Inquirer.com – Zurich DR

Category: Health Care

  • Jefferson Health sued IBX, claiming payment changes cost it nearly $100 million this year

    Jefferson Health sued IBX, claiming payment changes cost it nearly $100 million this year

    Jefferson Health says it has incurred nearly $100 million in financial losses this year because of policy changes by Independence Blue Cross in a lawsuit filed this week.

    The lawsuit, submitted Wednesday in Philadelphia Court of Common Pleas, detailed five policy shifts — including two impacting when IBX pays higher inpatient rates for hospital stays — that Jefferson says amount to breaches of the current contract between the region’s largest health system and its largest insurer.

    “IBX has attempted to use policy changes to — over time — effectively rewrite the contract” and pay less than agreed to in the contract, Jefferson’s lawsuit said.

    The suit comes less than six months before its IBX contract expires Dec. 31, adding pressure to negotiations over a new deal. Jefferson said it cared for more than 300,000 people with IBX insurance last year.

    In the last year, the nonprofit health system has shown its willingness to challenge major insurers at a time of increasing financial strain on both insurers and healthcare providers nationally.

    IBX introduced a series of payment changes impacting both commercial and private Medicare plans this year as it faces intense pressure from employers to slow the growth of healthcare expenses and from the federal government, which is trying to trim spending in Medicare Advantage plans.

    Independence declined in an email to comment on the claims in the lawsuit: “We value our provider partners, honor our contractual commitments with them, and regularly discuss any issues. It’s unfortunate that Jefferson chooses to do this in the public arena but if you’ve kept up with the news you can see this is typical of their playbook.”

    A series of reimbursement shifts

    The biggest financial impact came from IBX’s requirement, effective June 1, that certain procedures be performed in lower-cost freestanding ambulatory surgery centers, rather than in hospital outpatient departments, which often get paid twice as much for the same work.

    Jefferson estimated damages from the ambulatory surgery center rule at $35.4 million.

    Two policies affecting when IBX pays inpatient rates cost Jefferson a combined $35.5 million, according to the complaint.

    Jefferson sued Aetna in April over a similar policy that reduces payments for Medicare Advantage plans if Aetna considers patients not sick enough to qualify for full payment.

    The complaint says a policy that eliminated payment for hospital readmissions up to 30 days after discharge cost Jefferson $18.3 million. Since 2017, Penn Medicine has had a contract with IBX that does not pay Penn when patients return to the hospital within a month of being discharged.

    Finally, Jefferson said IBX has failed to pay more than $7.2 million owed under a controversial federal drug discount program known as 340B.

    “After trying to work directly with Independence Blue Cross to resolve these breaches of contract, we have been forced to take this action on behalf of our patients,” Jefferson’s vice president for payer relations, Allison Yudt, said in an email. “This action is the result of a pattern that has repeated itself time and again.”

    IBX said in its statement that it “acts in the best interest of our customers and members and protects their access to high quality affordable care.”

    Jefferson’s harder line with insurers

    Jefferson has expanded through acquisitions from three hospitals to 33 since 2015. The most recent acquisition was Lehigh Valley Health Network two years ago, creating a network that stretches from South Jersey to near Scranton.

    Amid significant losses in recent years, Jefferson has been taking an aggressive approach with insurers when it believes they are paying it less than contractually required.

    This year, Jefferson’s Lehigh Valley Health went out-of-network with UnitedHealthcare for commercial and Medicare Advantage plans. Last year, Jefferson went out-of-network with Cigna for a few weeks before reaching a deal.

  • Main Line Health is adding specialty physicians to reduce wait times

    Main Line Health is adding specialty physicians to reduce wait times

    In the last 16 months, Main Line Health has gone from employing no gastroenterologists to nine, with two or three more expected to start this summer.

    The hiring is part of a push by the nonprofit health system to reduce wait times for patients.

    “We are down to three weeks” from months of waiting for a GI appointment, Main Line CEO Ed Jimenez said in a June interview. The organization has also hired six GI physician assistants and nurse practitioners to speed up care.

