Pennsylvania hospital system avoids closure, for now

Just as it appeared Crozer Health was headed for closure, a court-ordered negotiation has produced a deal to keep the system afloat for the time being.

Crozer Health, which operates Crozer-Chester Medical Center (above) and Taylor Hospital in the Philadelphia hospitals, appeared to be headed to closure. State officials have announced a short-term deal to keep Crozer operating.

Pennsylvania Attorney General Dave Sunday announced a deal Sunday that will keep Crozer Health open on a short-term basis. Prospect Medical Holdings, the for-profit company that filed for bankruptcy, announced plans to close Crozer Health, saying it only had enough money to operate the Pennsylvania system through March 14. A federal bankruptcy judge ordered a meeting to try and broker a solution.

Sunday announced that the Foundation for Delaware County has agreed to provide the necessary funding to avoid closure for the immediate future. Crozer Health operates Crozer-Chester Medical Center and Taylor Hospital in Delaware County, part of the Philadelphia suburbs. Crozer also operates a host of other outpatient facilities.

“I thank all parties for their good faith negotiations and sacrifices made to make this happen,” Sunday said in a statement. “This work was done on behalf of the thousands of people and families who depend on Crozer Health System for essential services — and the many hardworking professionals who provide that care.”

”My office will remain engaged in this process as we work to find a long-term solution,” Sunday said.

Frances Sheehan, president of The Foundation for Delaware County, said she was glad to reach an agreement but indicated that a more lasting remedy would be needed at some point.

“We are encouraged by this outcome and hopeful it will lead to a long-term solution with a nonprofit provider,” Sheehan said in a statement. “For three years, we have advocated for the residents of Delaware County, supporting negotiations and exploring every available option to keep the healthcare system from closing. While we cannot sustain an entire health system, we remain committed to ensuring continued access to care.”

Elected officials in Delaware County and in Pennsylvania’s state government were outraged when Prospect indicated last that Crozer Health’s closure would be imminent.

Pennsylvania state officials have clashed with Prospect Medical over its reduction of services in recent years. Prospect filed for bankruptcy in January, with the company listing debts of more than $400 million, as CBS News reported.

Joyann Kroser, MD, president of the medical staff of Crozer-Chester and Taylor hospitals, spoke about the health system’s challenges at a hearing before state lawmakers Monday. She also assailed the reduction of services under Prospect.

“We have seen firsthand what the consequences are when a health system is run by a for-profit entity whose accountability is to its shareholders,” Kroser said at the hearing. “Over the years, we have seen our beloved health system face closures of two hospitals, continuation of service lines and contraction of our ranks. We have faced shortages of supplies that have led to delays in procedures and delays in patient care. We are working with early generation equipment that is at its end of life.”

Crozer Health closed Delaware County Memorial Hospital in 2022. The system also ended acute care at Springfield Hospital in 2022, shifting to outpatient services on that campus.

Kroser said the closure of Crozer Health would lead to the shuttering of the only trauma center in Delaware County and a “renowned regional burn center.”

“The loss of our health system would do unfathomable damage to our patients and to the community,” Kroser said.

Republican and Democratic lawmakers have grown increasingly critical of private equity ownership of hospitals. A blistering, bipartisan U.S. Senate Budget Committee report released in January concluded that private equity investments in hospitals focus on profits over the well-being of their patients.

In a press conference last week, Pennsylvania Gov. Josh Shapiro said, “I’m annoyed by the presence of private equity in our healthcare space.”

Peggy Malone, president of the Crozer-Chester chapter of Pennsylvania Association of Staff Nurses & Allied Professionals, spoke in support of legislation to create more protections for hospitals owned by private equity groups.

“We cannot allow what happened in Delaware County to happen again in Pennsylvania,” Malone said at a hearing Monday.

At the hearing before the Pennsylvania Senate Democratic Policy Committee, Kroser said she hoped to see reform at the state level governing private equity ownership of Pennsylvania’s hospitals, and she hoped to see a long-term remedy for the preservation of her health system.

“I hope it is not too late to save Crozer,” she said.