirement of the closure plan. REPRESENTATIVE MANDERINO: So right now we're in an exchange of letters that's dealing just with the interpretation of the state law? Because you don't agree with the State, you're telling me you haven't filed anything in additional that the State claims they were looking for in terms of an actual closure plan such as outlined in those regulations and policies?
No. We have 127 02/05/04 - COMMERCE - RESOLUTION 040046 submitted that closure plan. We have been in discussion with the State. We have been in discussion with the State since the day of the notice. But we did submit a very comprehensive closure plan as per their request and have followed it up with further clarification. That is all in the hands of the Department. REPRESENTATIVE MANDERINO: Great. When was that delivered?
The plan was submitted on January 30th. That was followed up by telephone conversations seeking further clarification, and that was submitted on Tuesday. REPRESENTATIVE MANDERINO: When you were in discussion with Councilwoman Tasco about the reasons for the closure of MCP and also with Councilman Ramos discussing today's op ed letter in the Inquirer, they kind of mirrored each other except for one item, it seems to me, and that's the payer mix at MCP deteriorating. I read your letter this morning and I thought, I agree with him a 128 02/05/04 - COMMERCE - RESOLUTION 040046 hundred percent on the status of the healthcare market in the United States, in Pennsylvania and in Philadelphia. I just am not sure why that made the difference at MCP as compared to at Hahnemann, at Roxborough, at Albert Einstein, at Temple, at St. Agnes, whatever. Because they're all facing cost increases and they're all facing physicians leaving and medical malpractice costs and labor costs, supply costs, and Commonwealth reimbursement problems and a dominant single private insurer dominating the market in the Philadelphia area. There were two things that I heard that seemed to me to apply specifically to MCP, and that's what I want to discuss. One, under physicians leaving, you mentioned to Hahnemann and others -- and one of the prior testifiers, Ms. Russo, mentioned specifically what she thought were all of the physicians leaving, transferring, or being enticed to Hahnemann. Do you have numbers or can you give us numbers of physicians that left MCP in the last three years and how many 129 02/05/04 - COMMERCE - RESOLUTION 040046 of those went to Hahnemann versus -- I don't expect you to know where the other ones went -- but if 50 of them left in the last three years and of them went to Hahnemann and 25 6 of them went somewhere else, can you put 7 numbers together like that and submit it to 8 us? Are you the right entity or should I be 9 asking Drexel? 10
Well, we can 11 probably provide a summary of physicians that 12 have left our medical staff and gone somewhere 13 else. We can certainly provide that by 14 clinical category, not by name. 15 REPRESENTATIVE MANDERINO: But when 16 you say somewhere else, would you know if they 17 specifically went to one of your other Tenet 18 Philadelphia hospitals? 19
Sure. 20 REPRESENTATIVE MANDERINO: The payer 21 mix at MCP deteriorated. That was the first 22 response that you gave to Councilwoman Tasco. 23 And I know you were here when Ms. Russo gave 24 her testimony, at least from where she was 25 sitting, about why she believed the payer mix 130 02/05/04 - COMMERCE - RESOLUTION 040046 at MCP deteriorated. And if I can just take the liberty of paraphrasing her, it was because all of the profitable stuff got transferred to Hahnemann; orthopedics, pathology, the combining of two heavy outpatient services, which I assume meant heavily used, into a small one. And at least in her mind, Drexel is the villain. I wonder in your mind if you could explain whether or not any of this had an impact on the payer mix and the deterioration of the payer mix at MCP, and if orthopedics and pathology and these others were not profitable services or whether they were profitable services? That would help me understand this picture a little better.
Let me first frame the issue as follows: I think everyone hopefully understands that we provide the hospital setting where physicians practice. We don't employ the physicians, so the physicians have a right to move their practice to any other institutions they wish. It could be other Tenet hospitals. It could be other 131 02/05/04 - COMMERCE - RESOLUTION 040046 community hospitals. So we need to remember that we don't control the physicians. The physicians are free to relocate. If physicians who are in the clinical subspecialties of cardiology and orthopedic surgery and open-heart surgery choose to do their work elsewhere, that does have a negative impact on the hospital because those are very well-reimbursed clinical services. So any shift in mix of that nature does have an impact. Another aspect of MCP that is very unusual is that MCP received 60 percent of all of its admissions from the emergency room. In other words, it has a relatively small -- 40 percent -- number of admissions that come from, in a sense, the practice of medicine in somebody's office. And what has happened in the community that MCP serves, is that MCP's emergency room has become to some extent a primary care center. Therefore, those admissions are generally of individuals who do not have appropriate insurance, and when you combine that with the low Medicaid rates, then 132 02/05/04 - COMMERCE - RESOLUTION 040046 you have a hospital whose payer mix, as well as its source of paying customers, has shifted over time. REPRESENTATIVE MANDERINO: I don't mean to be rude and cut you off. I really do understand that dynamic in the healthcare market. If I can refocus a little bit more. Orthopedic services, were they profitable when they were at MCP?