    A similar move in urology is planned as the health system in Philadelphia’s western suburbs partially unwinds its traditional heavy reliance on outside physicians for specialty care, seeking to regain momentum after financial losses during the COVID era.

    In another shift, Main Line is replacing contracted Jefferson Health trauma surgeons with its own hires. Main Line is ending its contract with Jefferson at the end of this year.

    Overall, Main Line has hired 100 physicians since Jimenez became CEO in June 2025. About a third replace people who retired, but “two-thirds are brand new, accretive, so we’ve been very successful,” he said.

    Some of the hiring is related to the needs of patients coming to Main Line after last year’s bankruptcy collapse of Crozer Health. That includes eight OB-GYNs and one advanced practice provider hired from Crozer.

    Starting a urology department

    Christopher Hartman joined Main Line from Northwell Health on Long Island in January as medical director of urology. One of his jobs is to build the employed physician group. How big it gets will depend on its success in drawing patients.

    By targeting GI and urology, Main Line is putting itself into competition with private practices — U.S. Digestive Health and MidLantic Urology — it has had close ties with for years.

    MidLantic’s market president, Michael Hagg, is Main Line’s system chief for urology. Main Line said he oversees urologists who are not Main Line employees.

    “We continue to work and serve the communities of Main Line Health as we have for the past several decades as urologists, collaborators, and leaders across all four Main Line Health campuses, working with past and present CEOs and hospital presidents,” Hagg said in an email.

    Both MidLantic and U.S. Digestive Health grew substantially with the help of private-equity backing. U.S. Digestive was sold last year to a subsidiary of UnitedHealth Group, SCA Health, which declined to comment on Main Line’s move into gastroenterology.

    Bringing trauma surgery in house

    Main Line plans to hire at least a dozen trauma/critical care surgeons to replace the Jefferson Health physicians it has been relying on for those services. Main Line’s emergency departments at Lankenau Medical Center and Paoli Hospital are Level II trauma centers.

    “We appreciate the excellent care provided by these trauma surgeons. However, at this point, we believe the time is right to bring the program in house so we can continue to grow and enhance it,” Main Line said in an email.

    Main Line declined to say how many surgeons it had already hired. It can’t hire the Jefferson surgeons for contractual reasons, it said.

    Jefferson declined to comment.

  • Nursing homes got more Medicaid money out of Pennsylvania’s new budget

    Nursing homes got more Medicaid money out of Pennsylvania’s new budget

    Pennsylvania’s new budget has two significant changes for nursing homes.

    In a long-sought victory for the nursing-home industry, lawmakers altered how the Medicaid long-term care budget is set, increasing the state’s share of nursing home funding by $162 million next year.

    Lawmakers also amended the formula used to calculate whether nursing homes are complying with a 2022 law that required them to devote 70% of their expenses to resident care. The changes will make it easier to comply.

    Change to 20-year-old Medicaid funding rule

    For two decades, Pennsylvania Medicaid has paid nursing homes less than their audited costs, according to Michael Jacobs, CEO of the Pennsylvania Health Care Association, a trade group for nursing homes and other long-term care providers.

    In 2005, when lawmakers decided they could only afford to pay nursing homes 95% of their costs, the measure was supposed to be temporary. But 20 years later, what was called the “budget adjustment factor” remains in place. The gap between funding and audited costs grew to 20% from 5%, Jacobs said.

    This year, lawmakers agreed to raise the factor from 80% to 86% of costs and guarantee that it won’t drop below that level for two years.

    “It’s a monumental victory for long-term care to get predictability and stability by putting in a floor,” Jacobs said.

    That translates to a $162 million increase in state funding next year. (The change takes effect Jan. 1, because that’s when the fiscal years for Medicaid insurers begins.)

    The floor on the budget adjustment factor “provides much-needed resources and stability to help nursing homes recruit and retain the experienced caregivers residents depend on,” Matt Yarnell, president of SEIU Healthcare Pennsylvania, said in an email.

    “Now it’s critical that nursing home operators put these additional resources where they belong: into the quality of care for residents and into the frontline workforce,” said Yarnell, whose union represents thousands of nursing home workers.

