Fight to Save Sharon Hospital Awaits Tuesday Hearing

SHARON, Pa. – Mercer County Commissioner Timothy M. McGonigle was born at Sharon General Hospital in 1966, he said, long before the nonprofit community hospital fell into the hands of Steward Health Care System.

Sharon General later became Sharon Regional Medical Center.

As the owner of McGonigle Ambulance Service, which has contracts with the hospital, McGonigle is reluctant to comment on any pending sale – or closure. But he is concerned about the potential loss of so many hospital beds, saying it would be a “major blow” both for Mercer County health care and regional employment.

“I will be clear when I say that it’s a shame that corporate greed has delivered this blow to our community hospital and after reading the recent reports of what went on amongst the shareholders,” McGonigle said. We never should have sold our hospital to a for-profit organization.”

A hearing is set for Tuesday, at which time Steward’s attorneys will update U.S. Judge Christopher Lopez on efforts to sell the Sharon hospital, as well as Trumbull Regional Medical Center in Warren and Hillside Rehabilitation Hospital in Howland.

Steward Health Care filed Chapter 11 bankruptcy May 6, a move U.S. Sen. Elizabeth Warren of Massachusetts has called “the direct consequences of Wall Street private equity vultures looting our health care system.” Massachusetts has more Steward-owned hospitals than any other state; two of them are slated to close this month.

Local officials hope their hospital, which has served the community for generations, won’t be next.

“We are fully engaged in exploring every pathway possible to keep this hospital open because we understand the importance of those 60 hospital beds and nine operating rooms and the mental health beds, as well as the approximate 750 jobs,” said state Sen. Michele Brooks, R-50th. “And while I’m not at liberty to go into the intricate details, I want to assure everyone that everything possible is being done. … Every avenue is being explored to keep the hospital open, to maintain the hospital beds, as well as the jobs.”

Sharon Regional Medical Center is the only Steward-owned hospital in Pennsylvania. Local leaders and Pennsylvania Attorney General Michelle Henry have taken steps to prevent its closure.

Bob Lackey, a local attorney who represents the Christian H. Buhl Legacy Trust, said their cause has found good partners, including Henry, who joined the Buhl Trust in the filing of an objection to the planned sale of the hospitals.

The Buhl Trust operated the hospital from 1892 to 2014, when it sold its operating assets and 54 real estate parcels to Community Health Systems. In February 2017, CHS sold to Steward, which signed a sale leaseback deal with Medical Properties Trust for the real estate.

Buhl and the attorney general argue that the leaseback deal was never disclosed. When Buhl sold the hospital in 2014, the trust retained the rights to approve any sales of real property for a period that had not expired when Steward bought the hospital.

U.S. Bankruptcy Judge Christopher Lopez has ruled Steward can reject all the leases with MPT. It remains unknown how much liquidity MPT ultimately will extract from Steward.

Lackey said MPT basically has tenants or squatters on its hospital properties from whom it cannot collect rent. And it’s because of the leaseback that any entity interested in buying the Sharon hospital has backed off.

Moreover, Steward’s hospitals have been bled to near death, starved of cash while it appears the investors and venture capitalists were making money, the Buhl attorney said.

The actions of Steward and CEO Ralph de la Torre have led to a U.S. Senate investigation by the Health, Education, Labor and Pensions Committee, which subpoenaed de la Torre to appear Sept. 12. It remains unclear if he will appear.

Lackey also has concerns about the worse-case scenario – the closure of Sharon Regional.

“If the judge says on Aug. 13 that Steward does not have to operate the hospital anymore, the attorney general either has to produce somebody who will, on terms acceptable to the court, or go along with the closure,” Lackey said.

Financial Struggle

According to the Pennsylvania Health Care Cost Containment Council, which has been analyzing hospital financial statistics since 1989, Sharon Regional had an operating margin of -20.05% as of June 2023. But the local UPMC hospitals are struggling too. UPMC Horizon’s margin was -1.55%, and UPMC Jameson was 11.48%.

In July, the Center for Healthcare Quality and Payment Reform reported more than 30% of rural hospitals across the country are at risk of closing because of financial problems, including 13 in Pennsylvania. Of those, seven are at immediate risk. The report says insurance companies failing to pay enough to cover services is a key factor.

According to the Pennsylvania Department of Labor and Industry Center for Workforce Information & Analysis, Sharon Regional was the sixth-largest employer in Mercer County in the fourth quarter of 2023. It was just behind fifth-ranked UPMC Horizon.

Sharon Regional employs 700, down from 1,800 at its peak.

For every hospital job that could be lost, the chief financial officer of the Buhl Trust estimates 1.2 additional jobs would be lost, Lackey said.

Efforts to boost the city of Sharon also would be diminished if the hospital closes, Lackey said. If there are empty medical buildings and weeds in the parking lots, other nearby real estate would suffer.

While most small towns of any size had a community hospital 50 years ago, Lackey said he believes many people and cities began to take them for granted and failed to protect them.

“Your community has to understand that neither the state nor the feds will ever generate enough reimbursement to make ends meet,” he said. “Therefore, your community must decide that your hospital is as valuable as your police force, your fire department, your ambulance people, your schools. A good, well-run local hospital is a vital part of the community.”

And as local hospitals close, one should consider that a pandemic could swamp what local health care remains, Lackey said.

Brooks, who lives in northern Mercer County, said she knows firsthand how far some in her area are driving for medical care.

When a life-threatening situation happens and seconds count, distance is a big factor.  

She believes the entire community must come together to save the hospital, including the Buhl Regional Health Foundation, which was set up as a separate entity by the Buhl Trust for the money to go after the hospital was sold and billing dollars continued to come in.

“I also would want to emphasize that I think everyone understands the importance of the hospital being put into a nonprofit instead of a for-profit,” Brooks said.

As the bankruptcy case unfolds, those who provide care at Sharon Regional Hospital deserve recognition. Lackey said the patient care ombudsman reported many positives at Sharon Regional, a sign that employees are doing a good job with the limited resources and the situation they were dealt.

The constant threat of closure can cause what Lackey calls “a cloud” and lead to the loss of good doctors, nurses and staff. But he credits the hospital’s president, Robert Rogalski, with doing “an excellent job of maintaining staff morale.”

“I do want to emphasize none of this would be possible and we would not even be having this conversation if it wasn’t for the dedication and commitment of the entire staff at Sharon Regional Hospital,” Brooks added. “There’s a genuine opportunity to turn this into a success story, and that’s going to take the entire community and everyone working together to keep this hospital open.”

Copyright 2024 The Business Journal, Youngstown, Ohio.