I don't know what you mean by profitable. I would say that orthopedic procedures have a higher reimbursement than, let's say, a pneumonia patient. REPRESENTATIVE MANDERINO: So when orthopedic services and surgeries were being done at MCP and were bringing in the higher reimbursement, was more money coming into MCP and was the payer mix different in MCP such that when it was removed to somewhere else the payer mix at MCP deteriorated? Your words.
That is correct. REPRESENTATIVE MANDERINO: Thank you (Applause.) 133 02/05/04 - COMMERCE - RESOLUTION 040046 REPRESENTATIVE MANDERINO: Pathology, are pathology services a service that pays better, has more private pay patients, brings more money into a hospital?
Pathology is a hospital-based service. They don't bring in patients on their own. REPRESENTATIVE MANDERINO: Do they get reimbursement money when those services are being provided?
I don't know what their reimbursement is. That's the physicians' side. REPRESENTATIVE MANDERINO: The physician side is very interesting because I hear what you say. You said it today, you said it last week. You own the hospital facility. You run the hospital facility. Drexel ran the physicians. But if all the physicians who are employed by this entity that employs the physicians at two of your facilities all of a sudden start moving to one of your facilities, don't you as the holder of the hospital and the real estate and the 134 02/05/04 - COMMERCE - RESOLUTION 040046 services in the second facility start to worry about whether you're going to lose money on your investment in that second facility? And were there any discussions with Drexel, who had the physician contracts for both of these facilities, about what impact these shifts were having on the MCP facility in East Falls? Were there any discussions over those years as the patient mix was deteriorating and the services were shifting about what impact that was having on your investment in that hospital facility in East Falls?
I don't know what discussions took place, but I'm sure that there were discussions that probably dealt with that. As I said, we have to rely on the physicians' support. We have to remember that it is not just Drexel we're talking about. Each of these hospitals has its own compliment of private physicians that also has a mix of patients that is or is not revenue generating.
If I may, Representative Manderino. I'd just like to 135 02/05/04 - COMMERCE - RESOLUTION 040046 put this discussion in perspective because I, unlike Phil, was here five-and-a-half years ago when the acquisition was made, and I, unlike Phil, do know what the situation was. At the time of the Allegheny bankruptcy, it was the largest bankruptcy in the United States. We had eight hospitals and 17,000 people that were going to be thrown out of work and patients who were going to be put on the streets. It was literally a healthcare crisis in Philadelphia. The only institution in the United States willing to take all the hospitals -- there were other people willing to cherry pick two of the institutions, but the only institution in the United States that was willing to come in and take all eight hospitals, preserve the jobs and make a go of it and take a run at it was Tenet. Now, at the time Tenet came in, I specifically met with the Governor, Governor Ridge, and Mayor Rendell, and all of us recognized the following facts: That in Philadelphia there are 5.9 hospital beds per thousand people. In the rest of the United 136 02/05/04 - COMMERCE - RESOLUTION 040046 States there are 3.1 hospital beds per thousand people. We used to have 2.5 million people. We have about a million more now. There are some real economics at work here. And it was clear to everybody that other hospitals were going to have to close. The deal the Governor made to Tenet was to come in, deal with this crisis, and then in an orderly fashion, if we have to deal with the real economics that exist in this City, do it, but do it in a way that doesn't cause a healthcare crisis. They've done that. They've given MCP five years of life that it wouldn't have had. This was a bankrupt institution that nobody else wanted to buy. So it's not like Tenet did anything to destroy this institution. It was done when they came in. They kept it alive for five years. REPRESENTATIVE MANDERINO: Thank you very much for that explanation. I guess my only response would be that some think it was still cherry picking, just on a little slower time frame. 137 02/05/04 - COMMERCE - RESOLUTION 040046 I want to get back to the question again that I was trying to get to about physicians and the hospital.
Representative, one quick follow-up. Mr. Leonard, is your testimony that you think that it's the right decision to have one owner of the entire system?
They were the only ones that would take the entire system. There was no choice.
No. You said there were other providers that wished to take pieces of the system. I said, is it your testimony that the best decision at the time was to have one owner of the entire system?
Yes, it was. Because without the two hospitals the people wanted to cherry pick, there wasn't a shot for the other six.
So there were not several providers that could cover the entire system without Tenet just taking total ownership; is that your testimony? 138 02/05/04 - COMMERCE - RESOLUTION 040046
That's correct. REPRESENTATIVE MANDERINO: Mr. Leonard, I'm sure it was inadvertent, but you've conveniently made me lose my train of thought here. Thank you, Mr. Leonard. I guess I'm still very struck at the gamma knife. The gamma knife, now, that was a new venture for a new line of business that I assume was meant to bring in money that was undertaken at MCP once Tenet was the owner. Am I correct on the basic facts first?
