It is unclear what effect, if any, the deal will have on ChristianaCare’s interest in acquiring Crozer Health — the struggling, four-hospital system in Delaware County — from Crozer parent company Prospect Medical Holdings. The health care system said in the press release that the due diligence process for the transaction is ongoing.
Acquiring Jennersville “makes sense” for ChristianaCare, one of the largest providers in the mid-Atlantic, according to Mark Richman, vice president of InnoVative Capital, LLC, based in Springfield. Richman’s company serves as a financial advisor for hospitals and other entities, like housing agencies and municipalities nationwide. He has been keeping a close eye on the hospital shakeups that have been happening in his backyard.
“[Christiana] wants to get market share in the Pennsylvania area. They have an outpatient center already in Chadds Ford,” Richman said. “I think it would be really good for the community.”
Richman said that as a nonprofit hospital system, ChristianaCare sees southeastern Pennsylvania as an area where it can make an impact — especially with the financial troubles facing some of the region’s other providers.
However, he was also surprised that ChristianaCare entered into this deal while it was already in talks with Prospect to acquire Crozer. Now, two transactions could potentially happen almost simultaneously.
While Richman said it’s hard to say whether or not ChristianaCare is still interested in Crozer, he is concerned that the health system may be “over-leveraging” itself, similar to when Tower Health acquired Jennersville and Brandywine in 2017 and 2018.
Pulling Crozer out of a financial hole while trying to reestablish Jennersville would be a “large task,” Richman said.
Longer-term solutions for Pa. hospital woes?
Pennsylvania is one of just 15 states nationwide that does not have state regulatory mechanisms for handling events like hospital acquisitions and closures.
In Rhode Island, for example, a strict regulatory setup allowed the state to save two Prospect-owned hospitals from financial vulnerability. Pennsylvania officials were warned about Prospect’s history of siphoning money out of its hospitals but had no power to act.
The kind of regulatory mechanism that saved Rhode Island hospitals could help to protect Pennsylvania hospitals from future closures, Richman said.
“Pennsylvania, I believe, needs to meet to start to develop a protocol to protect health care — and there is none,” Richman said. “The counties don’t know what to do when their hospitals are going under.”
The status quo hasn’t been enough to help the region’s health care system.
“That’s a lot of lost health care. That’s a lot of lost jobs,” he said. “That’s a lot of patients who need help — and it only overcrowded other hospitals and caused a squeeze on resources.”