    Including a federal match of more than $200 million, nursing homes are expected to see a roughly $20 to $25 per day increase for residents with Medicaid, Jacobs said. He did not provide a percentage for the total state and federal increase.

    Current minimum daily Medicaid rates range from $236.56 for Burgh Care Center in Pittsburgh to $573.92 for Fox Subacute in South Philadelphia, which specializes in caring for patients who need ventilators to breathe, according to state data.

    A new formula for calculating 70% rule

    In 2022, Pennsylvania became the fourth state to require nursing homes to devote a specific percentage of expenditures to resident care. Pennsylvania’s law set the threshold at 70%, with fines for nursing homes that didn’t comply.

    When the state Department of Human Services began evaluating nursing homes under the new law, the analysis resulted in what the agency described last year as “distorted” penalties that it considered “inconsistent” with the intent of the law, known as Act 54 of 2022.

    The agency found a lack of consistency in how nursing homes were reporting expenses. Some facilities, “mistakenly reported items that would be considered costs for resident care and services as administrative operating costs,” making it seem like they owed big fines, the agency said.

    The original formula for overall costs also included things over which the nursing home operators had no control. Examples are property taxes, a nursing-home assessment, and depreciation. These items elevated total costs, making it harder for nursing homes to comply with the 70% rule.

    The new law excludes those items from total expenses. Rent, which is often paid to related parties and has been found to be inflated in some cases, remains part of total costs.

    One expense — excess administrative costs — was added to the new formula. That figure frequently topped $1 million per nursing home last year, according the cost report data.

    Jacobs welcomed the formula changes, saying the industry was particularly interested in removing nursing home assessments and property taxes from total costs.

    “We’re happy to be held accountable for the dollars that are being paid to the facilities and making sure they go where they need to be,” he said.

  • A Penn Medicine employee shuttle was struck by a car and knocked on its side early Friday in South Philly

    A Penn Medicine employee shuttle was struck by a car and knocked on its side early Friday morning in South Philadelphia, police said.

    One passenger was initially in critical condition, but has since been upgraded to stable, Philadelphia police said.

    The van was transporting 11 employees, plus the driver, the University of Pennsylvania Health System said. All were taken to hospitals for evaluation and treatment, Penn said, but other details on the passengers’ conditions was not provided.

    The white Ford van was traveling east on Reed Street when a red Honda Civic Sport traveling south on South Christopher Columbus Boulevard struck the front driver’s side.

    The impact caused the van to spin and tip onto the driver’s side, before stopping near train tracks in the road’s median.

    The incident remains under investigation, police said.

  • Jefferson, Nemours, Temple, and St. Chris are exploring alliance to support the North Philadelphia children’s hospital

    Jefferson, Nemours, Temple, and St. Chris are exploring alliance to support the North Philadelphia children’s hospital

    Three major Philadelphia-area health systems are exploring an alliance to support financially struggling St. Christopher’s Hospital for Children in North Philadelphia, its leaders announced Wednesday.

    The proposed alliance would involve Nemours Children’s Health, Jefferson Health, and Temple Health, a St. Chris statement said.

    St. Chris’ ownership would not change from the current 50-50 partnership between Drexel University and Tower Health.

    Under the alliance, Wilmington-based Nemours would provide highly advanced, or tertiary, care. Nemours is Jefferson’s primary pediatric partner in the Philadelphia area.

    The preliminary agreement announcement provided no timeline to form the alliance. It also did not mention specific financial support for the North Philadelphia institution, which has received millions from local health players following a 2019 bankruptcy and steep losses during the pandemic.

    St. Chris’ board chair, P. Sue Perrotty, said the 150-year-old hospital will remain a “gateway” to care for families.

    “Our goal is to preserve what makes St. Christopher’s so special while strengthening our operations, so our community-focused mission will endure,” she said.

    “Whether care is delivered at St. Christopher’s or through our partners when clinically appropriate, our team will continue to coordinate every step of a patient’s journey, providing families with a seamless experience and a trusted guide throughout their child’s care.”

