Foundation for Delaware County gives money to keep Crozer hospitals open for two more weeks
Bankrupt owner Prospect Medical Holding said that the $20 million provided last month by Pennsylvania and Delaware County would only last through March 14 and that the hospitals would have to close.
The Foundation for Delaware County has agreed to provide enough money to keep Crozer-Chester Medical Center and Taylor Hospital open through roughly March 28, a bankruptcy attorney for hospital owner Prospect Medical Holdings said during a court hearing Tuesday.
The attorney did not say how much money the foundation, an independent nonprofit, would provide. The money will be used to pay Crozer’s 3,200 employees, but also pay Prospect for services it provides to Crozer and other expenses. The agreement had not been finalized at the time of the 9:30 a.m. hearing in Dallas.
Last month, Pennsylvania and Delaware County agreed to send Crozer $20 million to keep the county’s largest health system open for four weeks, a period that ends Friday. Prospect said soon after filing for bankruptcy Jan. 11 that it no longer wanted to pay to keep its Crozer hospitals and doctors offices open.
U.S. Bankruptcy Judge Stacey Jernigan had urged the foundation, the Pennsylvania attorney general, and others to find a short-term funding deal, which emerged out of a six-hour meeting Sunday in Harrisburg. At Tuesday’s court hearing, she also wanted to know if progress had been made in finding a new operator.
Jernigan did not ask about stumbling blocks to a deal for Crozer, which Prospect has been trying to sell since the fall of 2021.
Lawyers for the attorney general and the foundation offered no details, but said talks continue.
“We’re certainly continuing to work with the foundation, but also other parties in the area, local and state parties, and other providers to come to a long-term solution,” said Melissa Van Eck, a lawyer with the Pennsylvania attorney general’s office.
“We would have not been part of a short-term solution if there were no prospect of a long-term solution,” Scott Cousins, a lawyer for the foundation and a partner in the Wilmington office of Lewis Brisbois Bisgaard & Smith LLP, told the judge.
The judge asked for an update next Wednesday.
The foundation was created to support community health needs as part of the health system’s 2016 acquisition by Prospect Medical Holdings, a for-profit based in California.
For more than a year, Pennsylvania officials have been exploring options to save Crozer Health, which serves a low-income area of Delaware County without easy access to other health-care options. Crozer operates a trauma center, as well as a burn unit, and provides maternity services and behavioral health care.
In eight years of ownership, Prospect has shut down other Crozer hospitals, reduced medical services, and laid off employees. Crozer’s remaining hospitals are saddled with significant liabilities, which has helped to deter other local health systems from getting involved in a state proposal to create a new independent nonprofit to run it.