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Medical Care

Commonwealth Health, Woodbridge End Scranton/Wilkes-Barre Hospital Sale

2024-11-26

In a significant turn of events, a $120 million deal to sell three Northeast Pennsylvania hospitals to a nonprofit group has fallen through. Community Health Systems Inc. announced on Tuesday that WoodBridge Healthcare Inc. will not be purchasing Moses Taylor Hospital, Regional Hospital of Scranton, and Wilkes-Barre General Hospital, which operate under CHS’ for-profit Commonwealth Health System. This development has left the local healthcare landscape in a state of uncertainty.

The Unraveling of a Promising Hospital Deal

Reasons for the Deal's Failure

The termination of the purchase agreement was primarily due to WoodBridge’s inability to satisfy the funding requirements. As stated in a CHS release, certain developments affected the expected proceeds available to WoodBridge from the issuance of publicly offered tax-exempt and taxable bonds. This led to WoodBridge’s inability to secure the necessary financing for the acquisition. WoodBridge officials had retained investment banking firm Zeigler to issue tax-exempt bonds and secure deal funding. However, despite issuing a ‘Highly Confident Letter’ in April, Zeigler was ultimately unable to sell the bonds. This has left the hospitals without a buyer and the future of their operations in doubt.The hospitals in question have been facing financial difficulties. According to the Pennsylvania Health Care Cost Containment Council 2023 fiscal year report, all three hospitals lost substantial amounts of money in fiscal year 2023. Wilkes-Barre General, with 369 beds, was the largest of the three, followed by Regional Hospital of Scranton with 186 beds and Moses Taylor with 122 beds. Expenses outpaced revenues by 24.1% at Moses Taylor, 15.7% at Wilkes-Barre General, and 9.5% at Regional. These financial challenges have made it difficult for the hospitals to attract potential buyers and secure the necessary funding.

Impact on the Local Community

The news of the deal’s failure has been met with disappointment and concern from the local community. Scranton Mayor Paige Cognetti, who herself relied on Moses Taylor for the birth of her two daughters in the past five years, called the news “disappointing and troublesome.” She pointed out that the city’s police and fire departments make many daily trips to the hospital’s Scranton emergency room with people they serve on their beats. The idea of losing this emergency room is a cause for concern. While CHS has not publicly mentioned closing any emergency rooms or other facilities connected with the three hospitals, the company’s pattern of disinvestment raises questions. Since 2020, the company has sold off or announced the sale of dozens of hospitals nationwide, including Berwick Hospital in 2020 and Tyler Memorial in Tunkhannock and First Hospital Wyoming Valley in Kingston in 2022. This pattern has led Mayor Cognetti to assume that CHS is not going to start investing in these hospitals.State Rep. Bridget M. Kosierowski (D-Waverly) has been leading efforts to find new ownership for the facilities. As a nurse and lifelong resident of Lackawanna County, her top priority is ensuring that the healthcare services their community depends on remain accessible and high-quality. She will continue to monitor the situation closely and advocate for solutions that prioritize patient care and the community’s health.

Details of the Hospitals and the Parties Involved

Tennessee-based Community Health Systems Inc. is a publicly traded, for-profit company. Its subsidiaries own or lease 69 affiliated hospitals in 15 states. WoodBridge Healthcare, on the other hand, is a Bucks County-based nonprofit previously described as a “hospital turnaround firm.” The proposed deal with WoodBridge Healthcare was announced in July, but it has now fallen through. The hospitals involved in the deal include Moses Taylor Hospital, Regional Hospital of Scranton, and Wilkes-Barre General Hospital, which operate under CHS’ for-profit Commonwealth Health System. These hospitals provide a wide range of services, including ambulatory surgery centers, emergency departments, imaging centers, laboratories, outpatient rehabilitation, sleep care centers, walk-in clinics, and wound care centers, as well as a physician network. The loss of these hospitals would have a significant impact on the local healthcare system and the community they serve.

