Hospitals facing lack of funds due to historic budget impasse

Both of Temple’s hospitals could face serious problems if funding isn’t passed.

As the budget impasse continues in Harrisburg, Temple University Hospital could feel ramifications if one isn’t passed by June 30. If representatives and Gov. Tom Wolf cannot reach an agreement, TUH will be down $19 million in funding.

Wolf has actually approved the healthcare section of the budget, but continues to veto the other sections, leaving TUH without state appropriations.

“In the middle of all this budget crisis, the health side of the budget actually got done and was signed by the governor,” said Robert Lux, vice president and CFO of Temple University Health System.

Despite this part of the budget being signed, TUH will not see any of the $19 million in funding that it needs to function to its fullest potential.

“If you lose all that funding you just can’t deliver the product,” said Ken Kaiser, CFO and treasurer of Temple. “You aren’t going to be able to offer the same services.”

The lack of funding would hurt several aspects of the hospital, Lux said.

“If $19 million of our funding doesn’t occur because the governor and legislature can’t get it together, then that potentially puts a lot of hurt on Temple Health,” he said.

“You think twice before investing in new programs for the community. You have to start to look at where all of the losses come from,” he added. “Generally, where all of the losses either come from or start is in the emergency room.”

Not having $19 million would also make starting and revamping community programs at the hospital more difficult, both at TUH and TUH’s Episcopal Campus, Lux added.

Both campuses reported more than 134,000 emergency visits combined in Fiscal Year 2015. With that amount of visitors, the emergency rooms need to update their equipment and expand, Lux said.

“On the Episcopal Campus they believe they have to invest $10 million to change the emergency room because it’s not big enough,” said Lux. “On the [Health Sciences Campus], they wanted $10 [million], we are providing $6 million because they felt that they need to expand and add different beds.”

Without the funding they need, TUH and the Episcopal Campus will struggle to maintain their delivery of healthcare.

“If that doesn’t occur in enough time, then it means that Temple Hospital would be thrust into a dire position of losing a lot of money,” Lux said.

Along with not being able to offer the best possible emergency rooms, TUH’s credit rating will begin to affect how much the university can borrow, which will impact the health system, Lux added.

“There will be a negative impact into our budget, that will have implications with Standard & Poor’s, Moody’s and Fitch, the credit rating services which have implications on what it will cost to borrow money,” he said.

If the budget does not get passed, Kaiser acknowledges that it will be an issue for not just the hospitals, but the entire university.

“It could be a big problem,” Kaiser said. “Not having the state budget passed is a disaster that’s looming for all of Temple.”

Jonathan Gilbert can be reached at or on Twitter @jonnygilbs96.

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