Crozer Health layoffs went far deeper than initially reported
The cuts nailed administrators and executives and could be a prelude to a sale. Some observers believe that Prospect is close to -- or has a preliminary deal -- to sell Crozer.
Crozer Health layoffs went far beyond the CEO whose departure was announced quietly in an internal email last week.
Prospect Medical Holdings Inc., which owns Crozer Health, also slashed the system’s administrative staff and cut a number of senior positions, including the system’s chief medical officer, Gary Zimmer, according to industry sources and four former employees who lost their jobs at the Delaware County health system. Zimmer did not respond to a phone message.
Crozer announced internally last Tuesday that its chief executive, Peter Adamo, was leaving — his last day will be this Friday — to be replaced by a Prospect executive, Kevin Spiegel.
But Prospect moved on to cutting administrative staff, including people who ran system-wide clinical programs, and other managers on Wednesday. They were let go with no severance, only a payout of their accrued vacation, one of the laid-off employees said. None of the former employees reached by The Inquirer knew how many were laid off and asked not to be quoted by name as the departures are being processed.
One of them estimated the layoffs at 300.
Lori Bookbinder, spokesperson for Crozer, has not responded to multiple requests for comment since last week on the extent of the job cuts.
Crozer, one of Delaware County’s 10 largest employers, employed 6,000 two years ago, when Adamo was hired. The system includes Crozer-Chester Medical Center in Upland, Delaware County Memorial Hospital in Drexel Hill, Springfield Hospital in Springfield, and Taylor Hospital in Ridley Park.
Prospect, a for-profit company based in Los Angeles, put Crozer and other hospitals it owns on the East Coast up for sale in October. Prospect has owned Crozer since 2016, acquiring what was then a nonprofit in a transaction valued at $300 million, mostly for assumed liabilities.
The cuts could be a prelude to a sale. In Philadelphia-area health-care circles, there has been talk for more than a week that Prospect is close to selling or has a preliminary deal to sell Crozer.
But some health-care experts say Crozer would be a difficult acquisition to swallow. That’s not only because the system serves a large population of patients with government insurance that doesn’t pay the best rates for care, but also because of a 2019 real estate deal that generated a large payout for Prospect’s former controlling owner, private-equity firm Leonard Green & Partners.
In 2019, Prospect and Leonard Green sold the real estate occupied by the four Crozer hospitals to Medical Properties Trust as part of a $1.55 billion sale-lease back deal involving 14 hospitals and two psychiatric facilities in California and Connecticut, in addition to those in Delaware County.
That means that the Crozer hospitals are paying millions of dollars a year in rent.