Newly acquired Crozer-Keystone opens Broomall center
Crozer-Keystone Health System on Saturday celebrated the opening of a new outpatient center in Broomall, expanding the Delaware County system's reach into territory wealthy competitors have long mined for patients.
Crozer-Keystone Health System on Saturday celebrated the opening of a new outpatient center in Broomall, expanding the Delaware County system's reach into territory wealthy competitors have long mined for patients.
But Crozer's chief operating officer, Patrick Gavin, rejected the notion that Crozer was edging toward the Main Line with the $16.5 million facility in a former Pathmark, on Lawrence Road near Route 3, that was gutted and totally rebuilt.
"This is traditional Delaware County," Gavin said after the ribbon-cutting, as guests wandered through the 50,000-square-foot center, which offers one-stop shopping for primary care, X-rays, cancer care, and other health services.
The opening of Crozer-Keystone at Broomall, 1.5 miles north of a slightly larger Main Line Health outpatient center in the Lawrence Park shopping center, follows Crozer's announcement of a definitive agreement to be acquired by a for-profit California firm.
The Broomall facility is Crozer's third outpatient center. The others are in Media and Concord Township, where, in keeping with the region's competition for health-care dollars, Main Line Health is spending $47 million on a 131,500-square-foot center not far from Crozer's operation there.
Crozer has outpatient services at its hospitals, but "by their nature, hospitals are harder to get in and out of," Gavin said. Dedicated outpatient centers provide the "retail experience" people are looking for, he said.
The sale of the tax-exempt Crozer to Prospect Medical Holdings Inc. would be the Philadelphia region's biggest transfer of a tax-exempt health system to a for-profit since the 1998 sale of eight Allegheny Health, Education, and Research Foundation hospitals to Tenet Healthcare for $345 million.
Exactly how much Prospect has agreed to pay for Crozer, which operates four hospitals - in Chester, Drexel Hill, Ridley Park, and Springfield - likely will not be made public until a petition seeking sale approval is filed in Orphans' Court. The system, formed in 1990 with the merger of Crozer-Chester Medical Center in Upland and Delaware County Memorial Hospital in Drexel Hill, has 598 licensed beds and is the seventh-largest system in Southeastern Pennsylvania.
Prospect has promised to invest at least $200 million in Crozer facilities in the first five years after it takes over. That's more than twice the amount cash-starved Crozer has spent on property and equipment during the five years that ended June 30.
Prospect, which is backed by the private equity firm Leonard Green & Partners L.P. and specializes in buying financially troubled hospitals, has also said it would assume Crozer's $198 million pension liability, contributing $100 million at closing, a Jan. 8 news release on the definitive deal said.
Crozer had $777 million in revenue in the year that ended June 30, making it a large purchase for Prospect, which owns 13 hospitals in California, Texas, and Rhode Island and had $1.3 billion in revenue in the year that ended Sept. 30.
Joshua A. Nemzoff, president of Nemzoff & Co., in New Hope, a mergers and acquisitions adviser to nonprofit health-care organizations, called the Crozer deal an "enormous risk" for Prospect. "It's much larger than anything they've bought in the past," said Nemzoff, who is not involved in the sale.
Prospect countered in a statement: "We are confident that we have the experience, expertise, and resources to improve Crozer-Keystone's financial condition and maintain it as a vital community health-care provider."
Employees at the opening said they were optimistic about Prospect.
"Our reaction is hopeful, that things will be better, or improved," said Kate Shields, a receptionist at the Crozer-Keystone Surgery Center at Haverford.
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