Yes. REPRESENTATIVE MANDERINO: Why did you do that? I'm just saying, why did you do that? Maybe I should be more specific. Did Tenet make the decision that, "Gee, we ought to attract a good profitable line here and let's invest in this gamma knife and get a physician group in here that's going to run it and bring this business into this hospital"? Was that a Tenet decision?
Two years ago, the chairman of the neurosurgery department made a 139 02/05/04 - COMMERCE - RESOLUTION 040046 proposal that to enhance the neurosurgery services at Drexel and at MCP we should invest in a gamma knife. And a decision was made by my predecessors that that was a reasonable approach, and they committed a significant amount of money, over $5 million, to acquire and install that service. REPRESENTATIVE MANDERINO: So Tenet was in on the decision to invest $5 million for a new service and the physician group that came along with it and put it at MCP, but they weren't involved in the decisions to move physician groups in orthopedics or anywhere else away from MCP and somewhere else? When it was moving it away from MCP, it was purely a Drexel and physician driven decision; but when it was putting it at MCP, it was a Tenet-driven decision? Is that what you're telling me?
No. That's not what I said. REPRESENTATIVE MANDERINO: Okay. What am I missing?
What I said was 140 02/05/04 - COMMERCE - RESOLUTION 040046 that a proposal was presented by the chairman of the neurosurgery department for a new modality. Tenet evaluated that proposal and agreed with that recommendation. And together with Drexel, we tried to develop a neurosurgery center at MCP. REPRESENTATIVE MANDERINO: So if the physician group would have said, "We have this great idea, let's put it at Hahnemann," that could have been an equally valid decision?
That is correct. REPRESENTATIVE MANDERINO: And you wouldn't have had a different decision from your corporate entity holding these two hospital buildings as to whether or not you would have invested the $5 million in one place or another because it's a physician-driven decision?
It happened to be a proposal that made sense to Tenet at the time, that it would be an effort, again, as part of our $43 million that we've invested at MCP, again, trying to find ways to change its payer mix so that it can be financially viable. 141 02/05/04 - COMMERCE - RESOLUTION 040046 This was a proposal that was deemed to be reasonable, and it was tried. REPRESENTATIVE MANDERINO: It was reasonable to try it at MCP to improve their payer mix?
Correct. REPRESENTATIVE MANDERINO: But it was reasonable to move orthopedics away from MCP to deteriorate their payer mix? I'm really not trying to be funny here. I'm trying to understand the decision-making process. And when the decisions -- you know, I'm not trying to be obtuse. It just seems that when it's convenient to say that it was a decision made solely by the physicians and by Drexel, we say that; and when it's convenient to say it was a decision made by Tenet, we say that. And I just can't believe there wasn't some collaboration, because both entities you have a financial stake in. And I guess that's what I'm struggling with, and that's what we're struggling with. And not struggling with it for the purpose of beating you today, but 142 02/05/04 - COMMERCE - RESOLUTION 040046 struggling for the purpose to understand whether MCP really had no other option. I mean, that's why all these questions are happening, because it seems to me that depending on which way you spin the story, there could have been lots of different options or no options. And now we're sitting with one option, which is to scramble in a very short time frame to pick up the pieces that we were left with. And so that's the reason for these seemingly obtuse questions, to try to understand how the pieces fell apart, to have a better understanding of whether they can be put back together. I don't have any more questions, Mr. Chairman.
Thank you, Representative. Mr. Leonard, we thank you for the responses to the information requests, although they just arrived today so, of course, we have not had time to fully review them. This book alone, I don't know how pages, but there are 37 different sections. 143 02/05/04 - COMMERCE - RESOLUTION 040046 It's my understanding through separate conversations you had with myself and the Vice Chair, Councilman Nutter, that you will make other representatives from Tenet available to respond to these documents; is that correct?
That is correct. Is there going to be a hearing next Thursday, too, Mr. Chairman?
If they will be available next Thursday, then this hearing, when Councilman Nutter is finished with his questioning today, will be recessed until next Thursday at 1:00.
It would be helpful if I could spend some time with Councilman Nutter and you maybe getting the focus of the next line of inquiries so that I bring the right witnesses. Mr. Schaengold, having been here for only a year, can't answer some of the questions. And I do want to get the right witnesses from around the country to respond to your questions. So the sharper the focus can be, the better the witnesses will be. We will bring people in next Thursday to deal 144 02/05/04 - COMMERCE - RESOLUTION 040046 with, I believe, the general area of the acquisition and what happened five years ago. Is that your understanding of the general focus that hasn't been dealt with yet?
I guess the question I would throw back to you is, what are our options? Are you saying that only certain people are going to be available and that a whole host of senior management can't make themselves available next Thursday?
No. I'm saying we want to make available the right people from senior management, wherever they be in the United States, to answer the questions. I'm just trying to figure out what the questions might focus on so I can get the right people.
