Dive Brief:
- Los-Angeles based hospital management company Prospect Medical Holdings has agreed to buy Crozer-Keystone Health System, the largest healthcare provider in Delaware. The deal is pending regulatory approval.
- Prospect will keep all five Crozer-Keystone hospitals open and invest $200 million in the facilities over the next five years to upgrade them and expand services.
- Under the deal, Prospect will assume Crozer-Keystone's outstanding pension liability by funding $100 million of the obligation at closing. In addition, employment will be offered to all Crozer-Keystone employees and management in good standing.
Dive Insight:
Prospect will provide distributions to pay all benefits owed to pension participants and beneficiaries within five years of the closing date.
All Crozer-Keystone hospitals will continue to operate under their existing names and become part of the Prospect network. All key services, such as ED, trauma, maternity, etc., will remain or expand. Prospect will also adopt Crozer-Keystone's charity care policies for five years and fund community and education programs.
Joan Richards, Crozer-Keystone's president and CEO said, "We are very pleased to have a partner that shares so many of our priorities. 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."
Crozer-Keystone operates five hospitals, several outpatient clinics, a sports club, and a primary-care and specialty network of physicians. Prospect owns and operates 13 hospitals in three states (CA, TX, RI) as well as 40 clinics and outpatient centers.
If the agreement passes regulatory approval, the tax status of Crozer-Keystone will change from nonprofit to for-profit and its revenues will be taxed.
