Prospect Medical Holdings - Crozer-Keystone Health System - PA

Prospect Medical Holdings

In July 2016, Crozer-Keystone Health System was acquired by Prospect Medical Holdings, Inc., an innovative healthcare services company that owns and operates 18 hospitals, as well as over 140 clinics and outpatient centers. As part of this agreement, Prospect acquired all properties, plants and equipment owned by Crozer-Keystone or used in the operation of the health.

Our partnership with Prospect will ensure even greater access to quality care in our community. Prospect will make capital investments in the health system that will dramatically increase our ability to modernize, attract more patients and expand service to the community.

About Prospect

Prospect Medical Holdings, Inc., a growing healthcare services company, offers a unique and innovative healthcare delivery model, known as Coordinated Regional Care, which emphasizes coordination of care and population health management, with an emphasis on wellness and preventive care. CRC helps coordinate quality 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 18 hospitals, as well as over 140 clinics and outpatient centers. Prospect also manages the provision of healthcare services for more than 320,000 members enrolled in its networks of over 11,000 primary care physicians and specialists. Prospect's operations are located in diverse areas in California, New Jersey, Pennsylvania, Rhode Island and Texas.

For more information, visit www.pmh.com.

Frequently Asked Questions

What is Prospect’s healthcare delivery model?

Prospect has developed a unique and innovative healthcare delivery model that emphasizes coordination of care and population health management, with an emphasis on wellness. Prospect’s model of healthcare delivery is not hospital-centric, but focuses on partnerships with physicians, medical groups, other providers and payers. This ensures that patients receive the right care, in the right place, at the right time, compassionately and efficiently. It’s higher quality care at a lower cost of delivery.

What is Prospect’s reputation in the communities it serves?

Prospect has a strong reputation as an ethical and responsible healthcare company, and has a track record of working collaboratively with employees, physicians, medical groups, labor unions, payers and other providers, as well as with the communities served by its hospitals.

What impact does becoming a for-profit hospital have on the community, patients and employees?

Besides having better access to capital, the other major difference between not-for-profit and for profit hospitals is that for-profit hospitals pay taxes. As a for-profit company, Prospect will become a new taxpayer for the state and cities where it acquires not-for-profit hospitals. In terms of clinical care, for-profit hospitals adhere to the same standards as not-for-profits; this includes 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). The primary impact for the community, patients and employees is that the hospitals Prospect acquires can be strengthened and sustained for the future.

Will the name of the health system change?

No.

Will the names of the hospitals change?

No.

Will any of the hospitals be closed or sold?

Prospect will not sell or close any of the hospitals for at least 10 years following the closing date of the agreement. In Prospect’s history, they have never sold or closed a hospital.

What will Prospect invest in capital needs for Crozer-Keystone?

Prospect will invest at least $100 million for routine capital needs and an additional $100 million for strategic capital needs at Crozer-Keystone over a five-year period.

What does this mean for non-union Crozer-Keystone employees?

Prospect will offer to hire active non-union employees in good standing at the rate of pay, title and seniority level at time of close, subject to standard pre-employment screening processes.

Employees will not have to “bid” for their current jobs. Employees can expect to receive a letter from Prospect offering them their current position.

What does this mean for unionized Crozer-Keystone employees?

Unionized employees in good standing will be offered employment subject to initial terms and conditions set by Prospect. Prospect will meet with the various labor organizations that represent Crozer-Keystone employees and enter into appropriate recognition agreements with them.

What does this mean for the Crozer-Keystone medical staff?

All medical staff members in good standing immediately prior to the closing date will maintain their medical staff privileges at the Crozer-Keystone facilities where they have privileges at that time. Prospect will maintain an open medical staff and will continue to work collaboratively with independent physicians. Prospect will assume all existing contracts with physicians, including employment agreements. Prospect will make all of its physician resources, expertise, intellectual capital, entities and associated operational support functions available to Crozer-Keystone physicians.

Will any of Crozer-Keystone’s services change or go away?

Prospect will ensure that Delaware County has the full range of services necessary to support the needs of the community, including access to primary, secondary and tertiary care, specialty and hospital-based services and emergency and urgent care facilities. Prospect has committed to maintaining critical service lines, such as ED, trauma, burn, behavioral health, maternity and neonatal intensive care. Prospect is also committed to expanding service offerings in the community to ensure growth and sustainability.

Does the purchase include outpatient centers and other Crozer-Keystone buildings in the community?

Yes. The acquisition includes all properties, plants and equipment owned by Crozer-Keystone or used in the operation of the health system.

Does Prospect provide charity care?

Prospect will adopt Crozer-Keystone’s charity care policies for at least five years and will at all times operate the charity care program in accordance with federal and state laws. Prospect will continue to provide medically necessary services to the communities served by CKHS, and in no case will emergency treatment ever be denied because of a patient’s inability to pay.

What will happen to Crozer-Keystone’s community benefit programs?

Prospect will support the health and well-being of residents in the communities served by Crozer-Keystone, and fund wellness, health education and other community programs consistent with Crozer-Keystone’s past practices. Many of our community health programs will move into a new foundation that will be established.

Crozer-Keystone’s current strategic alignment with ChesPenn Health Services will be continued.

Will graduate medical education programs be maintained?

Yes.

How will the new organization be governed?

Prospect has committed to forming a local advisory board comprised of local community leaders and physicians to ensure ongoing, meaningful input. The existing Crozer-Keystone Board of Directors will appoint the initial Advisory Board members. Going forward, the Advisory Board will self-perpetuate as outlined in the agreement. The Advisory Board will:

  • Make recommendations and suggestions with respect to medical staff credentialing
  • Provide input on policies and clinical programs
  • Provide input on operating and capital budgets
  • Provide input and support physician recruitment efforts
  • Provide input on succession plans for executive leadership
  • Promote community health initiatives
  • Monitor and improve quality indicators

Why didn't we work with a local, non-profit health system?

Crozer-Keystone completed an exhaustive examination of potential strategic partners. We evaluated several local non-profit health systems as part of that process. Prospect emerged as the best partner for many reasons, including but not limited to its shared values, its compatible healthcare delivery model, its ability and willingness to make at least $200 million in capital investments in our system, its ability and willingness to take on liabilities including the employee pension and the fact that its entry into our market will improve instead of restrict competition.

What happens next in the process?

The partners are now submitting applications for the appropriate regulatory approvals. This may include, but is not limited to:

  • Hart-Scott-Rodino pre-merger notification filing to the U.S. Department of Justice and Federal Trade Commission
  • Filing to the PA Attorney General under its non-profit transaction protocol.
  • Antitrust review by the PA Attorney General
  • Hearing and approval in Delaware County Orphans Court regarding transfer of charitable assets
  • PA Department of Health approval and issuance of all necessary licenses to Prospect and termination of our licenses
  • Notification to CMS regarding change of ownership for all provider numbers