We can give you a preliminary answer to that, but until we review the 37 different sections of this document, which we received today rather than on Monday, we cannot give you a full answer to that about what the full scope of our investigation will be next week.
We did not receive the 145 02/05/04 - COMMERCE - RESOLUTION 040046 transcript until last night.
Councilman Nutter gave a very detailed request on the record last week. It was not our note-taking that was at fault.
I believe Councilman Nutter has some other questions that he wants to ask you before we recess today.
Thank you, Mr. Chairman. I apologize. Mr. Schaengold, there was testimony earlier -- and I should have asked this question probably first. Ms. Robinson testified, and I would like to get an answer to her very serious question. Can you tell us the status of MCP, and more specifically the emergency room on January 24th and the situation that Ms. Robinson laid out with regard to the transport and ultimately the death of her son?
I don't have any. 146 02/05/04 - COMMERCE - RESOLUTION 040046
I can give you the information that we got by making some phone calls. On January 23rd there was no divert, and on January 24th there was only four hours of divert. The four hours of divert on January 24th were from p.m. to 2 a.m., so 8 there was no divert at 2:42 or 2:45 when the 9 incident occurred. 10
Well, one, I guess, Mr. Leonard, what I would say is -- and I appreciate you getting that information. First, it sounds like the divert may have ended somewhere within an hour of when the incident took place. Second, how do we know that all the appropriate personnel were notified that the divert had been lifted? Third, what information do we have as to why based on, again, our recollection from earlier today of the location of the incident, why would a person been taken whose been shot four times to Temple versus MCP?
How do we know 147 02/05/04 - COMMERCE - RESOLUTION 040046 that the lifting of the divert information was communicated in a timely fashion to all the personnel who need to know?
I can't answer that question. I can tell you that even if there's a divert on, it's up to the driver to determine whether or not to bring them to the nearest hospital because it's a matter of life and death. He can do that even if there's a divert on. But as to how they communicated the information, I can't answer that
So let me make sure I'm understanding. Your testimony would be that the divert ended at 2:00 a.m., and if the incident took place at 2:15, 2:30, 2:42 a.m., all the necessary personnel would have been notified so that they would be aware the divert was off? But even if they weren't, the EMS personnel -- the second part of what I'm hearing from your testimony, an EMS personnel or individual made a decision at that time to not transport to MCP and to go to a hospital farther away, that's your response?
That's my guess as to 148 02/05/04 - COMMERCE - RESOLUTION 040046 what happened.
So what we should then do is ask the EMS unit to come in and explain to us why they made that decision, because the hospital at that point had done what it was supposed to do?
That's my understanding. I might also tell you that my understanding as to how the divert works, when you put a divert out for a four-hour block, it's that. That's how it's communicated. There will be a divert from 10:00 to 2:00 at MCP.
Yes. It was put out for a four-hour block, so I don't know who communicated what after that, but it was never, say, it's on divert permanently or it's on divert all night. It's on divert from 10:00 to 2:00.
Well, let me ask this question. I know you are an excellent 149 02/05/04 - COMMERCE - RESOLUTION 040046 lawyer. I'm not aware of any medical expertise that you may have. But if an individual is shot four times, would that generally been considered a level one trauma?
Mr. Schaengold, would that be considered a level one trauma?
No. The trauma unit has been on suspension at MCP since November 10th.
When the nurses' strike began, we suspended trauma services and we have not initiated it since.
No. Trauma services were suspended in anticipation of the strike, within 24 hours or 48 hours. 150 02/05/04 - COMMERCE - RESOLUTION 040046
There was discussion about suspending trauma services, though, at MCP earlier that year?
I believe that prior to my coming on board, there had been discussions about the need to decide on one trauma center within the Tenet system, but I made a decision to maintain both trauma centers.
So let me make sure I'm understanding. The trauma unit was closed as a result of the nurses' strike. The ER was on divert from 10:00 p.m. to 2:00 a.m., you would believe that all necessary personnel would be notified that divert was off. But even if they were not, the personnel on the scene can make a decision to go to MCP anyway?
And so, similar to Mr. Leonard, what we are now left with is trying to investigate why a decision was made to take a person who had been shot four times to a hospital farther away? Is that where we're left? 151 02/05/04 - COMMERCE - RESOLUTION 040046
Well, I would assume that they would have gone to the nearest trauma one center.
And since you had closed your trauma, they could not go there?
It has been on suspension since November, that's correct.
Okay. I'm sure we'll be looking a little further into that one. Do you have any information with regard to Mr. Wynder? I believe in his testimony raised the issue of an incident at Abbottsford and Pulaski?
