Bankruptcy judge approves the closure of Delaware County’s Crozer hospitals

Editor’s note: Since this article published, Crozer hospitals began closure procedures. Their emergency departments stopped accepting patients by ambulance Wednesday morning.

Crozer Health’s Delaware County hospitals will stop receiving patients arriving by ambulance with medical emergencies at 8 a.m. on Wednesday, but walk-ins will still be accepted at its emergency department for the next week under closure procedures approved Tuesday in bankruptcy court.

A bankruptcy judge in Dallas approved the closures of Crozer-Chester Medical Center in Upland and Taylor Hospital in Ridley Park by the health system’s for-profit owner, Prospect Medical Holdings, at the end of a nearly 2½-hour hearing.

“This is a bad result, but it’s just the one that we’re stuck with,” U.S. Bankruptcy Judge Stacey Jernigan said, declaring that Prospect “has a sound business justification” to close the facilities.

The closure plan is a work in progress, and is regularly being reviewed by the Pennsylvania Department of Health. “I’ve seen three versions in the last 12 hours,” Prospect’s lawyer, Bill Curtin, told the judge.

One important change has to do with the emergency departments at the two hospitals.

Prospect announced Monday that the emergency departments would start diverting ambulances to other hospitals Wednesday at 8 a.m. After discussions with state health officials, it agreed to extend the closure process for people who walk to the EDs by seven days, according to testimony Tuesday.

A big concern for the municipalities that depend on Crozer for emergency medical services is how long they would continue operating. The current plan is for them to continue through May 2. The full closure could be delayed, depending on how quickly alternative providers can be found.

Crozer will begin laying off 2,651 workers Friday, California-based Prospect notified state regulators in documents made publicly available Tuesday. The layoffs come about three months after the for-profit company filed for bankruptcy protection in January. The judge also approved Prospect’s plan to try selling outpatient facilities in Broomall, Glen Mills, Havertown, and Media. Bids on those businesses are due Friday. The buildings that house those practices are not owned by Crozer.

The closure of two of the four remaining hospitals in Delaware County is expected to leave many residents without easy access to many of the healthcare services provided by Crozer, especially in communities around Chester. Of particular concern are trauma services and health services for women and babies, including high-level neonatal intensive care.

It’s expected to cost $20 million to $30 million to close the system, Prospect’s chief restructuring officer, Paul Rundell, testified Tuesday. He said the system received $19 million from FTI Consulting, which had been managing Crozer since February.

The rest of the money is expected to come from bills that are still to be paid and possibly from the sale of the outpatient facilities.

Rundell said approval of the closure was urgently needed. “We are already starting to see some staffing issues, and I think you put patients at risk,” he said.

Over its eight years owning Crozer, Prospect previously shut down two other Crozer hospitals, reduced medical services, and laid off employees in several rounds of cutbacks. The liabilities placed on the health system factored into the reluctance of other local health systems to get involved in a state proposal to create a new independent nonprofit to own it.