    Beyond the critical health services St. Chris provides, the institution also plays a vital part in medical education for area medical schools, including those at Drexel, Thomas Jefferson University, Philadelphia College of Osteopathic Medicine, and Temple University.

    It serves as a safety net for healthcare in some of Philadelphia’s lowest-income communities. About 85% of its patients in recent years have been insured by Medicaid, the highest percentage of any children’s hospital in the nation, according to St. Chris.

    Twice in the past four years, a coalition of Philadelphia nonprofits provided financial lifelines for St. Chris.

    Children’s Hospital of Philadelphia, Jefferson, Temple, Philadelphia College of Osteopathic Medicine, Independence Health Group, and private donors provided $50 million over two years starting in 2022. Two years later, the same group, minus Independence, contributed another $30 million.

    Jefferson and Temple were also part of a consortium that considered bidding for St. Chris in 2019 during its parent company’s bankruptcy. They backed out before the auction, which Drexel and Tower won with a $50 million bid.

    Nemours spokesperson Shelley Meadowcroft said there was no financial support included in the agreement.

    Nemours in recent years has lost affiliations with Main Line Health and ChristianaCare to CHOP. The alliance will strengthen “access to high-quality pediatric care in our region,” she wrote in an email.

    “This collaboration also strengthens Delaware’s role in pediatric care by positioning Nemours Children’s Delaware-based clinical operations as a central hub for advanced specialty care, education, and innovation,” she added, “while supporting the long-term strength and mission of St. Christopher’s Children’s Hospital and the communities it serves.

    In a statement, Temple University officials characterized the agreement as “non-binding letter of intent” to form an alliance “in support of St. Chris and its future.”

    “The proposed alliance reflects a shared commitment to securing a future for St. Christopher’s while preserving the mission, clinical excellence and community role that have made the hospital a resource for children and families in Philadelphia and across the region,” officials said.

  • $617 million in tax-free bonds for sale of South Jersey’s Advantage Behavioral Health blur private equity, nonprofit lines

    $617 million in tax-free bonds for sale of South Jersey’s Advantage Behavioral Health blur private equity, nonprofit lines

    A newly created nonprofit wants to borrow $617 million through tax-free bonds to buy Advantage Behavioral Health, a fast-growing South Jersey behavioral health company.

    The current owner, a Connecticut private equity firm called Clearview Capital, isn’t walking away from Advantage, which it bought 15 months ago.

    Clearview Capital and current executives will continue to own the for-profit entity that manages Marlton-based Advantage, according to a preliminary bond offering statement filed late last month.

    Advantage’s proposed sale to a nonprofit called QCF Advantage LLC is noteworthy for mixing for-profit and nonprofit business interests. It would make a private-equity company a key partner in a nonprofit organization with financing from the tax-exempt municipal bond market.

    Advantage’s sale price is about $520 million. That price includes $80 million being held back to see if Advantage hits profit targets after the sale. The company had $141.6 million in revenue in the 12 months that ended May 31. Most of the remaining money from the bond sale will go into reserve funds.

    Like many other mental health service providers, Advantage does not accept Medicare or Medicaid. Taking only private insurance and out-of-pocket payments helps Advantage register strong profit margins amid growing demand for mental health and addiction services.

    The transition to nonprofit ownership creates “a structure that’s designed for long term stability, reinvestment, and patient care,” James D. Golden, CEO of QCF’s parent company, told prospective investors in a recorded presentation.

    “We can provide an efficient exit to private capital,” he said in the recording, published June 30 on a website that tracks documents related to the municipal bond market. “Tax-exempt financing is really the mechanism that makes all that possible.”

    That financing will leave Advantage with an extraordinarily large debt load, said Robert Q. Kreider, a former nonprofit CEO who has no ties to Advantage. He noted that debt of that size requires continued strong growth to make the debt payments and have enough money to continue growing.

    “The bondholders are getting such a juicy rate, they’re willing to accept the risk,” said Kreider, a consultant and former CEO of Devereux Advanced Behavioral Health.

    Officials at Clearview Capital, Advantage, and QCF Advantage did not respond to requests for interviews.

