WellSpan Health has expanded to the east, west and south of its base in York County. The regional health system is now poised to reach north.
- WellSpan has agreed to acquire Evangelical Community Hospital, whose leaders have been looking for a partner that could shore up its ailing finances.
- Terms of the transaction, expected to close this summer, were not disclosed.
- If regulators sign off, the deal would add a 131-bed hospital and associated medical facilities to the WellSpan network and bring the WellSpan name to Lycoming, Northumberland, Snyder and Union counties.
Why is this happening: Based in Lewisburg, Evangelical spent the last 15 months searching for a partner, according to its president and CEO, Kendra Aucker, who said the hospital’s finances are not sustainable for the long term.
- “We know that we have to do something,” Aucker said at a press conference yesterday. “We just can’t sustain the operation without having scale.”
- Evangelical had an operating loss of $29.1 million in the fiscal year ending June 30, 2023, up from a loss of $2.5 million for the previous fiscal year, according to financial disclosures to bondholders.
- Aucker attributed the results, in part, to an increasing population of patients covered by Medicare, which offers relatively low reimbursement rates.
- The financial shortfalls have led the hospital to defer investments in technology and infrastructure, she said.
- If the deal with WellSpan goes through, the York health system would plow $100 million into Evangelical over the next three years.
What’s next: A regulatory review.
- Antitrust regulators sank an earlier deal between Evangelical Community and Geisinger, though they ultimately allowed the Danville-based health system to take a 7.5% stake in Evangelical.
- Geisinger — which is being acquired by California-based Kaiser Permanente — is entitled to proceeds from a sale of Evangelical, with the amount depending on certain conditions, according to bond disclosures.
- Aucker expressed confidence that regulators would OK the deal with WellSpan. which does not have operations in Evangelical’s market.
- Evangelical was represented in the transaction by attorneys from Harrisburg law firm McNees Wallace & Nurick.
Then what: The hospital would be renamed WellSpan Evangelical Community Hospital while Aucker would join the WellSpan leadership team as head of its north region.
- During the press conference yesterday, Aucker declined to say whether there would be any layoffs but acknowledged that WellSpan would help the hospital run more efficiently while investing money to expand on opportunities in the northcentral Pennsylvania market.
- “Joining an established and successful health system where quality, safety and innovation are top priorities ensures we preserve a vibrant health care system close to home,” she said.
The background: Evangelical employs about 1,900 people at a mix of inpatient and outpatient facilities.
- WellSpan employs more than 21,000.
- Its territory covers Adams, Cumberland, Franklin, Lancaster, Lebanon and York counties, as well as parts of northern Maryland.
- WellSpan’s most recent health-system acquisition was of Chambersburg-based Summit Health.
