Crozer Health System Deal Fails

Yesterday, word came out that the expected purchase of Crozer Health System to ChristianaCare had fallen through. WHYY has more on the story here. The news is not good. After years of turmoil, Christiana was hoped to provide stability to the floundering health care system in DelCo.

Chester Hospital (later Chester-Crozer) has served as this area’s main hospital since 1893. Over the years it merged and parted with other hospitals to form a network of hospitals serving DelCo. Currently, Prospect Medical Holding currently owns four hospitals in the area – Chester-Crozer, Springfield, Delaware County Memorial and Taylor Hospitals.

In recent years, Crozer has faced a lot of challenges – mostly self-inflicted. Several of those challenges are detailed in DelCo Times articles like this one. Nurses have routinely protested insufficient staffing in hospitals – putting patients in danger. The system has recently threatened to withdraw several services to the community,

On June 19, the Crisis Center at Crozer-Chester Medical Center would close, as well as all mental health and substance abuse services at Community Hospital, including school-based services, intake, assessment and referral, case management, and psychiatric rehabilitation.

The system already targeted Delaware County Memorial Hospital to have its intensive care unit and surgery unit closed by May 31. It had closed the hospital’s inpatient obstetrics unit in January. That same month, emergency department, pathology, lab and medical imaging services at Springfield Hospital were suspended and the inpatient hospice unit at Taylor Hospital in Ridley Park was closed.

Ambulance services have been under threat as well as Crozer shakes down communities for cash. These closures are a threat to the safety of our community. And while Crozer often points the finger at the pandemic, this story is more about the looting of America’s for-profit medical system. WHYY wrote a story earlier this year detailing what happened in 2019,

That deal was made between Prospect’s previous owner, a private equity firm called Leonard Green & Partners, according to ProPublica. The firm siphoned $645 million from Prospect before announcing a deal to sell it in October 2019. The ProPublica report details how the transaction would hobble Prospect with $1.3 billion in lease obligations. This is after the company sold most of the hospital land to a real estate investment firm.

Leonard Green & Partners, which owned about 60% of the hospital chain, wanted to pass along its share to Prospect CEO Sam Lee and his associate, David Topper, for $12 million. This would give them 100% ownership control over Prospect.

The catch? The $12 million bill was footed by Prospect, and not the two executives — a deal that some believed was sure to leave hospitals owned by Prospect in dire financial straits.

Crozer’s ongoing financial struggles and the collapse of the Christiana deal both connect to the removal of vast sums of money from the system by a private equity firm, leaving it saddled with debt and lease contracts after flogging its assets. Now that they’ve looted the system, Prospect claims its trying to turn what remains of the system into a non-profit. Our elected officials at every level from local to federal need support to take more aggressive action before our community is left without sufficient medical services. Ideally the United States would finally join the rest of the wealthy world and provide state-run health care for all its residents, but as that’s some time away, at a minimum they should act to ensure private equity funds can’t raid our medical system and run off with the money.

One last note: Bryn Mawr, Paoli and Riddle hospitals are owned by the non-profit Main Line Health system. But that system is unlikely to have the capacity to serve the entire county.

Categories: Ramblings