    Advantage’s founding and growth

    Advantage has expanded to Pennsylvania and six additional states beyond New Jersey since its founding in 2017.

    It initially provided intensive outpatient therapy through a business called Victory Bay in Laurel Springs.

    It launched a telehealth version of its services, called Harmony Bay, in 2020. Outside of New Jersey, Advantage uses Harmony Bay as a way to build a presence in a new state, before introducing in-person services through Victory Bay.

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    Advantage also operates 17 sober-living houses under its Dignity Hall brand in Blackwood, Laurel Springs, Sicklerville, and several other South Jersey towns.

    The average daily census of patients at Victory Bay has soared over the last five years to 805 in the three months that ended June 30, from 81 in the first quarter of 2021, according to data in the bond disclosures. The company employs more than 700.

    Despite the expansion to Massachusetts, Florida, Indiana, Maryland, Ohio, and California, the services provided in a string of buildings along Chews Landing Road in Laurel Springs accounted for 55% of revenue, most of the company’s cash flow last year.

    One of Advantage’s founders was a former staffer for Gov. Chris Christie.

    The parking lots at several of those buildings were packed last Thursday. As part of the bond financing, 20 New Jersey properties valued at $14.4 million are being mortgaged.

    New projects are under development in Absecon and Pine Brook, N.J.; Scranton, Pa.; and Lancaster, Ohio, the bond prospectus said.

    A nonprofit buyer as a vehicle for private equity sales

    QCF Advantage was created in April to acquire Advantage.

    Owner QCF/I Inc., a tax-exempt organization based in Houston, acquires healthcare facilities that can be paid for with tax-exempt financing, according to its 990 tax form. Founded in 1997, QCF stands for Quality Care Foundation.

    “We’re a nonprofit focused on improving the quality of care in the behavioral health industry. We believe mental health is one of the most persistent, complex, and costly challenges in our country today,” Golden told prospective bond investors.

    QCF/I’s niche is buying for-profit businesses, often from private equity firms, while giving the sellers the option to keep managing the business, he said.

    In the Advantage arrangement, QCF/I will collect 2.25% of revenue for administrative services — to be paid before bondholders.

    Clearview Capital, the current private equity owner, will stay involved through an existing management entity that will collect 5% of monthly revenue under an initial 15-year contract.

    Golden and Richard T. Needham together form QCF’s board. They have a background in private equity at a Houston private equity firm called Domain Capital Partners that is not related to Clearview. The phone number on the 990 led to a voicemail box that was full. A voicemail at Domain Capital got no reply.

    QCF’s other businesses include a psychiatric hospital in Las Vegas and an addiction treatment center in North Jersey.

    Surging debt load

    Advantage had about $6 million in long-term debt at the end of 2024, three months before its sale to Clearview for an undisclosed price.

    A year later, the debt totaled $52.5 million, not including a $10 million line of credit.

    If the bond sale happens as expected, the company’s long-term debt would skyrocket to $604 million at the end of this year, according to the bond document.

    That large debt means the success of QCF Advantage depends on continued dramatic growth in revenue and profits, according to a deal summary from Stacy DiStefano, CEO of Consulting for Human Services, a Philadelphia-based advisory firm.

    Advantage’s projected annual interest expense is $42.7 million. For context, that’s about the same as the combined $42.2 million in interest paid last year by three large unrelated health systems in the same South Jersey market, Cooper University Health Care, Inspira Health Network, and Virtua Health.

    Colin Studwell, Advantage’s CEO, said during the investor presentation available on Munios.com that the company is well-positioned for strong growth. He credited the management entity, known as a management services organization, or MSO, that Clearview and executives, including Studwell, already own.

    Studwell will continue to run the MSO, which handles operations support, billing, collections, human resources, information technology, and everything else it takes to run the business.

    “Our MSO capabilities are the engine which allow us to continue to scale our services and treat more patients without any decay in clinical or operational efficiency,” Studwell said.

