Crozer Health’s Delaware County hospitals get another financial lifeline amid owner’s bankruptcy
Crozer’s bankrupt owner, Prospect Medical Holdings, has been saying it would close the hospitals without financial support from the state, Delaware County, and now the Foundation for Delaware County.
The Foundation for Delaware County announced an agreement Friday with the Pennsylvania attorney general that will prevent Crozer-Chester Medical Center in Upland and Taylor Hospital in Ridley Park from closing as soon as next week.
The unspecified financial deal allows stakeholders to keep working toward a long-term solution for the financially beleaguered health system, according to the nonprofit, independent foundation designed to support local community health needs.
Crozer’s bankrupt owner, Prospect Medical Holdings, has been saying since January that it would close the hospitals unless the state, Delaware County, and now the foundation provided more money. The latest tranche of money for the for-profit hospitals was supposed to be $13 million coming from the charitable foundation, but it’s not clear that was the amount agreed to at a meeting in Harrisburg Friday.
“We are pleased to announce that the immediate funding pieces necessary to bridge to a long-term solution are in place,” the foundation’s statement said. “We are encouraged that the parties, today, remain focused where they should be — preserving accessible health care for the Delaware County community and maintaining the workforce that provides that essential care.”
Lawyers for Prospect and the attorney general had criticized the foundation during an emergency hearing Thursday, called the morning after a Delaware County judge issued an injunction preventing the foundation from providing more money to Prospect or any entity related to the for-profit company based in California.
Friday was the latest of several deadlines for Prospect to decide whether it would pull the plug on Crozer. That date was built into a previous agreement under which the foundation provided $7 million to keep Crozer open.
That injunction was dissolved Thursday. By then, the bankruptcy judge who is overseeing Prospect’s case had also ordered a representatives from Prospect, the attorney general’s office, the foundation, Prospect’s patient care ombudsman, and FTI Consulting to meet. Representatives from Gov. Josh Shapiro’s office and Delaware County were also at the meeting, according to the foundation’s statement.
Attorney General Dave Sunday said the foundation “will be engaged with the still-developing plans for Crozer’s restructuring,” in a statement after the meeting Friday. He suggested that the foundation could be involved in a permanent new owner for Crozer.
Sunday did not identify a long-term solution. “As for the efforts to solidify that permanent owner, we appreciate the good faith efforts of regional health care providers involved in ongoing discussions,” Sunday’s statement said.
Prospect acquired the former nonprofit Crozer Keystone Health System in 2016, giving it a collection of 16 hospitals across the country. Two years later, Prospect borrowed $1.12 billion to pay off debt and issue a $457 million dividend to its owners, Leonard Green & Partners, as well as to individual owners, Prospect executives Sam Lee and David Topper.
The foundation received $55 million from the 2016 sale of the nonprofit Crozer-Keystone Health System to Prospect. The full amount came after a lengthy court fight with Prospect.