Bankrupt healthcare giant with 181 hospitals and clinics begins closure process which will 'devastate' locals
- READ MORE: Landmark hospital chain files for bankruptcy
A bankrupt healthcare giant is shifting services to other providers as it braces for a full shutdown.
Prospect Medical Holdings — which filed for bankruptcy in January — has started moving key services from its two Pennsylvania hospitals, Crozer-Chester Medical Center and Taylor Hospital, to other providers in the state.
A lawyer for Prospect said in bankruptcy court on Thursday that services including obstetrics and gynecology would move out of the hospitals.
The move comes as the healthcare company prepares for a full shutdown of its Pennsylvania facilities that it has been threatening for months, The Wall Street Journal reported.
Prospect operates 16 hospitals and more than 165 clinics across California, Connecticut, Pennsylvania and Rhode Island.
Once an aggressive acquirer of struggling hospitals, Prospect collapsed under mounting debt earlier this year.
In Rhode Island, two of its facilities — Roger Williams Medical Center and Our Lady of Fatima Medical Center — are expected to be sold to another healthcare provider.
But Prospect has been trying to hammer out a similar rescue deal with an unnamed buyer who could rescue the Pennsylvania facilities for months, but with no luck. Doctors have warned that their closure would 'devastate' local residents.
Some obstetrics and gynecology services are moving out of Crozer-Chester Medical Center in Pennsylvania
Some services will move out of Taylor Hospital as Prospect Medical Holdings prepares for a possible full shutdown of the facility
In recent months, Prospect received $40 million in aid from state and local governments and local nonprofit Foundation for Delaware County, The Wall Street Journal reported.
But requests for additional funding were denied, William Curtin, a lawyer for Prospect, said at a bankruptcy hearing in Dallas on Thursday.
The hospital operator raised an additional $6 million — mostly from a potential buyer willing to assume leases and equipment at two medical offices, the court heard.
This should help Crozer-Chester Medical Center avoid an 'abrupt closure', Judge Stacey Jernigan said at the hearing.
She also ordered Pennsylvania state officials to hold meetings with Prospect representatives and the Foundation for Delaware County to come up with a long-term solution to save Crozer.
Prospect plans to raise additional funds through the sale of minor Crozer assets in the coming weeks, the outlet reported.
The operator hopes this will keep the sale negotiations going and prevent a full hospital shutdown.
Prospect operates 16 hospitals and more than 165 clinics across California, Connecticut, Pennsylvania and Rhode Island
Prospect Medical Holdings filed for bankruptcy in January (Pictured: CEO Von Crockett)
Doctors at Crozer said in a letter in March that closure of the facility 'will devastate not only our residents but also the thousands of employees and patients who rely on this network for their wellbeing,' Bloomberg reported.
State Rep. Leanne Krueger, whose district includes Crozer-Chester, told CBS News in March: 'All of the hospitals around us will feel the pain if Crozer closes, especially if it's a disorderly closure, which is what we've been trying to prevent.'
'So in the meantime, we've been expecting this could happen for quite a while because this isn't the first time Prospect has threatened a closure, they have been doing this for months.'
Prospect did not immediately respond to DailyMail.com's request for comment on a potential closure of the facilities.
Prospect is not the only major hospital chain which has filed for bankruptcy in recent years.
Landmark, which operates six specialty hospitals across Florida, Missouri and Georgia, filed for Chapter 11 bankruptcy last month.
The company, which is run by CEO Bryan Day, filed for bankruptcy in Florida on March 9 with debts of between $50 million to $100 million.
It is not yet known whether Landmark plans to close any hospitals as part of its bankruptcy proceedings, or if facilities will continue to operate as normal.
Problems at Landmark also came less than a year after the collapse of Steward Health Care, a major hospital system backed by private equity.
Steward, which owned more than 30 hospitals across eight states, was reported by CBS to have been drained of hundreds of millions of dollars by private equity investors, potentially contributing to shortages of life-saving medical equipment.
The Steward bankruptcy drew government scrutiny and prompted debate about the regulation of private-equity owned hospitals whose failure could lead to devastating consequences for local communities.
