Penn Medicine donated $5 million to the Crozer Health system last week.
Credit: Grace ChenThe University of Pennsylvania Health System is set to take over two Crozer Health leases as part of a $5 million deal to prevent the Delaware County-based health system from closing while its parent company goes through bankruptcy.
Crozer Health and its owner Prospect Medical Holdings filed for bankruptcy in January, creating financial and public health concerns for the region. Delaware County also paid $1 million to FTI Consulting — an external firm that has managed Crozer since February — for "mental health services rendered" as part of the effort to keep the health system afloat.
Bankruptcy attorneys for Prospect previously stated that the company would begin closing parts of its health system if it was unable to secure a $9 million cash infusion by April 16. Contributions from Penn Medicine and Delaware County will temporarily sustain Crozer’s general medical operations while Prospect continues its search for a buyer.
Currently, Crozer is the largest healthcare system in Delaware County, and preventing its shutdown has been a priority for both the Commonwealth of Pennsylvania and Delaware County.
While the deal is not finalized, Penn told The Inquirer that the Health System “plan[s] to ensure continued operations in the [Broomall and Glen Mills] facilities, and over time, offer reimagined, expanded services to improve the health of local residents.”
“These grant funds are part of an overall funding package to allow the hospitals to remain open in the short-term, and do not come from property tax funds in Delaware County,” Delaware County wrote in a statement. "Delaware County maintains its commitment to a transition from Prospect ownership of these healthcare facilities in a way that is as orderly, calm, and comprehensive as possible.”
The Commonwealth of Pennsylvania and Delaware County previously provided $20 million to Crozer in an attempt to keep the system operational. Penn Medicine and Crozer Health were also involved in earlier discussions to form a partnership between the two entities in order to save Crozer from bankruptcy.
Earlier this year, Prospect announced that it planned to sell Crozer to an unnamed “not-for-profit consortium of healthcare operators.” It is unclear where Crozer currently stands in its sales negotiations, but CEO Anthony Esposito stated that the health system will begin implementing a restructuring plan developed by FTI Consulting, an external firm that has managed Crozer since February.
“[A permanent plan] will be executed by FTI in a methodical manner with no immediate or imminent changes,” Esposito wrote in an email obtained by WHYY.
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