Crozer will revert to a nonprofit, the status it held before 2016 when it was acquired by Los Angeles-based, for-profit Prospect Medical Holdings.
ChristianaCare Health System, Inc., and Pennsylvania-based for-profit Crozer Health have called off merger talks, blaming the changing “economic landscape,” over the past six months, the two health systems announced jointly on Thursday.
Instead, the financially troubled Crozer – which has gone through three CEOs in two years -- will revert to a nonprofit, the status it held before 2016 when it was acquired by Los Angeles-based, for-profit Prospect Medical Holdings, Inc., The Philadelphia Inquirer reports, citing internal documents from Crozer.
Had the deal been completed, it would have given ChristianaCare a toehold in the competitive Southeastern Pennsylvania market that includes Penn Medicine, Jefferson Health, and Main Line Health.
No specific reason was given for stopping the negotiations, which began in February with the signing of a letter of intent, but the press release issued by both health systems noted that "since the signing of the LOI in February, the economic landscape has significantly changed, impacting the ability of the sale to move forward."
"Both organizations worked very hard to reach a final agreement and have significant respect for each other and remain committed to caring for the health of those in Delaware County," the statement read.
In a letter to Crozer Health employees, cited by The Inquirer, leadership at the Springfield, PA-based health system and parent Prospect said the reversion to nonprofit status will "allow us to engage with the community through local governance, support from community-based volunteers, and the creation of partnerships with community-based organizations."
The letter said that Crozer will reopen its Springfield Hospital "as a comprehensive outpatient complex with an Emergency Department, medical offices, ancillary services, and ambulatory surgery center," and that 60% of Crozer’s revenue already comes from outpatient services, according to The Inquirer.
Wilmington-based ChristianaCare, Delaware's largest health system, includes three hospitals with a combined 1,300 licensed beds, a freestanding emergency department, and a network of physician offices and outpatient clinics.
Prospect owns 17 hospitals and more than 165 clinics and outpatient centers in California, Connecticut, Pennsylvania, Rhode Island, and Texas.
Crozer Health, formed in 1990 by the merger of Crozer-Chester Medical Center in Upland, Pa. and Delaware County Memorial Hospital in Drexel Hill, Pa, includes Taylor Hospital in Ridley Park, and Springfield Hospital in Springfield.
John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.
KEY TAKEAWAYS
Had the deal been completed, it would have given ChristianaCare a toehold in the competitive Southeastern Pennsylvania market that includes Penn Medicine, Jefferson Health, and Main Line Health.
No specific reason was given for stopping the negotiations, but a joint press release noted that "since the signing of the LOI in February, the economic landscape has significantly changed, impacting the ability of the sale to move forward."