Prospect Medical Holdings Acquires Crozer-Keystone Health System

SPRINGFIELD, Pa. — An agreement was made between Crozer-Keystone Health System and Prospect Medical Holdings Inc. for the acquisition of Crozer-Keystone by Prospect, according to a statement from Prospect Medical Holdings. Although the two systems are merging, many things will stay the same for Crozer-Keystone hospitals, including their name.

Prospect has committed to investing at least $200 million in the Crozer-Keystone system over the next five years, which will help keep the five hospitals in the health system open. The capital investment will also increase the systems ability to modernize its facilities, allowing the hospitals to attract more patients and expand the services they are able to provide to the surrounding community. Prospect will also fund wellness, health education and other community programs in place at Crozer-Keystone, and will also adopt the hospital’s charity care policies for at least five years, according to a statement.

“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,” said Joan K. Richards, Crozer-Keystone president and CEO, in a statement.

The agreement states that service lines such as the Emergency Department, trauma, behavioral health, maternity and pediatrics will remain in place or expand. “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 health care provider,” said Thomas Reardon, president of Prospect East Holdings Inc., in a statement.

Per the agreement, Prospect will assume Crozer-Keystone’s pension liability by funding $100 million of the obligations at closing and will provide distribution to pay all benefits owed to pension participants and beneficiaries within five years. The employees of Crozer-Keystone have no need to worry as Prospect will offer employment to all of those in good standing who are current at the closing date of the agreement at Crozer-Keystone. Prospect will also honor seniority levels and will enter into agreements with the labor organizations to which the employees of Crozer-Keystone belong.

Although Prospect committed to allowing Crozer-Keystone to operate similarly to how they were operating before, the acquisition means that Crozer-Keystone will now be a for-profit organization instead of a not-for-profit. This means that their tax status will change, and on top of being one of the region’s largest employers, the health system will become a large contributor to local and county tax revenues, according to a statement. Although it will now be a for-profit hospital, it will still be required to adhere to the same standards as a not-for-profit hospital.

“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 it’s community,” said Bruce Fischer, chairman of the Crozer-Keystone Board of Directors, in a statement.