  • Leonard Abramson, founder of U.S. Healthcare and prolific philanthropist, has died at 93

    Leonard Abramson, founder of U.S. Healthcare and prolific philanthropist, has died at 93

    Leonard Abramson, 93, of Jupiter, Fla., a former pharmacist, founder, chair, and chief executive officer of U.S. Healthcare Inc., author, trustee emeritus at Johns Hopkins University, and one of the world’s most generous cancer research and clinical care philanthropists, died Saturday, July 4, of age-associated decline at his home in Blue Bell, Montgomery County.

    Born and reared in the Strawberry Mansion section of Philadelphia, Mr. Abramson earned degrees at Pennsylvania State University and the old Philadelphia College of Pharmacy. He worked as a pharmaceutical salesperson, pharmacist, and hospital management executive in the 1960s, founded U.S. Healthcare in 1975, and nurtured the company into one of the country’s first and largest health maintenance organizations.

    “Abramson accurately predicted the need for prepaid medical plans to manage spiraling medical spending in the ’60s and ’70s and founded U.S. Healthcare to capitalize on this opportunity,” officials at Harvard Business School said when they named him one of their Great American Business Leaders of the 20th Century.

    Under Mr. Abramson, U.S. Healthcare was known for promoting childhood immunizations, mammograms for older women, reduced fees to specialists, and shorter hospital stays. He championed strict standards and accountability for medical professionals, and criticized those who abused a healthcare system then rife with loopholes.

    Mr. Abramson “was a brilliant man whose leadership and vision made the company truly exceptional,” a former colleague at U.S. Healthcare said in a tribute.Larry Price / Staff Photographer

    He wrote Healing Our Health Care System in 1990, and told The Inquirer: “If industry leaders know there are solutions, they’re going to call for them. Innovation leads to emulation.” In 1996, he sold U.S. Healthcare to Aetna Life & Casualty Co. for $8.9 billion, established the Abramson Group, and consulted for Aetna and other companies.

    “He was a brilliant man whose leadership and vision made the company truly exceptional,” a former colleague at U.S. Healthcare said in a tribute. Another said: “He encouraged a commitment to customer service that stayed with me throughout my career.”

    Routinely one of the highest-paid CEOs in the Philadelphia region, Mr. Abramson was a “low-profile, soft-spoken executive who rarely raised his voice in public,” Inquirer business writer Peter Binzen said in 1990. A former colleague at U.S. Healthcare said: “I never worked for a better man.”

    As a philanthropist, Mr. Abramson and his wife, Madlyn, established the Leonard and Madlyn Abramson Family Foundation in 1996 and donated more than $140 million to the University of Pennsylvania’s Perelman School of Medicine and the Penn Medicine network. In 2002, Penn Medicine renamed its main cancer facility in University City the Abramson Cancer Center.

    This article and photo of Mr. Abramson appeared in The Inquirer in 1990.Newspapers.com

    In a tribute, officials at Penn said he “touched countless lives across the world through his generosity, compassion, and leadership.”

    Mr. Abramson and his wife also funded the Madlyn and Leonard Abramson Professorship in Clinical Oncology at Perelman, the Abramson Family Cancer Research Institute, the Abramson Family Professorship in Sarcoma Care Excellence, and the Abramson Family Professorship in Anesthesiology.

    At Children’s Hospital of Philadelphia, they supported the Leonard and Madlyn Abramson Pediatric Research Center and a pediatric emergency department at CHOP’s hospital in King of Prussia. In 2013, they donated $10 million to fund scholarships at the Temple University dental school.

    They also financed the Madlyn and Leonard Abramson Center for Jewish Life senior living center in North Wales, Abramson Senior Care in Jenkintown, the Abramson Senior Care Foundation, and other groups. At Johns Hopkins in Baltimore, they endowed a professorship in neurodegenerative diseases.

    Mr. Abramson and his wife, Madlyn, married in 1957.

    Mr. Abramson’s wife, a cancer survivor, died in 2020, and he donated $10 million in 2021 to establish an endowed chair of cardiac surgery in her honor at Jupiter Medical Center in Florida. He was an honorary trustee for the Brookings Institution, trustee emeritus for Johns Hopkins, board member for many organizations, and a supporter of Project HOME for affordable housing.

