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The California-based owners of Delaware County’s largest hospital system say it’s the last call for a lifeline of funding before it initiates closure protocols this week at Crozer Health, absent an immediate sale agreement.
Bankruptcy attorneys for Prospect Medical Holdings say they are searching for at least $9 million to keep Crozer-Chester Medical Center and Taylor Hospital open and gain more time to secure a new buyer for the health system.
During a Tuesday hearing, Prospect attorney Bill Curtin informed U.S. bankruptcy Judge Stacey G. C. Jernigan of the Northern District of Texas that if that requested amount doesn’t come through by Wednesday evening to pay for daily operational costs, including payroll, the hospital system could begin diverting ambulances and patients to other facilities as soon as Thursday morning.
Curtin said keeping the system open and getting to a final sale agreement is the desired goal, but if money runs out, Prospect has a short window when it can still pay workers as it safely discharges and transfers patients to other facilities without compromising care.
“We’ve fought tooth and nail to avoid the closure decision for months,” Curtin said. “But unfortunately, we’re just running out of time and money.”
An unnamed consortium of potential nonprofit buyers remains far apart on the issue of long-term funding for the hospitals, according to Curtin, who added that a deal is not within reach this week.
To date, about $20 million in taxpayer money — $10.2 million from the Commonwealth of Pennsylvania and $9.8 million from Delaware County — has been used to keep the remaining Crozer hospitals afloat. The community nonprofit Foundation for Delaware County has contributed an additional $20 million.
“How many more infusions do we need here?” Jernigan asked in Tuesday’s hearing.
Jernigan expressed disappointment in the stalled progress of a sale. She urged members of the unnamed consortium of potential buyers to understand the high-stakes situation, especially for hospital workers and their patients.
“I can’t imagine what they are thinking and feeling,” Jernigan said. “I fear we’re at the end of the road.”
The bankruptcy judge also stressed to potential buyers that money being put into a sale would be dedicated to keeping the hospitals open. “Not one dime” would turn into profit for the bankrupt Prospect or its creditors.
Attorney Scott Cousins, who represents the Foundation for Delaware County, said the nonprofit was “tapped out at the $20 million” funding contribution and claimed that the organization has been left out of updates on sale negotiations.
“We were only in for the short-term plan,” Cousins said. “We are done.”
Cousins initially requested that his client be included in future sale negotiations, which proposed additional funding from the foundation. He cited other financial pressures facing the nonprofit and funds that have already been committed to other projects.
Jernigan said she was “baffled” at the foundation’s long-term priorities.
“I want somebody to be a hero here,” Jernigan said.
She ordered an early Wednesday morning video conference between the parties to reach a resolution.
“Sometimes hospitals close in bankruptcy, and it’s horrible when it happens,” Jernigan said. “And I don’t want it to happen.”
In a statement provided to WHYY News, foundation president Frances Sheehan said the $20 million contribution was to cover the hospital’s short-term needs while a long-term plan was developed.
“While the Foundation was hopeful that its significant contribution to this incredibly urgent situation would have borne fruit, the Foundation, like all stake holders involved, the State, the County, the employees, doctors, nurses, patients, staff and residents of Delaware County, are waiting and hoping for a long term plan to surface that will address the situation and such a plan has not yet been provided by anyone,” Sheehan said.
The state indicated it was working the phones to locate funding to keep the hospitals afloat while it continues to pursue a sale with the mentioned consortium. But Melissa Van Eck of the Pennsylvania Office of Attorney General said progress on that front has been complicated by Prospect’s years of “mismanagement” preceding its bankruptcy and the system’s continued need for support.
“Previously, there was some concern that this is another attempt at Prospect crying wolf, threatening to close and they’re not going to,” Van Eck said, but added that all parties do now recognize the urgency to reach a final resolution as the fate of the hospitals hangs in the balance.
Editor’s note: The Foundation for Delaware County is a WHYY supporter. WHYY News produces independent, fact-based news content for audiences in Greater Philadelphia, Delaware and South Jersey.
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