Dave P., with an extensive career spanning over 30 years, has made significant contributions in various fields. His expertise lies in journalism, marketing, and public relations, with a particular focus on hospitals, healthcare technology, and Catholic communications. He has also dedicated himself to fundraising communications, skillfully ghostwriting for CEOs of local, national, and global charities, nonprofits, and foundations.

Unparalleled 30-Year Career in Communication

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In my previous reports on the difficulties of integrating AI into healthcare, a consistent theme emerged - the essential requirement for researchers to uphold patient confidentiality when dealing with clinical data. While this data is valuable for training AI, it may directly identify an individual or lead to reidentification from anonymized sources. A related issue is that systems trained on datasets lacking patient diversity tend to provide more accurate and detailed results for the majority group but less so for minorities. Clearly, this poses a problem when researching treatments that should be effective for all. As explored in my October 2024 report on AI and medical devices, the same problem extends to technologies predominantly designed, tested, and calibrated within a dominant group of data subjects, potentially leading to less accurate readings for others. Optical sensors are one such tool. My October report examined pulse oximeters commonly used in blood oxygen testing, which gave less accurate readings for people with darker skin tones. During the COVID pandemic, this might have resulted in a higher mortality rate among black and minority ethnic (BAME) patients who were sent home instead of hospitalized due to inaccurate readings.

Overcoming Challenges and Ensuring Data Safety

Using AI-Improved Data and Synthetic Data

Professor Mihaela van der Schaar, John Humphrey Plummer Professor of Machine Learning, AI, and Medicine at the University of Cambridge and Director of the Cambridge Centre for AI in Medicine, believes that AI can enhance the quality of data. Whether it's electronic health record data, data in bio banks, or clinical registries, high-quality data is crucial for AI and epidemiology. Medical data contains various errors such as complex real-world data, multimodal data that needs aggregation, and data that may be unfair, noisy, or missing informative elements. In the case of rare diseases, data may be limited or private and cannot be shared. Data also changes over time due to changing practices, demographics, or emerging diseases like COVID. With AI, we can improve data quality at every stage of model design. This includes imputing missing data, reducing noise, and dealing with "heart" examples. We can harmonize different types of datasets from various clinical trials and between them and electronic health records. At the training model stage, we can divide data into subgroups for more robust training or data-informed model selection. We can also test models using new data-centric approaches and address data shift and drift.

Addressing the Limitations of Synthetic Data

The broad area of synthetic data, along with the emerging challenge of AI training other AIs with AI-generated data, alarms some commentators. Last year, researcher Jathan Sadowski coined the term 'Habsburg AI' to describe this problem. Just as photocopying a photocopy leads to a loss of the original image, synthetic content may overwhelm human-made content online. Generative AI's 'hallucinations' also pose a problem as humans relying on AI for information may find themselves in a world of untrustworthy data. My recent report on the problem with pulse oximeters shows that synthetic data may have flaws. During the COVID pandemic, it was reported that BAME patients were at higher risk due to inaccurate readings from pulse oximeters tested mainly on white skin tones. The British government has acknowledged this problem, but no adjustments have been made. Synthetic data may amplify a majority view and overlook significant anomalies in human data. Professor van der Schaar rejects these comparisons, stating that synthetic data is a powerful creation that can improve data quality and simulate forward-moving scenarios. However, there is good and bad synthetic data, and human researchers need to be able to distinguish between them.

The Role of Clinicians in AI-Enabled Ecosystems

We hope to build an AI-empowered clinical ecosystem with various analytics. These analytics are designed and thought about by clinicians who know their needs and how to test systems. As research progresses, we need to be cautious about the emerging world of AI. By 2026, most online content is expected to be synthetic. AIs will be trained by other AIs using AI-generated data, potentially leading to a Habsburg-style future where technology refers more to itself than to humans. At this point, we need humans who can step outside the system and identify its flaws. In the meantime, diginomica will continue to report on these issues as we are only human.