    Friends and former colleagues called him a “caring humanitarian,” “a class act,” and “a visionary” in online tributes. One longtime friend said: “Leonard’s kindness and generosity made a difference in the lives of countless individuals.”

    Madlyn K. Abramson, whose philanthropy helped cancer patients, seniors, and educational institutions, has died at 84

    Leonard Abramson was born Nov. 12, 1932. He graduated from Northeast High School and drove a cab to help pay his way through pharmacy school.

    “Not too many people started off with less than I did,” he told Forbes magazine in 1994.

    Mr. Abramson (center) enjoyed time with family and friends. Courtesy of the family

    He met Madlyn Kornberg in college through a mutual friend, and they married in 1957. They had daughters Marcy, Nancy, and Judy, and lived in Blue Bell, Jupiter, Fla., and Camden, Maine.

    Mr. Abramson enjoyed boating, golf, and painting. “He was multifaceted,” his daughter Judy said. His daughter Nancy said: “He was extremely family oriented.”

    Why did best-selling author Carol Saline email The Inquirer’s obit writer?

    He told The Inquirer in 1990: “I’ll never retire.” He never really did.

    In addition to his daughters, Mr. Abramson is survived by nine grandchildren, two great-grandchildren, and other relatives.

    This book by Mr. Abramson was published in 1990.Leonard Abramson

    A memorial service is to be held later.

    Donations in his name may be made to the Abramson Cancer Center at the Hospital of the University of Pennsylvania, 3535 Market St., Suite 750, Philadelphia, Pa. 19104, and Philly Fights Cancer, Box 9, Wynnewood, Pa. 19096.

  • Rothman Orthopaedics is refocused on Philly region, opening three new surgery centers

    Rothman Orthopaedics is refocused on Philly region, opening three new surgery centers

    Rothman Orthopaedics plans to open three new surgery centers over the next year and keep adding doctors in its Philadelphia-area market, as the large physician-owned group refocuses growth efforts on its original territory.

    “Our biggest priority in the near term is strengthening our core business here, in Southeastern Pennsylvania and New Jersey,” Rothman CEO Christian Ellison said. “We’re not gonna ignore opportunities. We’ll be opportunistic around things that make strategic sense.”

    The new approach comes after a now abandoned effort to break into the New York market, first in a partnership with Northwell Health in 2017 and then with NYU Langone Health. That foray ended last year with the sale of Rothman Orthopaedics of Greater New York and its three locations to NYU Langone.

    Rothman has seen more success after following the lure of fast population growth to Florida, where it opened offices in the Orlando area in 2020 in partnership with AdventHealth.

    “Florida has been a big success, because we’ve had the partnership down there with Advent Health that’s been kind of mutually beneficial,” said Ellison, who became Rothman’s CEO last fall.

    The Philadelphia draw

    The practice headquartered in Center City already has 24 locations in the Greater Philadelphia market. That number includes facilities that Rothman operates in partnership with Jefferson Health, Main Line Health, AtlantiCare, and RWJ Barnabas.

    Rothman located its newest office in West Chester, an area where Rothman had little market share, according to Ellison. He also sees opportunity in other parts of the Philadelphia region and contiguous markets.

    To make that growth possible, Rothman is partway through an effort to hire 41 physicians by the end of this year. That represents a 20% increase and will bring Rothman’s total to 214 physicians, the company said.

    The need for ambulatory surgery centers

    Rothman is a partner in nine surgery centers in Pennsylvania and New Jersey and two surgical hospitals (Rothman Orthopaedic Specialty Hospital in Benslam and Physicians Care Surgical Hospital in Limerick).

    Those outpatient facilities account for nearly two-thirds of Rothman’s surgeries. Even the surgical hospitals function primarily as ambulatory centers, Ellison said. The remaining third of surgeries takes place in acute-care hospitals.

    “We are challenged for operating room capacity right now, both in the acute care hospitals, as well as in our ASCs, and so we feel like we need to bring more operating rooms online,” Ellison said.

