Bond issuance approved Tuesday marks major step toward takeover of hospitals under struggling Commonwealth Health
WILKES-BARRE, Pa. — California-based Tenor Health Foundation took a major step toward taking over Lackawanna County and Luzerne County hospitals managed by the struggling Commonwealth Health Systems by gaining approval this week to borrow tax-exempt funds to purchase Wilkes-Barre General Hospital.
The vote Tuesday night, Luzerne County Council authorizes Northeastern Pennsylvania Hospital and Education Authority to issue $47,000,000 in tax-exempt revenue bonds and $25,000,000 in taxable revenue bonds. Tenor will use the money raised by selling the bonds to Rosemawr Management to purchase Wilkes-Barre General, executives at the foundation explained in a hearing earlier this month.
Tenor Health reached a definitive agreement last month with Community Health Systems — Commonwealth’s corporate parent — to acquire Wilkes-Barre General Hospital, Regional Hospital of Scranton and Moses Taylor Hospital, as well as the associated physician practices, clinics and ambulatory surgery centers. Tenor also said it planned to hire “substantially” all Commonwealth employees in good standing, which is roughly 2,400 people.
“Every aspect of hospital operations is being looked at and reviewed and we will do what is right for this hospital and for this community,” said Radha Savitala, CEO of Tenor Health, at a Nov. 10 meeting in Luzerne County on the bond issuance.
The bond issuance is just for the purchase of Wilkes-Barre General. The Scranton hospitals, Regional and Moses Taylor, have been losing money and do not have a purchase price, said Bart Plank, head of healthcare public finance at Cain Brothers, told county council on Nov. 10.
The deal is slated to close in December.