North Philadelphia Health System



The History of NPHS

North Philadelphia Health System (“NPHS”) was incorporated in August of 1990 as a Pennsylvania non-profit corporation to own and operate Girard Medical Center (“GMC”) and St. Joseph’s Hospital (“SJH”) (Now Closed), collectively (the “Hospitals”) after both filed plans of reorganization in their respective Chapter 11 bankruptcy cases.

The Hospitals have a long history of service to one of the oldest neighborhoods in the City of Philadelphia.  Founded in 1848, St. Joseph's Hospital is one of the oldest hospitals in the City of Philadelphia (the “City”).  Girard Medical Center traces its roots to 1927, when it opened on its current site.  The two hospitals are located eight city blocks apart in lower North Central Philadelphia, an area geographically close to downtown Philadelphia, but very distant in terms of health care access, economic status and social and cultural makeup.  North Philadelphia is an area which suffers from virtually all of the burdens of economic deprivation and the Hospitals remain among the few institutional pillars which have remained committed to the community.  The Hospitals developed on separate independent paths, with distinct medical staffs, governance and management until their paths converged together during the 1980's.

In the early 1980's, the Hospital conducted total facility replacement, financed by the issuance of bonds.  GMC (known as Giuffre Medical Center until 1989) opened two new hospital buildings which housed 234 beds replacing the original 1927 Tower building.

Although the Hospitals served a community that was declining in terms of socioeconomic factors, the Hospitals continued to expend capital and invest in numerous program and service expansions.  When prospective payment for services (the “DRG Program”) was introduced in 1984, neither of the Hospitals made the changes in administrative and clinical practice responsive to the incentives of the DRG program.  By the end of the 1980’s, the Hospitals had experienced several years of declining financial performance, substantial erosion in overall patient volumes coupled with weak and problematic management.  In 1987, GMC found itself reeling from a succession of problems in quality of care, governance and management filed for bankruptcy pursuant to Chapter 11.  In 1989, SJH suffering from the same symptoms, also filed for bankruptcy pursuant to Chapter 11.  At that time, the logic of uniting the two hospitals became apparent.  NPHS was created in August 1990 as part of the bankruptcy plan of reorganization for both GMC and SJH.  NPHS, a single corporate entity, combined all assets, employees, medical staff, management and governance of the Hospitals.  The operative portions of NPHS’ strategic plan called for savings through consolidation, expansion of drug and alcohol and psychiatric services and ability to increase on historical volumes of medical-surgical admissions.

n May 1992, the Board of Directors of NPHS dismissed senior management and entered into a five-month agreement with Mercy Health System (“Mercy”) to provide an interim management team to assess and stabilize the Hospitals operations.  Thereafter, the agreement with Mercy was renewed and expanded to provide for full management and has been extended until June 30, 2003.

From an operational perspective, Mercy found that NPHS had attempted to function largely as two hospitals with substantial duplication of services, and programmatic gaps.  As a result, a reconfiguration of services was undertaken which consolidated behavioral health programs at GMC and medical-surgical programs at SJH.  The program included the closing of the GMC’s emergency room, operating room suite and critical care units as well as the downsizing and centralization of all clinical ancillary departments.

NPHS is the predominant economic institution in its community.  NPHS employs over 1,600 individuals, over 80% of whom live in the City of Philadelphia and 40% of whom live in North Philadelphia.  NPHS is a vital element in the North Central Philadelphia Empowerment Zone as designated and funded by the Department of Housing and Urban Development.  NPHS is an active participant in the implementation of Empowerment Zone programs.






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