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Crozer-Keystone Health System and Prospect Medical Holdings, Inc. announced Friday, January 8 that they have entered into a definitive agreement for the health system to be acquired by Prospect. Crozer-Keystone and Prospect will now submit applications for regulatory approval.
Under the terms of the agreement, Crozer-Keystone hospitals, its physician network, and other facilities will continue to operate under their existing names, but will become part of the Prospect network. Prospect has committed to keeping all five Crozer-Keystone hospitals open, and will make capital investments in the Crozer-Keystone system totaling at least $200 million over the next five years, dramatically increasing the ability of Crozer-Keystone facilities to modernize, attract more patients, and expand service to the community.
The agreement specifies that critical service lines such as Emergency Department, trauma, behavioral health, maternity and pediatrics will remain in place or expand. Prospect will adopt Crozer-Keystone’s charity care policies for at least five years, and fund wellness, health education and other community programs consistent with Crozer-Keystone’s past practices.
In addition, Prospect will assume Crozer-Keystone's outstanding pension liability, funding $100 million of the obligation at closing and providing distributions to pay all benefits owed to pension participants and beneficiaries within five years of the closing date. Prospect will offer employment to all Crozer-Keystone employees and management in good standing who are current as of the closing date on comparable terms (subject to customary pre-employment screenings), honor seniority levels and enter into recognition agreements with the various labor organizations that represent Crozer-Keystone employees.
The acquisition by Prospect will change the tax status of Crozer-Keystone from not-for-profit to for-profit, meaning that in addition to being one of the region's largest employers, Crozer-Keystone will become a significant contributor to local and county tax revenues. For-profit hospitals must adhere to the same standards of clinical care as not-for-profit institutions, including meeting standards set by the accrediting agencies, Medicare Conditions of Participation, state regulatory requirements, and EMTALA (which mandates that no one can be turned away from an emergency department).
Since Prospect does not currently operate in the region served by Crozer-Keystone, the acquisition will not reduce competition in local healthcare, and it is hoped that regulatory approval will be granted expeditiously.
Crozer-Keystone Health System, a not-for-profit health system, comprises five hospitals: Crozer-Chester Medical Center and Delaware County Memorial Hospital, as well as Taylor Hospital in Ridley Park, Springfield Hospital in Springfield, and Community Hospital in Chester. In addition, the health system operates several outpatient centers, the Healthplex® Sports Club, and a comprehensive physician network of primary-care and specialty practices. With more than 1,100 physicians and 6,000 total employees, Crozer-Keystone is the largest employer and healthcare provider in Delaware County.
Prospect Medical Holdings, Inc., is a California based a growing healthcare services company, that offers a unique and innovative healthcare delivery model, known as Coordinated Regional Care (CRC). This model emphasizes coordination of care and population health management, with an emphasis on wellness and preventive care. CRC helps coordinate quality, personalized care for patients through integrated networks of primary and specialty physicians, in affiliation with hospitals, clinics, other community-based providers and health plans. Prospect owns and operates 13 hospitals, with a total of 2,258 licensed beds, as well as 40 clinics and outpatient centers. Prospect also manages the provision of healthcare services for approximately 257,000 members enrolled in its networks of over 8,900 primary care physicians and specialists. Prospect’s operations are located in diverse, high-density population areas within five markets in California, Texas, and Rhode Island.
Crozer-Keystone Health System
Prospect Medical Holdings, Inc.