Crozer-Keystone Health System Signs Definitive Agreement with Prospect Medical Holdings, Inc. - Crozer-Keystone Health System - PA

Published on January 08, 2016

Crozer-Keystone Health System Signs Definitive Agreement with Prospect Medical Holdings, Inc.

Media Contacts:
Grant Gegwich
Crozer-Keystone Health System
(610) 447-6316
Grant.Gegwich@crozer.org


Gary Hopkins
Prospect Medical Holdings, Inc.
(805) 705-2586
gary@blancohopkins.com

Prospect Medical Holdings, Inc.

Prospect Medical Holdings, Inc. is
a growing healthcare services company.

Crozer-Keystone Health System and Prospect Medical Holdings, Inc. announced today 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 and maternity 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.

"We are very pleased to have a partner that shares so many of our priorities," commented Joan K. Richards, Crozer-Keystone president and chief executive officer. "We recognize and appreciate the level of commitment and the willingness to take on challenges that Prospect has demonstrated throughout the process of negotiating this agreement."

"We are pleased to have reached a definitive agreement with Crozer-Keystone Health System and we look forward to completing the regulatory approval process. Prospect is committed to building upon Crozer-Keystone's long and distinguished history of delivering quality, compassionate care and to helping ensure the future of this vital community healthcare provider," said Thomas Reardon, President of Prospect East Holdings, Inc. “This agreement is further recognition of the success of our Coordinated Regional Care model which is transforming and improving healthcare delivery in communities across the country.”

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.

"Our partnership with Prospect Medical, as embodied in this definitive agreement, delivers a solution that will be very good for Crozer-Keystone, its people, and its community," added Bruce Fischer, chairman of the Crozer-Keystone Board of Directors. "We hope the details we are able to release today will help everyone realize what a strong future we have ahead of us."

About Crozer-Keystone Health System

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. A leader in community health, Crozer-Keystone provides services and programs that meet the medical and social needs of thousands of Delaware County’s residents each year. The American Hospital Association awarded Crozer-Keystone with a NOVA Award for its excellence and innovation in community health.

About Prospect Medical Holdings, Inc.

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, 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.

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