A letter of intent was signed with California-based nonprofit Tenor Health Foundation last week to purchase Wilkes-Barre General Hospital, Regional Hospital of Scranton and Moses Taylor Hospital from Commonwealth Health, according to an internal memo.
The memo was sent by General Hospital CEO Michael Clark and distributed to medical staff, hospital employees and the board of directors on Wednesday.
“While the contemplated transaction was originally to include only the Scranton assets, it became important to include Wilkes-Barre as well,” the memo stated. “All possible options are being explored to preserve the health care services Commonwealth Health provides to the community. We appreciate the leaders and organizations working to make this happen.”
Commonwealth Health spokesperson Tomi Galin confirmed the memo and offered a similar statement.
“This is the first step in a process that we all hope will result in a completed transaction and preserve the health care services provided by Commonwealth Health,” she said.
According to its website, Tenor Health was, “formed to identify, own, manage and turn around financially challenged hospitals.”
“Leaders of Tenor Health have many years of health care experience and you may see them on site in the coming days,” said the memo.
While a timeline for negotiations and the potential sale has not yet been determined, the memo said an update will be given once “a definitive plan for the future is reached.”
When reached for comment by the Times Leader, Wilkes-Barre Mayor George Brown said he was not aware of the letter of intent and learned about it on Wednesday from various media outlets reporting on it.
“No one reached out to me from Commonwealth Health or Tenor,” Brown said during a phone interview.
Brown did not feel comfortable commenting too much on the potential sale until he had more information, but he did say that he would be interested in sitting down with leadership from Tenor to discuss possibly contributing to a PILOT program for the city if the sale where to go through.
Because the foundation is a nonprofit, it might be exempt from paying real estate taxes, which could cost the city around $770,000 in revenue.
Additionally, the Wilkes-Barre Area School District currently receives approximately $800,000 in real estate taxes from Commonwealth Health, according to district Solicitor Raymond P. Wendolowski.
However, just because an organization is a nonprofit, that doesn’t mean it automatically gets tax exempt status.
According to previous Times Leader reporting, the county assessment appeals board makes the initial determination on exemption requests, and its decisions are subject to appeal to the county Court of Common Pleas and, if desired, to higher courts.
Decisions about exemption are largely based on standards established by the state Supreme Court in a case against the state filed by the Hospital Utilization Project — now called the HUP test.
Purchase history
The future of Commonwealth Health’s three area hospitals became uncertain when Woodbridge Healthcare’s acquisition of it collapsed last Fall.
It was announced on Nov. 26, 2024, that the nonprofit had failed to secure financing for the $180 million tax-exempt bonds it had previously been approved for by the Wilkes-Barre Finance Authority and city council, terminating the sales agreement.
This led to a town hall meeting held on Dec. 16, 2024, in Scranton, attended by local and state leaders, along with employees from all three hospitals, to discuss the future of the community hospitals residents rely on for care.
For-profit Commonwealth Health initially purchased General Hospital in 2009. It had floated the idea of selling off Wilkes-Barre General, Moses Taylor and Regional Hospital since at least 2016.
In recent years, the company has significantly scaled back services, abruptly ending its impatient and delivery services in July 2023.
According to the Pennsylvania Health Care Cost Containment Council, an independent council that highlights, “the cost and quality of healthcare throughout the state,” expenses outpaced revenue at Wilkes-Barre General by 15.73% in the fiscal year 2023.
That number improved in 2024 to 6.19% for a three-year average of 8.65%.