The deal comes one day after Los Angeles-based Prospect Medical announced the sale to Yale New Haven Health of three Connecticut hospitals.
ChristianaCare Health System, Inc. announced Friday that it has sign a letter of intent to buy the financially troubled, for-profit Crozer Health from Prospect Medical Holdings, Inc. in a deal that could be finalized later this year.
The deal comes one day after Los Angeles-based Prospect Medical announced the sale to Yale New Haven Health of three Connecticut hospitals.
Financial terms were not disclosed for the Crozer deal, under which the four-hospital, Springfield, Pennsylvania-based Crozer will become a nonprofit organization. Wilmington, Delaware-based ChristianaCare has three hospitals.
"ChristianaCare and Crozer Health have been serving the people of Northern Delaware, Southeast Pennsylvania and parts of Maryland and New Jersey as neighbors for many years," ChristinaCare President and CEO Janice E. Nevin, MD, MPH, said in prepared remarks.
"We welcome this opportunity to explore a closer relationship with an organization that shares our commitment to value and service to the community."
The four Crozer hospitals involved in the deal are:
- Crozer-Chester Medical Center in Upland, Pennsylvania, with 499 certified beds.
- Delaware County Memorial Hospital in Drexel Hill, Pennsylvania, with 215 certified beds.
- Springfield Hospital in Springfield, Pennsylvania.
- Taylor Hospital in Ridley Park, Pennsylvania.
The agreement also includes the hospitals’ related businesses, real estate assets, Crozer Health Medical Group and the associated assets, ambulatory centers, medical office buildings, physician clinics and ancillary outpatient services.
With the LOI signed, the two systems now enter a negotiation and due diligence process but are expected to sign a definitive agreement in the second half of 2022. The agreement is subject to regulatory approvals.
The hospitals will be released from their master lease agreement between the real estate owner and Prospect.
Rumors had been circulating for weeks that Crozer was up for sale, following the Jan. 21 closure of the maternity ward at Delaware County Memorial Hospital, and today's shuttering of the hospice unit at Taylor Hospital in Ridley Township. Crozer blamed declining volumes and staffing issues for the closures.
In an interview with WHYY News, Crozer President and CEO Kevin Spiegel said the four hospitals would remain open, but he did not provide the radio outlet with details about what that would look like under ChristinaCare.
"This is one of the most stabilizing forces, all of the physicians and community board members that we have met with and explained what is about to happen, [it] was seen as extremely positive, because this is a stabilizing force," Spiegel told WHYY.
Currently, Prospect Medical Holdings owns 13 hospitals and more than 40 physician practices in six states. However, if the sales in Pennsylvania and Connecticut are finalized, Prospect will no longer have a hospital presence in those states.
“We welcome this opportunity to explore a closer relationship with an organization that shares our commitment to value and service to the community.”
Janice E. Nevin, MD, MPH, President / CEO, ChristinaCare Health System
John Commins is the news editor for HealthLeaders.
KEY TAKEAWAYS
Financial Terms were not disclosed for the deal, which includes four Crozer hospitals in Pennsylvania.
Springfield, PA-based Crozer will become a nonprofit organization under Wilmington, Delaware-based ChristianaCare, which operates three hospitals.
The two systems enter a negotiation and due diligence process but are expected to sign a definitive agreement in the second half of 2022.
LA-based Prospect Medical Holdings in the past two days has entered into two separate deals to sell seven hospitals in Pennsylvania and Connecticut.