If you could get some additional information on that, I'd like to know about it. You can talk to Mr. Wynder. You can check through some records. I'd appreciate it. Let's go back over a couple of other items that were raised earlier. I have to 152 02/05/04 - COMMERCE - RESOLUTION 040046 admit that I was somewhat surprised. I know that you have a number of highly qualified staff and other professionals. We don't know the answer to the question with regard to if the hospital closes for a day, the license ceases or terminates or expires or is suspended and could not be brought back into place? We don't know the answer to that question?
Well, if you're proposing to close the hospital, if you're proposing to sell the hospital, if you're proposing to give it to the City or to the State, wouldn't you want to know the answer to that question before you close it?
I believe all those issues are the province of the State. I think they can restart, increase, decrease the number of licensed beds. It's under their purview.
Well, I understand that. And if I had the State in 153 02/05/04 - COMMERCE - RESOLUTION 040046 front of me, I'd ask them about it. But for the moment, it's your hospital. You say that you want to work with us or work with just about anyone. Again, it would seem to me in that context you would want to know as much as possible about all of the options, the pluses and the minuses that go with them, and have some sense of urgency that if this is true -- and I don't know whether it's true or false. I'll take the witness at their word. I've read through your statement. I've listened to everything you've said over the last two weeks. It would seem to me that in an effort to help repair this particular situation, you would want to know as much as possible about all of our regulations, what happens in a laundry list of scenarios of what-ifs. So I would ask you to find out so that the next time we ask the question, we have a definitive answer.
Let's talk about the HAZMAT unit. Is your testimony correct 154 02/05/04 - COMMERCE - RESOLUTION 040046 that this is a unique facility not only in Philadelphia, but on the east coast?
I believe it's unique in Philadelphia. I don't know about the east coast.
I've been led to understand that it's the only free-standing facility. But I will also share with you that every hospital in Philadelphia has a HAZMAT policy and procedure that deals with the need for decontamination.
Can any of them treat as many people as this unit can at any one point in time?
I would put that in the realm of we'd like to know. And I would think that you'd like to know, especially given the fact that I guess in Washington we've got a poison situation, and earlier today we apparently had -- I don't 155 02/05/04 - COMMERCE - RESOLUTION 040046 know whether it's been confirmed or not -- an anthrax scare. We are living in these kinds of times. And you have a unique facility there. I understand every hospital has to do certain things, but if one facility can treat one or two persons at a time, and I understand this particular facility can treat up to 30 people at a time, that's a little bit of a difference.
I believe that all hospitals in this community can handle significant numbers of individuals in that area. They don't have an enclosed facility, but they can handle it on their campuses. But I don't know the exact numbers.
Well, I guess my last comment on that is I've been informed by apparently people who know, notwithstanding all of the hospitals having certain particular capabilities, that when the President of the United States is in the City of Philadelphia, if something happens to the President of the United States, he's to be taken to Medical College of Pennsylvania. 156 02/05/04 - COMMERCE - RESOLUTION 040046 (Applause.)
We don't need to talk politics, and I certainly hope nothing ever happens, but if it's good enough for him, I think it's good enough for the rest of us. (Applause.)
Let's talk about the consultant report. There was a lot of discussion last week about beliefs and assumptions and conclusions that had been reached by the company. My recollection, without flipping back through my notes, is the report was received on December 9, 2003. I believe you were then in Dallas on December 10th and 11th, and the decision to close was made on December 12th; is that correct?
Your consultant report on says under general conclusions, "MCP can be returned to fiscal viability if given a new clinical direction in a reasonable period of time in which to correct longstanding, chronic operating problems." 157 02/05/04 - COMMERCE - RESOLUTION 040046 Do you agree or disagree with that conclusion?
Then on it talks about the essential conditions to return to fiscal viability. "In order to make the changes required, a stable management team committed to MCP's success must be established. It in turn must heighten the expectations for first line manager performance and accelerate the pace of improvement." Did you take any steps to address that particular bullet point?
Not on the 9th, no. 18 But that is a requirement for this plan to be successful.
Wasn't there a conclusion in this report that one of the critical components to turning the hospital 158 02/05/04 - COMMERCE - RESOLUTION 040046 around was to return trauma services at MCP?
You hired a consultant because you respected their opinion?
You respected their opinion or you just hired them because they needed the work? Please answer the question.
But in the final analysis, you took none of their advice?
In the final analysis, we took their input, and combined with our assessment of the situation, we concluded that in months the hospital could 22 not be returned to financial viability and 23 will continue to exhaust our resources. 24
When did you realize the hospital was losing money at the 159 02/05/04 - COMMERCE - RESOLUTION 040046 -- it's been reported on many occasions the $5 million level. Was that a month or a year?
There have been newspaper accounts that seem to indicate that the hospital was losing $5 million a month. Is that true?
It was accelerating its losses throughout the year, and in the fall it reached $5 million per month, approximately.
Well, as I stated earlier, in our opinion it was a deterioration of the payer mix, as well as the increased cost of providing care.
