Crozer Health, a four-hospital system based in Upland, Pa., is laying off roughly 215 employees amid financial challenges, NPR affiliate WHYY reported.
The system announced the layoffs March 15 as part of its "operational restructuring plan" that "focuses on removing duplication in administrative oversight and discontinuing underutilized services." Affected employees represent about 4 percent of the organization's workforce.
"We made the difficult decision to restructure our operations in order to ensure that resources are properly allocated to meet our patients' and our communities' most pressing healthcare needs, while at the same time allowing us to stem the financial losses that threaten our ability to continue serving Delaware County," Crozer CEO Anthony "Tony" Esposito said in a written statement shared with Becker's.
The layoffs come as Crozer and its parent company, Culver City, Calif.-based Prospect Medical Holdings, struggle to pay vendors and contractors. Crozer said its finances have been negatively affected by rising pandemic and inflation-related costs as well as "the refusal of contracted health insurance plans to renegotiate the terms of their agreements to reflect this changed economic reality." The health system said the restructuring plan will also include renegotiation of contractual partnerships, continued discussion with payers and continued discussions on clinical affiliations.
Additionally, Crozer's plan to suspend operations at 168-bed Delaware County Memorial Hospital in Drexel Hill, Pa., and convert it into a behavioral health facility was further complicated by an order from the Pennsylvania Department of Health last November barring patient admissions and suspending emergency room services at the hospital due to alleged violations of health regulations.
Crozer said it was losing about $12 million a month when the decision was made last September to suspend operations at Delaware County Memorial, and that and other actions taken at that time reduced its monthly losses to about $7 million a month.
"These losses are clearly unsustainable in the long run, which underscores the need for the organization to take these actions now to help secure its future," the health system added.
Crozer said affected employees will be considered for open positions within the health system, while workers who transition out of the organization will be provided access to outplacement services.