Deal struck to keep Pa. hospital system open – for now

If a pair of its hospitals close, the state’s fifth most populous county would only have two left.

An agreement has been made to keep a pair of hospitals in Delaware County open for the near future.

Following a meeting on Sunday in Harrisburg, state Attorney General Dave Sunday and The Foundation for Delaware County announced that Crozer-Chester Medical Center and Taylor Hospital will remain open for the “immediate future, while permanent restructuring of the system is solidified.” The foundation formed with the nonprofit assets from the purchase of the Crozer-Keystone Health system to Prospect Medical Holdings in 2016, committed funding for the healthcare system in the county to avoid closing the hospitals in the coming weeks.

“I am pleased that the parties focused on how to move forward on behalf of Pennsylvanians, instead of how we got here, and worked to an agreement after more than six hours of negotiations,” Sunday said. “This work was done on behalf of the thousands of people and families who depend on Crozer Health System for essential services — and the many hardworking professionals who provide that care.”

Last Thursday, Prospect Medical Holdings Inc. announced they were planning on closing both facilities by March 14, after already closing and ceasing operations on two other hospitals in the county, according to state Rep. Dan Frankel, chairman of the Pennsylvania House Health Committee.

Prospect Medical Holdings Inc. filed for Chapter 11 bankruptcy in January for properties across the United States, including Crozer Health system.

Foundation President Frances Sheehan said they were encouraged by the temporary agreement to keep the hospitals open and “hopeful” it will lead to a “long-term solution with a nonprofit provider.”

“For three years, we have advocated for the residents of Delaware County, supporting negotiations and exploring every available option to keep the healthcare system from closing,” Sheehan said. “While we cannot sustain an entire health system, we remain committed to ensuring continued access to care.”

Gov. Josh Shapiro has called for reform in regards to the purchase of healthcare acquisitions by a private equity firm.

“This Crozer issue is not unique. We’re seeing too many hospitals, especially in rural communities across our state, shut down because private equity stepped in and bought them,” Shapiro told reporters several days ago, prior to the agreement. 

Shapiro criticized the private equity firms that have stepped in to purchase hospitals and ultimately close them.

“Who gets rich in that process? These private equity guys. It’s wrong. It has to stop,” Shapiro said. “And unless we do something about it in the legislature, in the governor’s office, it’s going to continue. We’ve got to change this.”

Nicole Stallings, president and CEO of Hospital and Healthsystem Association of Pennsylvania, said many hospitals in the state are “at-risk as they navigate significant challenges that jeopardize their ability to provide access to comprehensive health care services in their communities.” She also cited recent data from the Pennsylvania Health Care Cost Containment Council that showed more than half of the “acute care hospitals are operating at a loss,” and a third of those have experienced multi-year losses.

“The cost of providing care has skyrocketed while payments have not kept pace. At the same time, hospitals continue to navigate a myriad of challenges that affect health care access, including continuum-wide workforce shortages, outdated regulations, and strained emergency departments that are increasingly serving as safety nets amid underinvestment in community services,” Stallings said.

State Rep. Lisa Borowski (D-Delaware) sponsored legislation in a previous session that would give the state Attorney General the power to review health care acquisitions to determine they are in the best interest of the public before they’re finalized. House Bill 2344 passed the House Health Committee, but did not pass both chambers in the legislature.

“The situation with Prospect Health in Delaware County is sadly playing out across our commonwealth in every type of community — urban, suburban, and rural,” Borowski said. “As our healthcare providers struggle with increased demand, staffing challenges, and inadequate state and federal reimbursements, it becomes difficult to maintain a strong bottom line. This makes these institutions ripe for takeover by private equity, who see potential profits as a more valuable asset than continuing to deliver patient care.”

Borowski told the Capital-Star she looks forward to continuing to work with Attorney General Sunday on the matter and will reintroduce the legislation to “help keep bad actors out of our commonwealth, and support the healthcare providers who are truly working to protect health and wellness.”

There are currently four hospitals in Delaware County, the fifth most populous county in Pennsylvania. Should Crozer Health close, Mercy Fitzgerald and Riddle Hospital would be the only hospitals remaining in the suburban Philadelphia county.

Additional details are expected to be released in the coming weeks as the parties seek to find a permanent solution.