It appears to have been gradual, but the financial results were 160 02/05/04 - COMMERCE - RESOLUTION 040046 fairly dramatic.
Over what period of time was there a gradual change in this mix?
They had a number of reduction in force. They tried to identify ways to reduce expenses. They have tried numerous programs.
Was this all going on at the same time that services were being taken away?
I'm not sure that the term "services taken away" is accurate. I think service -- physicians moved from MCP to other facilities.
I don't know why. Decisions were made by physicians, by their employer, by others that they wanted to practice elsewhere. 161 02/05/04 - COMMERCE - RESOLUTION 040046
And they just, as they say, willy-nilly make these decisions. You wake up and you say, "You know, I just don't like working here anymore. I don't like providing services up here anymore. You know, this old hospital, I'm tired of this place. I'm just going to go somewhere else." Is that how doctors make their location decisions?
Well, Mr. Schaengold, you are in the business. You must have some idea how doctors make their decision about where they want to practice their profession.
Physicians would like to practice in locations where they have appropriate patient mix to meet their clinical expertise and they would like to make a reasonable living, and they decide where they want to practice depending on those types of factors. As I said earlier, we don't employ the physician.
What is the difference for a doctor between practicing at 162 02/05/04 - COMMERCE - RESOLUTION 040046 MCP versus practicing at Hahnemann?
I'm asking you as a professional. I'm not in that business. What difference does it make where you work?
It could be their interaction with their colleagues, it could be the research facilities they have, it could be their geography, it could be any one of a number of items. But, sir, again, I don't employ the physicians.
I understand. So your testimony is, "We have the buildings and whoever wants to work here can work here. We have no ability to control what goes on. We don't keep certain their services or practices or clinical operations and they can come and go as they please. We're just like the big landlord with the big building, and some other outside force determines what goes where." How could you run a hospital like that under those terms and conditions? You 163 02/05/04 - COMMERCE - RESOLUTION 040046 cannot be telling me that you have no ability to control what goes on in a hospital.
Well, Mr. Leonard, with every respect, I'd like him to tell me what his testimony is.
He's told you that. I'm going to let him tell you one more time. He's not required to speculate.
I don't understand his response. He's a professional. He's in charge of the system. He's in charge of these hospitals. I understand that there's maybe for some of us an inability for us to understand the complicated nature of hospitals and doctors and medical schools. So if you could break it down to us at an elementary level, then I won't have to ask you the same question five times.
I'll try again. I'll back up a little bit and move to a higher level. In the private sector, the non-academic sector, just about the entire 164 02/05/04 - COMMERCE - RESOLUTION 040046 medical staff is voluntary. They have offices off the campus, on the campus, and they come and go and they decide whether they want to practice at St. Agnes or Graduate or at Chestnut Hill or at Temple. In the academic environment, most of the physicians on those campuses are full-time employees of the university. And the benefits of that includes the fact that they don't have to worry about malpractice insurance because they're employees. They have health benefits. They have a reduced salary, but they have the amenities of working for someone else. At Hahnemann and MCP, it's a mix. You have some full-time faculty that are Drexel physicians; that's their employer. You have some that are associated at MCP with PCOM, and they may or may not be their employees. And then you have a private sector who can come and go as they please. They can practice at Roxborough, they can practice at Hahnemann, they can practice at MCP. So the private sector can move back and forth and they can accept a job at Temple or they can 165 02/05/04 - COMMERCE - RESOLUTION 040046 accept a good deal at Albert Einstein or any other hospital in the region. And the Drexel physicians work with their colleagues, and decisions then are made about where is it the most appropriate place to concentrate one's practice. Now, we have input in that, that we can dialog about that issue, but at the end of the day, the physicians decide where they would prefer to work or where the facilities are more appropriate to their particular skill. So a good example at MCP, the neurosurgeons, the chairman of the neurosurgery chose to be at MCP and made a proposal for an investment to support his practice. Other subspecialties shifted to other locations, whether it was Hahnemann or other hospitals. So in a sense, it may sound bizarre that we have very little to do with it. We have input. We can offer programs to help build clinical programs, but this is a system that depends on where physicians would like to practice. 166 02/05/04 - COMMERCE - RESOLUTION 040046
And the hospital administration can't really do anything to hold on to certain types of services or certain types of offerings that either affect patient mix or which doctors practice where?
When a physician leaves or a group leaves, there is certainly efforts at MCP to try to recruit replacements for that clinical service. Some physicians left into private practice and some physicians left to the academic arena. So it isn't as though MCP's administration simply allowed that to happen without a response. It's just that they were unable to recruit replacement physicians.
So when we heard testimony earlier about things or services or practices being taken away or shifted to another hospital, what exactly does that mean?
I don't know what they were referring to. I will assume that if a physician left to go somewhere else, he took his or her practice with him.
Because there 167 02/05/04 - COMMERCE - RESOLUTION 040046 was more work or better services or better conditions somewhere else?
