The Lever - "We Must Build An Alternative"

In today’s featured story below, reporter Matthew Cunningham-Cook profiles Philadelphia Mayoral candidate Helen Gym, whom recent polls show is the current frontrunner in Tuesday’s primary election. While much of the race’s coverage has focused on crime, we tell the story of a 133-year-old hospital in Philadelphia — and explain how Gym’s fight to save it emulates a much larger battle happening nationwide: public interest against private equity.

Also:

• On this week’s Lever Time Premium, exclusively for The Lever’s supporting subscribers, we’re exploring everything you need to know about the evils of the private equity industry. David interviews federal prosecutor Brendan Ballou about his new book Plunder: Private Equity’s Plan to Pillage America, as well as Joshua Rosner, co-author of These Are the Plunderers: How Private Equity Runs — And Wrecks — America. To get access to Lever Time Premium, click here.

Rock the boat.

Philadelphia mayoral candidate Helen Gym. (AP Photo / Matt Rourke)

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When private equity threatened to destroy a 133-year-old hospital, Helen Gym, a former teacher and parent organizer turned first-term Philadelphia City Council member, sprung into action.

“How corrupt is it for an investment banker and a real estate company to come in and buy a major medical hospital in the poorest large city in the country?” Gym’s voice boomed out to a crowd of hundreds in front of Hahnemann University Hospital in central Philadelphia at a July 2019 rally with Sen. Bernie Sanders (Ind.-Vt.), one the first times Gym’s organizing work caught national attention. “And how wrong are our laws when Joel Freedman and his cohort of vulture capitalists can run this hospital into the ground in less than 18 months and now they’re going to flip it for a real estate deal?”

Just three weeks before, Joel Freedman, a private equity executive, had announced that he was closing the hospital. It was one of just five hospitals that could treat trauma patients, and one of just six hospitals where people could give birth, in the sixth-largest city in America.

Now Gym, after two terms on city council, is running for Philadelphia mayor on an ambitious platform to invest in and expand public institutions, especially health care and schools. If she wins in the Democratic primary on Tuesday, overcoming an entrenched Democratic Party establishment and powerful billionaires opposing her insurgent campaign, she will also confront Philadelphia’s major health and housing disparities. These deep inequities are a microcosm of yawning nationwide problems of which the federal government has effectively washed its hands.

Gym’s campaign — which is currently leading in the most recent poll for the race — asks a far-reaching question: In the most unequal country in the industrialized world, what can one city do to address the national health care and housing crises fueled by global financiers?

“I’m not running for office because I want to be a mayor per se,” Gym told The Lever in January. “I’m running for office because we have to dramatically change the way this city takes care of its own people from babies to senior citizens.” Gym speaks warmly and deliberately, with a candor that has endeared her to the city’s splintered activist communities and made powerful enemies, including the local Chamber of Commerce and the editorial board of the Philadelphia Inquirer.

“I want to be able to show people that the government has a powerful role to play,” she added. “What’s transformative about that is to lead with a real people’s movement focused on the essentials of life: safety, housing, education, health care, the environment.”

On the city council, Gym has fought the city’s business lobby to protect workers rights and promote safe schools. And while much of her campaign has been framed around public well-being and safety, her politics are actually best understood at an institutional level — in her unsuccessful but still transformative fight to save a century-old hospital.

Fighting To Save A Hospital

Philadelphia is the poorest big city in America. A progressive bastion in an increasingly blue state, the city is racially diverse and has growing inequality. It’s one of the few remaining American cities where organized labor plays a major role in political life, with more than 150,000 people represented by a union in a city of 1.6 million. In recent years, more than half-a-dozen progressives and socialists claimed victories in various offices.

In 2001, Gym was a mom sending her kids to public school, dismayed at the state takeover of the city’s education system — and joined other parent-activists seeking better resources for the city’s desperately underfunded public schools. In 2015, she ran for the city council, and in 2019, she was reelected as the highest vote-getter in the Democratic primary. In both campaigns, championing public schools and improving health care were central tenets of her platform.

When Hahnemann faced sudden closure in 2019, no elected official was more vocal than Gym about the dangers the shutdown foretold. Those warnings came to fruition less than a year later, when COVID-19 ravaged the city and killed more than 5,500 people.

Gym’s role in the effort to save Hahnemann from private equity managers who prioritized profits over patient care is a story that has never been fully told.

At the time, I worked as the staff researcher for the main nurses and health care professionals union in Philadelphia, the Pennsylvania Association of Staff Nurses and Allied Professionals (PASNAP), which represented 800 nurses at Hahnemann.

Hahnemann University Hospital was founded in 1885 as a teaching hospital for homeopathic medical students and later established itself as a center for traditional medicine in the city. In 1986, it became the city’s first Level 1 trauma center — the highest designation for treating trauma patients. The development was critically important in a city beset with a major gun violence epidemic.

