East Orange (N.J.) General Hospital and Prospect Medical Holdings, a for-profit hospital operator based in Santa Ana, Calif., have signed a definitive partnership agreement.
Under the agreement, Prospect will assume ownership of the hospital and make a total of $84 million in binding operational and capital commitments, including $52 million of capital expenditures over five years. Prospect has also agreed to assume the hospital's debt, provide working capital funding, maintain East Orange General as an acute-care facility and retain the hospital's employee and physician base, according to a news release. Additionally, Prospect's commitments include establishing a $10 million community health improvement initiative.
"We are excited at the opportunity to build upon East Orange General Hospital's long history of providing access to essential healthcare services," Sam Lee, chairman and CEO of Prospect, said in the release. "We are committed to strengthening the existing programs that the East Orange and Essex County communities have come to rely on over so many years, and to introducing new services and a new delivery model that will help meet residents' future healthcare needs. We look forward to the opportunity to help ensure the future of this vital community healthcare provider."
Prospect and East Orange General originally signed a letter of intent to pursue a strategic partnership this past March. The deal will now move through the required review and approval process by the state Department of Health and Senior Services as well as the state attorney general's office.
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