Do you know of any affirmative steps that MCP took over the past couple years to hold on to certain practices or certain physicians or improvements that were made in the facility -- I mean, obviously, it's a very old building -- to make the work condition better?
Well, a good example, as was mentioned by an earlier testimony, of a surgeon with a particular interest in robotic surgery and minimally invasive surgery wanted to do his work at MCP. As a result, significant improvements were made to the operating room. In fact, on two different occasions the rooms were renovated in order to accommodate his particular interest in minimally invasive surgery. And, again, a significant investment was made at MCP to support his particular specialty. And he came from another system in this town. 168 02/05/04 - COMMERCE - RESOLUTION 040046
Okay. One of my colleagues has a couple questions and I will return. Thank you. Thank you, Mr. Chairman.
I tried to follow the line of questioning from Representative Katherine Manderino. Help me understand something. MCP essentially was the place of work for the physicians, correct?
Some of the physicians at MCP, about half of the medical staff is Drexel employees.
This is just for my own understanding, because at the end of the day it doesn't move the bottom line. Where was the line of accountability for those doctors, at Drexel or at MCP?
It's sort of a matrix. Physicians in the hospital are governed by that hospital's medical staff by laws and regulations. 169 02/05/04 - COMMERCE - RESOLUTION 040046
So that would be with MCP. But employees of Drexel University also have lines of authority through their system because they are employed by someone. Private physicians would not have that matrix to deal with because they are a private solo practitioner or group practitioner. So an academic physician that is fully employed by a university probably on any given day has several masters in terms of how a hospital operates.
So when a physician decides that they want to leave where they perform their work, they actually have to give notice to several different entities, as you just described?
Well, they would have to reach agreement with their employer if they were employees. If it's a private physician, he or she does not have to do anything other than simply stop working or stop admitting to a particular hospital. And 170 02/05/04 - COMMERCE - RESOLUTION 040046 in this community, I will tell you on any given day there are physicians moving from one system to another, from one hospital to another. This is a never-ending process.
And along with MCP taking on responsibility to ensure that the patients we talked about last week get moved with appropriate care, will the same level of consideration be given doctors, or is it incumbent upon doctors to find their next place of work? The public we're talking about, not the private.
We're going to have to work with Drexel and with those physicians to find other places for them to do their work. Those who are in private practice probably already have privileges at other institutions.
Just a couple last questions. What happens if the court's January 171 02/05/04 - COMMERCE - RESOLUTION 040046 8th, 2004 stay is not lifted? What are you going to do?
We are still dependent on the number of staff that we have. And if the courts intervene, which we hope they would not, we will obey by the court's order.
It won't close and we'll continue to operate in a diminished capacity.
And from your perspective, are you in compliance with the order as it relates to equipment and personnel and any items that may have been removed prior to December 30th, 2003, having been returned to MCP?
This matter has been dealt at the court level. We have complied with all aspects of our agreement with the court.
Well, I appreciate the answer or the response. I 172 02/05/04 - COMMERCE - RESOLUTION 040046 mean, it's kind of like a yes or no question. Have you returned everything to the hospital, equipment, personnel, and all other matters in accordance with the court order that were in place on December 30th, 2003, yes or no?
Your statement has an allegation that we removed equipment, which we denied that that ever happened. And we have complied with the court's order and have so informed the court of that.
Well, I didn't make an allegation. But I'll rephrase it this way. Is it your testimony that every person and every piece of equipment and all other services that were available on December 30th, 2003, are now in place at the hospital today at 4:30 in the afternoon on February 5th, 2004?
My testimony is that we are in compliance with the agreement we have reached with the court.
Okay. Mr. Leonard, you asked us earlier with regard to some of the information that 173 02/05/04 - COMMERCE - RESOLUTION 040046 you sent up by way of the binders. I want to make reference to one of the items. Tab 30, in what I think is the larger binder, that's the only binder with tabs. When I asked last week -- and I believe other Council Members or Representatives from the General Assembly asked for financials. What I appear to have is one sheet for each year. Now, I've seen a few financials in my time. This is a fairly large operation. It cannot be possible that we're getting all the information that we requested if you give me one sheet of paper with the financials.
Councilman, my understanding is that this is the financial information given to the Governing Board at the hospital. As you're well aware, since MCP is part of a public entity that operates over a hundred hospitals, the consolidated statements are much different. There's no 22 independent consolidated statement that is prepared to put out for just that facility. The numbers from each facility roll into the major consolidated statements that are 174 02/05/04 - COMMERCE - RESOLUTION 040046 generated for Tenet Healthcare. And there's detail on these, but this is the detail that goes into the report on all hundred hospitals -- or 70, whatever it happens to be, at the time the report is compiled.
Well, let me ask this question. Is there a Chief Financial Officer at the hospital?
What's the 175 02/05/04 - COMMERCE - RESOLUTION 040046 salary of the Chief Financial Officer?
