Crozer Health’s computer systems back online after ransomware attack

Crozer Health’s computer system that handles patient records has been restored and is fully operational again, multiple sources said Tuesday.

A ransomware attack on Aug. 3 had knocked the system offline, forcing doctors and nurses to use paper medical records, handle actual x-ray film and read it in special monitors, and walk to get lab results on paper — all things that are handled electronically in a modern hospital.

The restoration of the computer systems is good news for patients such as Edith Gavin, 63, whose family doctor at Crozer canceled an Aug. 15 appointment because the office couldn’t access records. Gavin, a Skippack resident, said Monday that she was worried about getting a referral in time for a Sept. 1 appointment with a specialist.

The ransomware attack also dealt at least a short-term financial blow to Crozer, which has been struggling to claw its way back to profitability after a private-equity firm sold Crozer’s real estate for cash.

The for-profit health system had reported making progress after ending acute-care services at two of its four hospitals. Those hospitals are Springfield and Delaware County Memorial Hospital. Crozer also owns Crozer-Chester Medical Center in Upland and Taylor Hospital in Ridley Park.

Health systems typically recover financially from cyber attacks, said Kevin Holloran, senior director for nonprofit health care at Fitch Ratings.

“There is a very deep, very steep, short term pain point that takes place when this happens, but if the organization’s got a large enough balance sheet and a good enough team, so far we’ve seen that they ultimately end up okay from a ratings standpoint,” Holloran said.

Health systems typically have insurance that reimburses them for losses during the early stages of recovery from an attack, he said.

Fitch does not rate Crozer because it is a for-profit system, owned by Los Angeles-based Prospect Medical Holdings Inc.

Prospect, when it was controlled by a private-equity firm, in 2019 sold the real estate at Crozer and certain other hospitals, which then had to lease the properties back from the new owner, effectively saddling the hospitals with debt.

In Crozer’s case, that debt amounted to $420 million. The landlord has since slashed the value of the Crozer properties to $155 million and in May announced its intention to replace the lease on the Crozer buildings with a mortgage. Under that scenario, Crozer would again own the properties.

But in a sign of Crozer’s financial challenges, the system was not required to make payments on that mortgage for two years. It’s not clear if that new arrangement took effect.

Editor’s note: This story was updated to reflect the restoration of the health system’s online operations.