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Prospect Intends to Sell Distressed Crozer Health to Nonprofit Consortium

Analysis  |  By Jay Asser  
   February 03, 2025

The previous two attempts by the financially troubled health system to sell Crozer fell apart.

Prospect Medical Holdings is hoping that the third time is the charm for its divestiture of Crozer Health.

The Los Angeles-based health system announced its plan to sell Crozer, including all hospitals, ambulatory surgery centers, clinics, and physician offices to a nonprofit consortium of healthcare operators.

Though the parties making up the consortium were not identified, Prospect stated that the proposed sale "will support the preservation and continuation of services to all members of the Delaware County."

Prospect also said in the announcement that it will work with the state of Pennsylvania to facilitate the move. State Sen. Tim Kearney, of Delaware County, told WHYY News that details of the deal still have to be worked out and that he wants Prospect to fulfill its obligations to Crozer through its exit.

"By selling Crozer Health to a group of experienced healthcare operators, the communities in and around Delaware County will continue to access and receive the critical healthcare services they require," Tony Esposito, Crozer health CEO, said in a statement. "We appreciate the support of the Commonwealth of Pennsylvania, as well as all parties involved, to make this transition possible."

Four-hospital system Crozer is one of several divestitures Prospect is pursuing after filing for Chapter 11 bankruptcy last month.

Prospect first tried to offload Crozer to ChristianaCare Health System in 2022 before the deal fell through. It again tried to complete a sale with CHA Partners last year, but that proposal didn't reach the finish line either.

Elsewhere, Prospect is working to wrap up the sale of two Rhode Island hospitals, Roger Williams Medical Center and Our Lady of Fatima Hospital, to the Centurion Foundation.

Meanwhile, Prospect's deal with Yale New Haven Health for three Connecticut hospitals remains at an impasse with the sides embroiled in a lawsuit.

Prospect will seek bankruptcy court approval for the proposed sale of Crozer on February 6.

Jay Asser is the CEO editor for HealthLeaders. 


KEY TAKEAWAYS

Prospect Medical Holdings revealed its intention to sell Crozer Health to a nonprofit group of healthcare operators, consisting of unnamed parties.

The health system, which filed for Chapter 11 bankruptcy last month, is aiming to divest hospitals in Pennsylvania, Rhode Island, and Connecticut as it narrows its focus on California.

Prospect was unsuccessful in completing deals for Crozer with ChristianaCare Health System in 2022 and with CHA Partners last year.


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