We'll be glad to get the salary. I don't think we want to make it public. We'll be glad to provide that information. I'm not sure that we want to publicly provide that information. We'll provide it to the Committee.
I'm not applying for the job. You can give me a range. I know there are five or six hospitals. Chief Financial Officer is a fairly high job, right?
So it's not out of the realm of possibility that as the Regional Vice President that you would actually know what a Chief Financial Officer 176 02/05/04 - COMMERCE - RESOLUTION 040046 makes at one of the hospitals.
I know the range of payment. Each hospital is a different size.
So you're telling me that you pay a person $120,000 to $200,000 and they produce one sheet of paper in terms of your financials? Is that what we're talking about?
I'm assuming the Chief Financial Officer produces a volume of papers and documents to turn over to the CEO as the management team tries to figure out what's going on with the hospital, right?
Okay. So when I made the request last week for the five years of financials, I'd like a full financial report on the hospital, each year for the last five years. That was the request. So there 177 02/05/04 - COMMERCE - RESOLUTION 040046 must be more information than the one sheet of paper I have for each year, correct?
Yes. This is the information we share with our board. The other information --
I didn't ask for the information as a member of the Governing Board. I asked for the information as Member of City Council participating in a duly authorized hearing under the leadership of our Chair, Councilman Goode. And I think, Mr. Schaengold, you full well knew what I would be asking for as a Member of City Council asking for financials for the hospital that is proposed to closed. We don't need to go back to where we were last week. I'm asking for a full financial report for each year for MCP for the last five years. How long will it take you to get it to me?
Councilman, let's get clarification here. We shouldn't be playing games. This report gives you --
It's a little late in the day to play games. 178 02/05/04 - COMMERCE - RESOLUTION 040046
This report tells you the admissions, the length of the stay, the average daily census, the number of visits at the ER, outpatient visits. It gives you net revenue. It gives you operating expenses. It gives you the EBIDA (ph). It gives you the appreciation and amortization. It gives you operating income. It gives you interest expense. It gives you pre-tax income, income tax, and net income. They are financial statements that give you a snapshot of the operation of the hospital. What financial statements beyond that information do you want?
I want the financial information that the Chief Financial Officer would provide to the CEO to give a complete picture, not a snapshot, of what's been going on at the hospital for the past five years. (Applause.)
And I am sure that when Mr. Schaengold was in Dallas on December 10th, 11th, and 12th, I would have to 179 02/05/04 - COMMERCE - RESOLUTION 040046 believe that whether it's Mr. Jennings or Mr. Fetter or anyone in between, they had more than a sheet of paper to make a decision to close a 153-year-old hospital. I just have to believe that. (Applause.)
And I don't think that you can hand out that document at a board meeting and any member of the Board of Directors of Tenet Corporation would accept that as a part of a financial document. So, no, I do not want to play games. You have asked for us to hold certain information. I think we've agreed. We're all adults here. Let's respect each other. I asked what I asked for. I would like to have it as soon as possible. When can I have the information.
We'll see what other financial information we can get together for you.
Let's say we'll shoot 180 02/05/04 - COMMERCE - RESOLUTION 040046 for Monday.
I appreciate it. Mr. Chairman, given the hour and the volume of the request, I would be more than willing to relinquish at this moment, but I'd like to have the opportunity to bring the individuals back for further questioning. We've received two binders of information. We have other outstanding requests that Mr. Leonard has indicated by going over transcripts of last week's testimony we should anticipate receiving, and now hopefully we'll get a complete financial picture of the hospital. So with your indulgence, I'd like to have the opportunity for further questioning at a time convenient to you and the Committee next week.
Mr. Leonard, are you prepared to work with Councilman Nutter on the type of witnesses he will require for next Thursday?
Do you have any need for the two binders you have there beyond 181 02/05/04 - COMMERCE - RESOLUTION 040046 this hearing?
For the purposes of this hearing. Do you have any need for them beyond this hearing?
I can give you a copy of the table of contents if you want.
So you're providing one set in response to information requests to nine Members of Council on this Committee, several State Representatives, State Senators, a United States Congressman and a United States Senator? Are you telling us that we should work from one copy or just make the copies? 182 02/05/04 - COMMERCE - RESOLUTION 040046
It would be easier to work from two copies. Are you denying that request?
If you'd like, I'll make a second copy and send it over to you.
Thank you, Mr. Leonard. This hearing is recessed until February 12th at 1:00. (Council adjourned at 5:00 p.m.) - - - - 183 C E R T I F I C A T I O N I HEREBY CERTIFY that the foregoing proceedings of the Council of the City of Philadelphia of February 5, 2004, were reported fully and accurately by me, and that this is a correct transcript of the same. RE: COMMITTEE ON COMMERCE AND ECONOMIC DEVELOPMENT _________________________ Lisa C. Bradley, RPR