Prospect Medical Holdings to Sell Two Shuttered Pennsylvania Hospitals for $13M

Prospect Medical Holdings, a for-profit healthcare system, has reached tentative agreements to sell two of its closed hospitals in Pennsylvania for a combined $13 million. This development marks a significant step in the company's ongoing bankruptcy proceedings and could potentially conclude a tumultuous chapter in Delaware County's healthcare landscape.

Sale Details and Prospective Buyers

Crozer-Chester Medical Center, one of the shuttered facilities, is set to be acquired by Chariot Allaire Partners for $10 million. Meanwhile, Springfield Hospital has attracted a joint offer of $3 million from Restorative Health Foundation and Syan Investments. These proposed sales, detailed in documents filed with the bankruptcy court last week, are subject to objections until Monday, after which U.S. Bankruptcy Judge Stacey Jernigan will review the terms.

Crozer Health's Troubled History

The potential sales come after years of conflict between Prospect Medical Holdings and state regulators over management practices and failed attempts to divest the Crozer Health system. Prospect acquired Crozer, then a four-hospital system, in 2016 for $300 million, pledging to maintain operations for a decade. However, over the course of nine years, Prospect closed all four hospitals, citing financial difficulties.

The closures began in 2022 with Delaware County Memorial Hospital and the cessation of inpatient care at Springfield Hospital. These actions prompted legal action from former state attorney general Michelle Henry in 2024. The situation escalated when Prospect filed for bankruptcy earlier this year, leading to the closure of Crozer-Chester Medical Center and Taylor Hospital due to insufficient funds to continue operations.

Impact on Delaware County Healthcare

The closure of Crozer Health facilities has had a profound impact on Delaware County, prompting a state of emergency declaration. The shutdowns have disrupted healthcare access, particularly emergency services, and resulted in thousands of job losses. The county has long sought to diminish Prospect's influence in the region's healthcare system.

In recent months, Prospect has made progress in divesting its properties. Delaware County Memorial Hospital was sold to the Upper Darby School District in August, while Taylor Hospital was acquired by KQT Aikens in September. The current proposed sales of Crozer-Chester Medical Center and Springfield Hospital represent the final step in Prospect's exit from the Delaware County healthcare market.

As the bankruptcy proceedings continue, Judge Jernigan has granted Prospect the authority to abandon the two hospitals if buyers cannot be secured, underscoring the urgency of the current sale negotiations. The outcome of these sales will likely have lasting implications for healthcare provision in Delaware County and serve as a cautionary tale in the broader context of for-profit healthcare management.