In the late 1980s, a new nonprofit, the Pittsburgh-based Allegheny Health and Education Research Foundation (AHERF), began to transform the state’s hospitals. AHERF went on a Wall Street-backed buying spree of Pennsylvania health care assets, purchasing Hahnemann in 1993, but then filing for bankruptcy just five years later, in what was then the largest nonprofit health care bankruptcy ever.

AHERF’s Philadelphia assets were sold to Tenet Healthcare, what is now the second-largest publicly traded hospital firm. Hahnemann eventually affiliated with Drexel University, becoming the fifth-largest medical school in the U.S., and continued to serve vulnerable populations. Up to its closure, a majority of its patients had public health insurance or none at all.

By 2016, nurses at Hahnemann had become so frustrated that they overwhelmingly voted to unionize with PASNAP. But the following year, the hospitals were sold again, this time to Joel Freedman, a private equity manager backed by MidCap Financial, a subsidiary of Apollo Global Management, a major private equity firm with a long history of problems, including delivering subpar returns and associations with convicted pedophile Jeffrey Epstein.

Immediately, Hahnemann was saddled with onerous debt service payments several points higher than common commercial rates, leaving the hospital with fewer resources to shore up its troubled finances.

Freedman initially made pledges to invest in the hospital — and agreed to a contract with the nurses that contained precedent-setting language on safe staffing. But the hospital’s already-shaky finances were further stressed by the new private equity model. When MidCap sent in a notice of default to Freedman in May 2019, the hospital was on the verge of collapse.

When Freedman announced Hahnemann’s imminent closure the following month, hospital staff braced for the worst. Hahnemann employed nearly 10 percent of PASNAP’s membership, and the union’s research showed that the hospital’s closure would further stress the city’s already-overburdened emergency rooms.

Today, among the hospitals that ended up taking most of Hahnemann’s patients in Philadelphia, ER wait times are about a half hour longer than the average hospitals in Pennsylvania, according to a Lever analysis of federal health care data. Health care workers around the city reported that ERs near Hahnemann became burdened with additional patients in the immediate aftermath of the hospital’s closure.

Previous closures of hospital maternity wards in Philadelphia had led to increases in infant mortality as high as 50 percent, researchers from the Children’s Hospital of Philadelphia found in 2012.

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The Hahnemann workers quickly found an ally in Gym, who had long been close with PASNAP’s former president, Patty Eakin. Eakin, a recently retired emergency room nurse at Temple University Hospital, said that Gym immediately jumped into action.

“Helen was furious when they closed Hahnemann,” said Eakin. “Because Hahnemann was a safety net hospital. There were lots of patients who depended on it for care, and would now need to travel great distances. She was very sharp in her critique of a private equity company and a bottom feeder like Joel Freedman buying a hospital and running it into the ground.”

Samir Sonti, a labor studies professor at the City University of New York, had just started as PASNAP’s political organizer when Hahnemann’s closure became imminent, and noted her response was very different from the common politician’s response. Sonti said, “[Helen] was one of the first electeds that we spoke to. From the first conversation onward she was strategizing with us over how we could build a campaign to save Hahnemann. At no point was it about her using it as a political opportunity — she used it as an organizer.”

Gym appeared at every union event, pressed for financial resources to support Hahnemann, pushed the city and state Departments of Health to block Hahnemann’s closure, and pressured Freedman to stop the disorderly closure of the hospital.

But as financial pressure mounted, real estate vultures were circling: Hahnemann sat on valuable real estate in Center City Philadelphia. And other hospitals wouldn’t throw their weight behind saving Hahnemann, eager to absorb its patient population and lucrative medical residencies.

The CEO of Thomas Jefferson University, the city’s second-largest hospital network, Stephen Klasko, wrote an email in April 2019 — prior to Hahnemann’s bankruptcy and subsequent closure — saying, “No, we don’t need Hahnemann. In fact, we need many less hospitals.”

Despite routine marches in front of the hospital, including the July 2019 rally headlined by Gym and Sanders, real estate pressure and hospital competition was overwhelming. By the summer, it was clear that Hahnemann was not salvageable; more powerful politicians than Gym had largely given up on it while private interests moved in. By August, the hospital had no patients and was effectively shut down.

But Gym was energized to increase her efforts to fight for progressive values in Philadelphia. Today, she remains firm that public investment and ownership is the answer to privatization: “What is most important right now is a really strong government sector that looks out for the people. Local governments have an enormous amount of power, and an enormous amount of responsibility as well.”

Gym went on to pass legislation that would crack down on disorderly hospital and nursing home closures, which the mayor signed in December of 2019.

