Prospect Medical Holdings asked Gov. Josh Shapiro for a bailout to sell Crozer Health
Prospect said it is in the early stages of talks with an unidentified nonprofit buyer.
Prospect Medical Holdings Inc. is in the early stages of negotiating the sale of Delaware County’s Crozer Health to an unidentified nonprofit, Crozer said Thursday. Prospect is a for-profit based in Los Angeles.
Local health-care expects said the potential buyer would likely be a newly created nonprofit entity managed by a for-profit consulting company. WHYY first reported the talks Thursday and said that Prospect had asked Gov. Josh Shapiro’s office for as much as $500 million in financial support.
“We and the potential buyer have asked them for financial support for both the potential buyer and the hospitals to help ensure the completion of the transaction and a seamless transition of ownership,” Prospect said in a statement emailed to The Inquirer by Lori Bookbinder, Crozer’s spokesperson.
Prospect said it had not made “demands” of the governor.
Shapiro spokesperson Manuel Bonder said the administration is fighting to preserve the services Crozer provides, including Delaware County’s primary trauma center, but will not relieve Prospect of its financial obligations.
“We will not entertain any requests for a taxpayer bailout of a for-profit company and we will not tolerate any attempt to use the health and safety of Pennsylvanians as a bargaining chip,” Bonder’s statement said.
Crozer has two fully open hospitals: Crozer-Chester Medical Center and Taylor Hospital. It also owns Springfield Hospital and Delaware County Memorial Hospital, which no longer operate as acute-care hospitals.
Tumult at Crozer
Prospect, which has owned Crozer since 2016, has been trying to sell Crozer since at least 2021.
A potential deal to sell the system to ChristianaCare in 2022 fell apart after ChristianaCare concluded that it couldn’t make the deal work financially.
Prospect then said it was going to convert Crozer into a nonprofit, but didn’t stick with that plan. “We briefly considered converting Crozer to nonprofit status but determined it would be better to sell to a nonprofit owner who is committed to continuing to serve the community,” Prospect said Thursday.
Since February, Prospect has been working to sell Crozer under a nine-month timeline established by the Pennsylvania Attorney General. However, a buyer is not guaranteed to emerge, given Crozer’s operating difficulties and its heavy financial obligations.
Crozer has a $155 million mortgage on its real estate and a large pension liability. It would also be a huge financial undertaking for a new owner to catch up on deferred maintenance and update computer systems and equipment, local health-care experts have said.
Prospect said Thursday that it is not contemplating bankruptcy, which would make it possible to strip some of those liabilities.