Socialist Alternative

Profiteers Plunder Philly Hospital: Working-Class Fightback Needed

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When you buy a hospital (how relatable!), you enter into an unwritten social contract to provide health care to the community the hospital serves. This contract was deceitfully signed by American Academic Health Services CEO Joel Freedman in 2017 when he bought Hahnemann University Hospital in Philadelphia for $170 million. On June 26, 2019, he shredded that contract when he announced the hospital would close abruptly and filed for bankruptcy. Under Freedman’s direction, the hospital lost $3-5 million a month and churned through executive leadership, spawning rumors of its imminent closure and further destabilizing its financial position. In reality, the crisis at Hahnemann is the logical conclusion of the for-profit health care system, consciously engineered by the gangster profiteers at the helm.

Prime Real Estate

Philadelphia is a rapidly gentrifying city. While its stock of luxury condominiums expands, thousands of units of affordable housing are lost each year. Hahnemann covers several full blocks of prime Center City real estate. AAHS had a plan for Hahnemann when they bought it, and it did not involve running a safety net hospital serving the health care needs of the uninsured and underinsured at all. Instead, AAHS and Joel Freedman deliberately ran Hahnemann into the ground. Then they refused to open the books, cooperate with city or state officials attempting to facilitate negotiations, or accept any offers to buy the hospital, even profitable ones. This all exposes the truth: Joel Freedman’s task was to clear the path for further Center City gentrification by destroying the venerated 177 year old hospital that stood on the site billionaire developers wanted for luxury condos, an upscale hotel or even the elusive Center City casino.

Profit Has No Place In Health Care

Considering Philly’s already-overflowing ERs and record-long wait times, a growing population, and the next nearest hospitals located several miles away, the threat of Hahnemann’s closing and the potential for thousands of displaced patients constitutes a public health emergency. As one of Philadelphia’s most accessible “safety net” hospitals, Hahnemann’s Emergency Department treated between 40,000 and 60,000 patients per year and was the network hospital for the public city clinic system. In fact, half of its patients are on Medicaid, two-thirds are black or brown, and many are unable to get the treatment they need anywhere else in the city. Safety net hospitals simply are not a profitable business.

The leadership of the union representing the 800 registered nurses at Hahnemann, PASNAP, had participated in months of closed-door sessions with Governor Wolf and Mayor Kenney and repeatedly received assurances that Hahnemann was too big to fail. When Freedman announced the closure, the union launched a public campaign to keep the hospital open and operating safely.  PASNAP organized a series of daytime demonstrations at the hospital which brought out patients, physicians, community organizations, Democratic politicians, union members and representatives from other city unions to speak about the conditions in the hospital and the crisis that closure would precipitate.

Would Medicare For All Prevent the Crisis?

PASNAP worked hard to bring Bernie Sanders—and national attention—to the crisis at Hahnemann. Sanders addressed a crowd of a thousand outside the doors of the hospital, decrying corporate greed, and linking this struggle to the need for Medicare for All. Sanders’ attendance and his campaign’s outreach to supporters to mobilize for the demonstration are a glimpse of how a working class politician could use their position to build and support struggle. It is absolutely correct for Sanders to tie this crisis to the urgent need for Medicare For All, and an end to the for-profit healthcare industry.

By guaranteeing health care coverage for everyone and by negotiating better prices on medicines, supplies and equipment, Medicare for All would both increase income and decrease costs for safety net hospitals. Even a Hahnemann on a stable financial basis may not have deterred Freedman on his mission for super-inflated real estate level profits, but it would make running Hahnemann as a safety net hospital much more realistic. 

Establishment Politics Can’t Save Hahnemann

However, Sanders did not raise the concrete steps needed for working class people to escalate both the struggle for Hahnemann, and to win Medicare for All. These demands are too big to be won through negotiations between politicians. The governor and the mayor both rebuked Freedman sharply, but all their negotiations clearly had got us nowhere except to preoccupy the union leadership which should have taken the campaign public months ago at the first hint of the planned closure. Ultimately, pressure from the unions forced Wolf and Kenney to produce a $15 million bandaid to facilitate an orderly wind-down, and potentially help to find a private buyer. Missing is one key fact: There is no for-profit basis that will keep Hahnemann alive.

