Crozer-Keystone Health System has signed a letter of intent to enter into a partnership with Prospect Medical Holdings, Inc., as approved by the Crozer-Keystone Board of Directors. Both parties are currently performing due diligence in anticipation of reaching a definitive agreement.

Crozer-Keystone had announced in October of 2014 that it was exploring opportunities for such a strategic partnership. The proposed transaction is the culmination of an exhaustive examination of options for the five-hospital system.

“This is an exciting development for Crozer-Keystone Health System,” says Joan K. Richards, Crozer-Keystone president and chief executive officer. “In Prospect, we have selected a partner that shares our mission to improve the health of the communities we serve, and has the financial resources to make sure that the care we provide continues to rank among the best in our region.”

We will release further details as soon as a definitive purchase agreement has been finalized. The partners will also submit an application for regulatory approval at that time.

About Prospect Medical Holdings

Prospect Medical Holdings, Inc. is a healthcare services company that owns and operates 13 inpatient hospitals as well as 40 clinics and outpatient centers. Based in Los Angeles, California, Prospect manages the provision of healthcare services for approximately 270,000 members enrolled in its networks of more than 8,900 primary care physicians and specialists.

Prospect’s hospitals are located in diverse, high-density population areas in California, Texas, and Rhode Island. In addition, Prospect is actively seeking partnerships with hospitals in Connecticut and New Jersey.

Prospect has a strong reputation as an ethical and responsible healthcare company. Prospect is focused on population health and coordination of care, with an emphasis on wellness. Prospect also has a strong track record of working collaboratively with employees, physicians, medical groups, labor unions, payers and other providers, and communities.

Information and Frequently Asked Questions About the Announcement of a Letter of Intent Between Crozer-Keystone and Prospect Medical Holdings, Inc. 

Background 

In October 2014, we announced that Crozer-Keystone Health System was taking a proactive step to explore strategic options – specifically, to examine whether we should seek a partner or continue to remain independent. Our Board of Directors worked with skilled, experienced advisors Kaufman, Hall & Associates to take a careful, deliberate approach to this effort. The Board’s goal was to put Crozer-Keystone in a stronger position for the future and assure our ability to continue to meet the healthcare needs of our community and remain the county’s leading health system and employer.

What was the Board looking for in a potential partner? 

The Board was looking for the following in a partner:

• Continuing mission and commitment to communities served

• Commitment to employees

• Financial stability

• Strategic vision

• Dedication to quality improvement

• Medical staff alignment and education

• Value-based accountable care infrastructure and capabilities

• Governance involvement.

What’s being announced today? 

After an exhaustive examination of options, we are announcing today that our Board of Directors has signed a letter of intent with a partner.

A letter of intent is not a binding agreement, but it acknowledges a serious intention for two organizations to work with each other to achieve a transaction. Crozer-Keystone and Prospect are now conducting due diligence and negotiating terms of a potential deal.

The next step will be for the two organizations to reach a Definitive Agreement, which spells out the finalized terms of a deal. The anticipated timeline for Crozer-Keystone and Prospect to achieve that is by Thanksgiving of this year.

Because the Definitive Agreement will then have to go through regulatory approvals, the transition to Prospect will not occur until 2016.

Who has Crozer-Keystone signed a letter of intent with? 

Crozer-Keystone has signed a letter of intent with Prospect Medical Holdings, Inc.

Prospect Medical Holdings, Inc. is a healthcare services company that owns and operates 13 inpatient hospitals as well as 40 clinics and outpatient centers. Based in Los Angeles, California, Prospect manages the provision of healthcare services for approximately 270,000 members enrolled in its networks of more than 8,900 primary care physicians and specialists.

Prospect’s hospitals are located in diverse, high-density population areas in California, Texas, and Rhode Island. In addition, Prospect is actively seeking partnerships with hospitals in Connecticut and New Jersey.

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