Gym connected Hahnemann’s plight to poor state and national hospital regulations. Nationwide, hospital closures are major issues for cities and rural areas, reflecting a divestment of private interest in public health and the serious risks that come with for-profit ownership of hospitals.

“It is absolutely vital that local governments strengthen their responsibilities to the health and well being of our residents, because state and federal policies are so weak in this area” said Gym.

The Philadelphia region, meanwhile, is still vulnerable to hospital closures. In 2020, Mercy hospital in West Philadelphia substantially closed their inpatient operations and became an outpatient clinic, and private equity-owned Delaware County Memorial Hospital, right outside of the city in Upper Darby, closed at the end of 2022.

Gym’s Philadelphia

Inspired by what she learned in her fight to save Hahnemann, Gym said she sees Philly’s mayoral race as an opportunity to make the city a model for what can be accomplished in America as a whole: developing municipal responses to national problems.

“Progressives spent enormous sums of money and a lot of hair pulling to focus on Wisconsin, North Carolina, Georgia, and Florida in the 2022 elections,” Gym said. “But at the municipal level, we can actually see a blueprint for the nation written through America’s largest cities. Philadelphia is a Democratic city. And that means that it should demonstrate what the country could and should look like, in the next 10 to 20 years.”

Critical to Gym’s overall perspective on Philadelphia’s public health is the city’s school system. Philadelphia’s public schools have been routinely closed to deal with lead issues, which United States Public Interest Research Group, a federation of state-based consumer advocacy organizations, calls a “widespread” problem in Philadelphia’s schools.

Instead of recognizing Philly’s school crisis for what it is: an emergency, the city council and the current Mayor Jim Kenney’s administration have kicked the can down the road, cutting business and wage taxes that could have been used for lead abatement.

Gym and her two main progressive allies Kendra Brooks and Jamie Gauthier were the only members of the council to vote against the tax cuts. Gym has proposed a $10 billion city-wide Green New Deal, funded by property taxes and the city’s bonding authority to address the lead crisis.

Gym has also focused on the city’s housing crisis, with 48 percent of the city’s renters being considered as rent-burdened. In December 2021, the city council passed Gym’s landmark eviction diversion program which has been praised by the Biden White House, building on earlier legislation that Gym and her allies on Philadelphia’s 17-member city council had passed in June 2020. The program appears to have reduced evictions by about one third compared to pre-pandemic numbers.

Buttressing Gym’s broader vision for the city is her emphasis on workers’ rights. In December 2018, Gym won passage of the Fair Workweek legislation, which cracked down on unfair flex scheduling practices for workers, particularly in the retail industry. The legislation affects an estimated 130,000 workers.

“What we have demonstrated is a real push by everyday people to see a government that truly works for them,” Gym said, “But it starts at the local level by making sure that schools are safe and functioning and open and staffed and funded, by making sure that libraries and recreation centers are open and vibrant, that health care is not about just hospitals, but that health care is about meeting people’s needs, on the ground, and really connecting the government to its people.”

Building An Alternative

Of the three frontrunners in the race, Gym is the only mayoral candidate running who has won citywide more than once, and she brings a loyal set of volunteers as the city’s progressive insurgency has bloomed.

Since 2019, when Gym was reelected and Brooks and Gauthier defeated incumbents to win seats on the council, Philadelphia’s progressives have experienced a resurgence.  In 2020, Nikil Saval, a socialist writer and organizer, won election to the state Senate, and Rick Krajewski, also an organizer, won a spot in the state House.

In 2022, Tarik Khan, a nurse practitioner who had been active in the fight to save Hahnemann, defeated an incumbent to win a spot in the Pennsylvania House. Larry Krasner, the city’s progressive district attorney who has overseen a 40 percent reduction in the city’s jail population, was reelected with 67 percent of the vote in 2021, along with a slate of seven progressive judges.

On Sunday, Gym reprised her 2019 rally with Sanders, as he stumped for her with Rep. Alexandria Ocasio-Cortez (D-N.Y.).

This election comes on the heels of progressive Brandon Johnson’s April upset in Chicago’s mayoral election, backed by a comparable coalition of progressives and the city’s teachers union. There, Brandon Johnson campaigned on a platform that prioritized workers, emphasized investment in schools, and reimagined public safety. His trajectory could point to a similar opportunity for Gym.

Philadelphia, a city similarly hollowed out by disinvestment and energized by a progressive insurgency, can be a model for the nation. As corporate interests threaten the city’s future, Gym is naming and fighting privatization.

“We must build an alternative,” Gym concluded. “I think that that is my life’s work, even before I ever came into office. It’s one of the most important things that I think politics needs to do right now. I think we’re very clear about our repudiation of Trumpism and the extreme right, but it will resonate if we live differently, as people deserve to live. And that is the most important thing for me in Philadelphia, that people’s lives have to actually be different.”

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