The unions and even the most progressive Democratic politicians, unable to break free of the logic of capitalism, are looking for a buyer and a path toward financial stability. There is some logic to their approach: PASNAP has had past success blunting the negative impact of corporate restructuring plans for other institutions. But not this time. Freedman has done everything in his power to make Hahnemann an unattractive purchase and eliminated the possibility that any half measures would rescue health care at the site.

Public Takeover Needed

The only possible long-term solution is a public takeover of Hahnemann. City governments regularly seize property via eminent domain when deemed necessary for the public good, and Hahnemann’s closure is nothing short of a public health emergency. The executives complicit in the willful mismanagement must be removed and the 2500-person, largely union, workforce and their contracts retained. Also critical are the 500+ Drexel University medical residents and fellows for whom Hahnemann serves as a teaching hospital. (Hahnemann’s closure strikes a serious blow to Drexel’s medical program which just announced layoffs for 40% of the medical school and physician practice staff.) While the city may not be immediately equipped to run a hospital, it could employ Drexel’s services to manage the hospital on a non-profit basis until it built a capable team. 

In this eleventh hour, it will take a mass movement, led by the unions, and disrupting business as usual to force the city to take such action. The unions of the hospital workers, PASNAP and 1199C, must lead the way, but with the full support of other unions with strategic economic positions and the AFL-CIO, mobilizing their memberships and holding mass meetings for workers, patients, and community to discuss a clear, fighting plan.

The money to run Hahnemann is sitting in the pockets of the ultra-wealthy, and the fifteen Fortune 500 companies headquartered in the Philadelphia area, including Comcast, pharmaceutical behemoth AmerisourceBergen and hospital management company Universal Health Services. We need to tax the rich to raise the funds to run Hahnemann as our own. Changing tax law will require political will and organization, currently beyond the scope of even the most progressive Democrats in Philadelphia. The fight for a public hospital faces a steep political battle without a reliable, unapologetic anti-corporate party which fully backs the needs of working people every time. The campaign for such a party could be built through the fight for a public hospital, Medicare for All and social housing.

Socialists have played a leading role in every successful movement in this country’s history. Teachers from West Virginia to Los Angeles have just given all of us a refresher course on the methods that get results: well organized strikes and peaceful mass actions which disrupt the centers of economic and political power.

Socialist Alternative’s call for a public takeover got overwhelming support from staff, patients, visitors and passersby while petitioning at 6:30AM shift changes. Over 500 people signed our petition demanding that the city boot the corporate mismanagers and wrest the hospital from their clutches, taxing the rich to fund its operation. Unfortunately, no union leader or elected representative has yet been able to channel that support into a campaign equal to the challenge posed at Hahnemann.

We stand in solidarity with the workers, patients, and students who depend on Hahnemann, and we are ready to fight alongside them to keep the hospital open and serving our communities. Ultimately we should not accept an economic system in which this turn of events is not only possible, but inevitable.

We Say:

  • Keep Hahnemann University Hospital Open! For an immediate public takeover of the Hospital via eminent domain.
  • Drexel University to manage the hospital as a not-for-profit facility until the transition to a public city hospital can be completed. No cuts to the Drexel Medical School, its physician practices or residency programs and fellowships at Hahnemann.
  • Tax Comcast and the other Fortune 500 companies in Philadelphia  to fund Hahnemann’s long-term public operation.
  • City Council members use their prerogative – the power to veto the sale of city-owned real estate in their districts – to prevent for-profit health care corporations buying assets in their districts.
  • Build a national union-driven campaign for Medicare for All as a first step towards a health care system designed to produce health instead of profit.

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