Chester County Hospital to join University of Pennsylvania Health System

The Chester County Hospital and Health System said Friday that it will join the University of Pennsylvania Health System.

Chester County announced in August that it would search for a partner after management decided that the $150 million to $275 million needed over the next decade to fulfill its vision for the institution was more than it could get on its own.

"Throughout this process we spoke with many excellent organizations, but it quickly became clear to our strategic planning committee and our board of directors that the potential to join the University of Pennsylvania Health System was the best decision for our community and our health system," William W. Wylie Jr., chairman of Chester County's board, said in a new release.

Neither organization made executives available for interviews.

The deal is not final. The organization signed a nonbinding letter of intent, which will allow Penn to conduct due diligence. Completion of the deal is expected this spring. Terms were not disclosed.

The proposed deal marks a renewed foray by Penn into suburban hospitals. In 1997, Penn bought Phoenixville Hospital, but sold it in 2004 in a retrenchment after a period of financial losses.

In the year ended June 30, Chester County Hospital reported a $2 million operating loss. The institution reported a $415,547 operating loss in the first quarter of the current fiscal year.