ChristianaCare Health System Inc. announced Thursday that it was unable to come to terms with Prospect Medical Holdings Inc. on the anticipated sale of Crozer Health under a letter of intent signed earlier this year.
“Since the signing of the LOI in February, the economic landscape has significantly changed, impacting the ability of the sale to move forward,” the two companies said in a joint statement posted to Christiana’s website. “Both organizations worked very hard to reach a final agreement and have significant respect for each other, and remain committed to caring for the health of those in Delaware County.”
Von Crockett, Prospect’s senior vice president of Corporate Development, said in a separate statement that the decision to discontinue talks was a mutual one between the two companies.
“Crozer Health will now continue to engage in a strategic review that will determine the best path to stabilize the health system, the first step of which will be converting to nonprofit status,” he said. “This work will rely on engaging medical staff to help define how the services we offer best meet community needs, as well as other healthcare providers we’ll look to in determining opportunities for affiliation and collaboration. We also will immediately begin to engage our health plan partners, community leaders and regulatory bodies to ensure Crozer Health’s sustainability well into the future.”
Wilmington-based non-profit ChristianaCare signed the LOI Feb. 11 to acquire Crozer-Chester Medical Center in Upland with 499 certified beds; Delaware County Memorial Hospital in Upper Darby with 215 certified beds; Springfield Hospital in Springfield and Taylor Hospital in Ridley Park.
The agreement also included the hospitals’ related businesses, real estate assets, Crozer Health Medical Group and associated assets, ambulatory centers, medical office buildings, physician clinics and ancillary outpatient services, according to a release issued in February.
That release indicated talks on the particulars of the deal would continue and closing was expected in the second half of 2022, but the statement issued Thursday said negotiations “concluded without agreement.”
Prospect, a for-profit enterprise based in California, acquired Crozer Health for $300 million in 2016. ChristianaCare was expected to return Crozer Health and its approximately 4,000 employees to nonprofit status.
Crozer said in an open letter to employees that it is also transitioning back to nonprofit status.
“Crozer Health remains open for business; we are not going anywhere, and we remain committed to Delaware County to serve the community,” the letter read.
“The county was disappointed to hear that CristianaCare is not proceeding with its transaction with Prospect Crozer,” an emailed statement from County Council read. “We will continue to keep lines of communications open with CristianaCare, and hope it enters the vital Delaware County market in the future.
“As to Crozer Health, the county appreciates positive steps that have occurred during the summer to maintain certain services and provide competitive wages to their health professionals, and we expect Crozer Health to remain an important provider of health services in the county, and a key employer.”
It has been a turbulent year for Crozer Health, which received more than $72 million of relief funds during the COVID-19 pandemic.
In January, the emergency department, pathology, lab and medical imaging services were suspended at Springfield Hospital. Crozer also suspended its First Steps inpatient acute substance abuse and addiction unit at Crozer Chester Medical Center that same month.
The inpatient hospice unit at Taylor Hospital in Ridley Park was closed in February, purportedly based on the need for patient safety, declining admissions to inpatient hospice and challenges presented by the national nursing shortage. Crozer Health announced a $15,000 sign-on bonus earlier this week for new registered nurses.
In March, Crozer announced the temporary closure of the intensive care unit and surgery unit at DCMH due to staffing issues, and in April sent the leaders of Aston, Brookhaven, Glenolden, Prospect Park, Tinicum, Norwood and Ridley Park a letter stating that paramedic services through the Advanced Life Support response vehicle – also known as the “chase car” – would cease if a financial arrangement wasn’t made.
Crozer issued another letter in April announcing the First Steps program would close in June, along with an outpatient substance abuse clinic at DCMH, the Crisis Center at CCMC, and all mental health and substance abuse treatment services at the Community Campus in Chester, including school-based services, intake, assessment and referral, case management, and psychiatric rehabilitation.
Crozer also saw two new Chief Administrative Officers take the helm this year. The first was Kevin Spiegel, a self-described “turnaround specialist” who took the position in February.
His tenure was marked by the aforementioned closures, severe cuts in services, community protests and a legislative hearing to address the lack of maternity care in the area held by Upper Darby state Reps. Mike Zabel, D-163, and Gina Curry, D-164.
Spiegel was replaced in July by Anthony Esposito, who previously served as president of the Crozer Health Medical Group and president of Prospect Physician Enterprise along the East Coast.
Delaware County officials recently reached an agreement with Prospect that settled pending litigation regarding the planed closures of behavioral health facilities. Common Pleas Court Judge Kelly D. Eckel signed off on the agreement last Wednesday, which also required Prospect to comply with a recently passed county ordinance requiring notice of a planned sale or closure of a hospital, or specified departments, including a behavioral health unit.
State Sens. Tim Kearney, D-26 of Swarthmore, and John Kane, D-9 of Birmingham, issued individual statements saying they were both deeply troubled by Thursday’s announcement.
“We all deserve the access to the medical care we need, no matter how much we can afford,” said Kane. “That is what made our Delco community so hopeful that a deal with ChristianaCare was possible. I’ve been very clear that our healthcare system should not be a for-profit money-making scheme. Wealthy elites and selfish, money-hungry business practices should have no place in our health care system.”
Kane, who has sponsored a bill to ban for-profit healthcare in the commonwealth, said Crozer’s announced intention to return to a non-profit model is welcome news, but more needs to be done.
“They must restore the services that were cut this year,” he said. “…We need our healthcare system to focus on the care they provide, not the profits they make. Our lives are depending upon it.”
Kearney likewise said he was excited about the possibility of Crozer being added to ChristinaCare’s non-profit organization and decried its deterioration under the ownership of Prospect.
“While disappointing, I learned this news is sparking local moves that will result in the transition of Crozer back to its nonprofit status with a reopening of local facilities, including Springfield’s Emergency Department,” said Kearney. “I am also heartened to learn ChristianaCare and Prospect will continue to work toward establishing clinical partnerships and integrated models of care that benefit our local community.”
A spokesperson for Prospect said she could not comment any further than the statement put out by Crockett.
County Council Chair Dr. Monica Taylor said she shared the disappointment many others across the county likely felt at the news.
“It’s still not clear that (ChristianaCare) is not going to be coming in in some way, possibly in the future, but I guess we will continue to work with Prospect and Crozer in any way we can to make sure the health care needs of the county are met,” she said. “We’ve had some really good conversations over the last couple of months to move processes forward and to engage with Crozer, and I’m hoping that’s going to move forward.”
–Staff reporter Kathleen Carey contributed to this article
