Private equity investments in healthcare began to take off in the 1990s, initially focusing on nursing homes and hospitals, and have expanded to every corner of the healthcare market. These investors now invest in all avenues of health care, ranging from physician practices and home health care agencies to fertility clinics and ambulance operators. With an aging population, private equity firms see the potential for record profits.
Hospital workers and Delaware County officials gathered for a press conference demanding accountability following the announcement by Prospect Medical Holdings about the pending closing of Crozier Chester Medical Center in Upland, Pennsylvania, and Taylor Hospital in Ridley Park, Pennsylvania. Prospect claims there is only enough money to keep the hospitals operating through March 14, 2025.
In a Texas Bankruptcy Court, attorneys for the corporation told the judge that they would be unable to make payroll for employees at Crozier, Taylor, and Springfield Hospitals beyond the March 14th date and are proposing a complete closure of hospitals and other facilities in Glen Mills, Media, Haverford, and Broomall. Attorneys for Prospect Medical Holdings claim in a proposed closure filing that “allowing the Pennsylvania hospitals to continue to operate beyond Layout March 14, 2025, without outside funding threatens to accelerate the financial deterioration of Prospect Medical Holdings, jeopardizing the stability of their remaining hospitals and overall operations.” Shuttering these facilities would not just affect Medical services in Upland Borough and Chester City–it would have wide-ranging ramifications for all of Delaware County.
About Prospect
Prospect Medical Holdings, Inc., headquartered in Los Angeles, California, was founded in 1996 by a group of physicians. The privately held corporation operates 16 community hospitals in five states. California operations are comprised of medical groups and independent physician associations. While East Coast operations are comprised of medical groups and community hospitals in Connecticut, New Jersey, Pennsylvania, and Rhode Island, operating outpatient clinics and centers. The company is accredited by The Joint Commission, Det Norske Veritas (DNV), and the Healthcare Facilities Accreditation Program (HFAB).
Prospect Medical Holdings previously owned Hahnemann University Hospital, which closed in 2019 due to unsustainable financial losses following a period of leadership turnover and financial turmoil.
The takeaways are:
Crozier Chester Medical Center is the largest employer in Delaware County, with the majority of its 6000 employees staying within the county limits. Their paychecks are spent here and added to the tax base. Beyond that, there are ambulance drivers, EMS, parking attendants, security, and other outsourced jobs that count on Crozier for their livelihoods. The closure of Crozier and Taylor would threaten the stability of the entire region, as it’s the only tier-one trauma center and national leader in burn care.
Since Prospect Medical Holdings purchased Crozier in 2016, they have ceased operations at Delaware County Memorial Hospital, closed Springfield Hospital, and are now proposing to close Crozier and Taylor Hospital. The blame for this catastrophe lays squarely at the feet of Prospect for their consistent, deliberate, premeditated, and unrepentant mismanagement of hospital systems solely for the profit of shareholders, leaving the taxpayers of Delaware County without the services to which they’re entitled.
At the time of this writing, Prospect Medical Holdings has not submitted a closure plan to the Pennsylvania Department of Health, which is legally required in order for them to start the closure process, nor has its public relations representatives made a statement. A judge has ordered all parties to meet over the weekend. Future updates on the proposed Crozier closure will be provided going forward due to the fluidity of the situation.
On the other hand, with Jefferson University Hospital exploring relocating its Center City Philadelphia head- quarters outside of the city, it might present the perfect opportunity for Delaware County. Jefferson does have a solid, dependable reputation in the Philadelphia region, and it has been rapidly expanding in recent years, growing from three to thirty-two hospitals, stretching from South Jersey to the Lehigh Valley, and it is a non-profit hospital.
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