Prospect Medical Holdings, owner of Crozer Health, files for bankruptcy

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Prospect Medical Holdings, the for-profit owner of Crozer Health in Delaware County, filed for Chapter 11 bankruptcy Saturday.

The company intends to focus on its operations in California as it looks to continue selling its hospital systems in Connecticut, Pennsylvania and Rhode Island.

“It does not mean that Prospect Holdings is going out of business,” the California-based company said in an online release. “Rather, Prospect Holdings is utilizing the Chapter 11 process to facilitate its organizational realignment as expeditiously as possible.”

During the bankruptcy proceedings, Prospect’s various medical centers and offices will remain open.

“Prospect Holdings strongly believes that the actions it is taking represent an important step forward in its longstanding commitment to best serve the interests of its patients, physicians, employees, and communities,” the company said.

Prospect acquired Crozer Health in 2016.

In an email sent to Crozer employees, Prospect CEO Von Crockett cited a number of challenges, including the “lingering impacts of the COVID-19 pandemic, inflation, a significant cyberattack and increased denials from health plans” as the impetus behind its decision.

The once-struggling four-hospital system in Delco is down to just two functioning hospitals: Crozer-Chester Medical Center in Upland and Taylor Hospital in Ridley Park.

State officials and local legislators have sparred with hospital management in recent years as Prospect slashed services and wards within Crozer.

Frances Sheehan, president of the Foundation for Delaware County, is “deeply concerned” about the impact of the bankruptcy filing. The community foundation was created following the original sale of the Crozer-Keystone Health System.

“Crozer Health is not just a hospital—it is home to a trauma center, burn unit, and stroke center, and serves as Delaware County’s largest EMS provider,” Sheehan said in a statement Sunday. “The Foundation will continue to advocate tirelessly for the residents of Delaware County, as our work to protect access to quality healthcare is far from over.”

The bankruptcy likely puts a pause on the Pennsylvania Office of Attorney General’s suit it filed in October against Prospect, accusing the company of mismanagement and “corporate looting.”