    What’s more, Medicare and private insurers want more procedures done in lower-cost surgery centers. In the future, insurers will pay the same price for an outpatient knee replacement whether its done in a hospital of freestanding surgery center, Ellison predicted.

    Rothman hasn’t finalized locations for the new surgery centers, but Ellison said he expects two to be in Southeastern Pennsylvania and one in New Jersey. The centers will likely be in areas where Rothman has an established patient base.

    The physician group prefers to open the new centers independently, as opposed to going through partnerships like it has historically. “We think we’re uniquely positioned to manage that patient experience in the surgical environment,” Ellison said.

  • How much did Philly-area nonprofit health system CEOs make in 2024?

    How much did Philly-area nonprofit health system CEOs make in 2024?

    Jefferson’s Joseph G. Cacchione ranked as the highest-paid CEO at the Philadelphia region’s nonprofit health systems in 2024, with total compensation of $7 million, according to The Inquirer’s annual review of public tax forms.

    Madeline Bell at Children’s Hospital of Philadelphia collected $5.5 million in 2024, giving her the number two spot.

    Both also were top earners in The Inquirer’s 2023 compensation analysis. Jefferson is the largest system based here, both by revenue and number of hospitals, with 33 stretching from South Jersey to near Scranton. CHOP is among the nation’s top-ranked children’s hospitals.

    Janice Nevin at ChristianaCare joined the ranks of the top five. She received $3.5 million, about the same pay as the region’s fourth highest earner, Al Maghezehe at Capital Health, which has a network of outpatient clinics in Bucks County and two hospitals in Mercer County. Maghezehe’s compensation stands out because Capital had by far the lowest revenue among the systems with the 10 highest-paid CEOs.

    A couple of CEOs who left their positions before 2024 continued collecting long-term compensation, as is common in the industry.

    Most notably, Jefferson’s former CEO Stephen K. Klasko collected just over $1 million in 2024. He retired at the end of 2021, but remained an adviser through June 2022. The 2024 payment brought his total through 2024 to $48.7 million for 8½ years as CEO.

    Lori Herndon left AtlantiCare in June 2023. Her compensation the following year was $1.3 million.

    Other CEOs left during 2024, making it possible they will be listed in the next round of 990s. Those executives include Donald Mueller at St. Christopher’s Hospital for Children, Michael Laign at Redeemer Health, and Ronald W. Johnson at Shore Medical.

    Here’s a look at the numbers from The Inquirer’s review of the latest 990 tax returns of 20 nonprofit health systems, covering 11 health systems with operations concentrated in Southeastern Pennsylvania, seven in South Jersey, and two in northern Delaware:

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  • NovaCare Rehabilitation’s parent, Select Medical, was sold in $3.9 billion private equity deal

    NovaCare Rehabilitation’s parent, Select Medical, was sold in $3.9 billion private equity deal

    NovaCare Rehabilitation’s parent company, Select Medical Holdings Corp., was taken private in $3.9 billion private equity deal this week.

    NovaCare has more than 100 physical therapy locations in the Philadelphia region, including some through a partnership with Rothman Orthopaedics.

    For 25 years, NovaCare sponsored the Philadelphia Eagles practice complex in South Philadelphia. Jefferson Health took over the sponsorship this year.

    Top management joined private-equity firm Welsh, Carson, Anderson & Stowe in the acquisition of Select Medical, which is based in Mechanicsburg, Pa. The sale was completed Wednesday. The price per share was $16.50 per share, an 18% premium to the latest close before the deal was announced in November.

    In addition to outpatient physical therapy through NovaCare and other subsidiaries at 1,850 locations in 36 states, Select Medical operates 104 long-term acute-care hospitals in 28 states and 38 rehabilitation hospitals in 15 states. The company has more than 45,000 employees and had $5.5 billion in revenue last year.

    Select Medical acquired NovaCare in 1999. Publicly traded NovaCare fell on hard times because of Medicare reimbursement changes under the federal Budget Reconciliation Act in 1997. The law capped reimbursement for speech, physical, and occupational therapy in nursing homes.

    The company, then headquartered in King of Prussia, lost $700 million in annual revenue because of those changes, The Inquirer reported at the time.