Last-minute deal saves Pennsylvania hospital from closing
Easton Hospital, owned by a portfolio company of Cerberus Capital Management, secured $8 million from the State of Pennsylvania in a last-minute bailout to keep the facility's doors open. Through June, the state funding commitment would total $24 million.
Why it matters: It's very welcome news that a hospital won't close in the midst of a pandemic, but it also reflects pretty indefensible behavior by Cerberus.
To be sure, Easton Hospital is unprofitable and had been negotiating for months to be acquired by a larger local rival. Under normal circumstances, it would make sense for Cerberus and portfolio company Steward Health Care to wind things down.
- But this is a national emergency, and Cerberus, its billionaire CEO, and very wealthy partners could have stepped in to help save lives. Plus, Cerberus and Steward both knew that federal aid to hospitals was on the way.
The bottom line: "It’s hard to believe that Easton Hospital could have sat vacant in the coming months — shedding 700 jobs in the process — as the rest of the Lehigh Valley scurried to free up every room, ventilator and medical staffer to try to save lives." — The Express-Times editorial board
Update: After this story was published, Cerberus sent Axios the following statement:
“Cerberus is working around the clock to support companies around the world as they protect their employees and serve their customers and communities during this pandemic. Steward Health Care is no different. We support the company’s decision to continue working constructively with the State of Pennsylvania, as it has been doing for months, in order to continue serving the Easton community. We recognize and are deeply appreciative of the critical work Steward Health Care and its 42,000 team members are doing on the front lines, serving over 800 communities across more than 35 hospitals.”