Prospect Medical Holdings has filed a motion to close Crozer Health and all of the outpatient facilities licensed with the Pennsylvania hospital system, according to a bankruptcy update from Delaware County Pennsylvania.
Prospect Medical Holdings, the parent company for Crozer Health, intends to close Crozer-Chester Medical Center and Taylor Hospital, the last two full-service hospitals it operates in Delaware County.
The closing will result in the layoff of 2,651 employees at eight locations including the two hospitals and at outpatient facilities in Delaware and Chester counties, beginning this Friday and ending on May 2, according to the Worker Adjustment and Retraining Notification filed in Pennsylvania.
Employees received emails Monday morning that the system will be shutting down, according to CBS. A motion to close needs court approval. A hearing is scheduled for today.
Delaware County said it is working closely with the Delaware County Workforce Development Board to support Crozer employees who are impacted.
WHY THIS MATTERS
The closure ends months of uncertainty as Prospect tried to find a buyer to assume ownership of Crozer Chester Medical Center, Taylor Hospital and other facilities.
Prospect Medical Holdings filed for Chapter 11 bankruptcy on January 11 in the United States Bankruptcy Court in Northern Texas.
On March 6, Prospect Medical Holdings informed the bankruptcy judge that it would file a motion to close Crozer-Chester Medical Center and Taylor Hospital, unless emergency negotiations led to a short-term solution.
The filings in bankruptcy court are separate from the state's required process for formally closing a health facility, according to Delaware County. As of Monday, Prospect Medical Holdings had not submitted a formal closure notice or plan to the Commonwealth of Pennsylvania for the Crozer Health System.
The state requires a transition plan to ensure continuity of care for all patients, both inpatient and outpatient.
THE LARGER TREND
PHP Holdings and its related subsidiaries, including Prospect Health Plan, Prospect Medical Systems and its affiliated medical groups in California, Arizona, and Texas, Gateway Medical Center and Foothill Regional Medical Center, are not parties to the Chapter 11 proceedings.
As part of the court-approved bankruptcy proceedings, Crozer Health is currently operated by FTI Consulting, a national firm appointed as the temporary receiver, according to Delaware County.
Delaware County has issued an emergency declaration that enables the county to expedite staffing, procurement and emergency medical coordination, and is initially in effect for seven days. The declaration also allows officials to track and potentially recoup costs related to the closures. If extended by Delaware County Council, the declaration may remain in effect for a longer duration.
Email the writer: SMorse@himss.org