Crozer Health layoffs: High staff, supply costs lead to restructuring

Crozer Health is laying off 215 employees, or 4% of its workforce, as part of an organizational restructuring.

Upland, Pennsylvania-based Crozer, which operates four hospitals, said Wednesday the changes stem from financial struggles, including the effects of the pandemic and rising costs for staffing, supplies and pharmaceuticals. The for-profit system, which is owned by Prospect Medical Holdings, also noted the negative effects of failed payer contract renegotiations and litigation related to Delaware County Memorial Hospital’s proposed transition to a behavioral health facility. 

The layoffs come seven months after Wilmington, Delaware-based ChristianaCare Health System backed out of its planned acquisition of Crozer, citing the current economic landscape. The deal would have transitioned Crozer to nonprofit status.

The restructuring will eliminate overlaps in administration and cut underused services, the system said. Affected locations include the sleep center at Taylor Hospital, cardiac rehabilitation at the Springfield Hospital campus, wound care at Springfield and outpatient drug/alcohol treatment at Crozer-Chester Medical Center, a spokesperson said.

Crozer gave affected employees 60 days’ notice of the planned layoffs this week. Employees can be considered for open positions or receive transition support while finding other jobs, the system said.

The reorganization would “ensure that resources are properly allocated to meet our patients’ and our communities’ most pressing health care needs” while the system addresses its financial losses, Crozer CEO Anthony Esposito said in a news release Wednesday.

The system said it is losing about $7 million a month, down from the $12 million estimated six months ago when it announced a planned repurposing of Delaware County Memorial to help cut costs. The plan drew opposition from community members, including a lawsuit from the nonprofit Foundation for Delaware County filed last year, arguing that parent company Prospect agreed in 2016 to provide acute care services for at least a decade at the Crozer system’s four hospitals.

In October, a Pennsylvania judge temporarily blocked Crozer’s plan to close Delaware County Memorial. However, a month later, the Pennsylvania Department of Health halted patient admissions and emergency care at the hospital due to understaffing.