Chester County Hospital to join U. Health System
The suburban hospital faced a $2 million operating loss last fiscal year
January 13, 2013, 8:31 pm·
Carolyn Lim | DP
The Chester County Hospital and Health System, a suburban hospital west of Philadelphia, announced Friday its intent to join the University of Pennsylvania Health System.
TCCHHS’s long search for a corporate partner began in August 2012, and ended with the signing of a non-binding letter of intent — the terms of which have not yet been released. The two parties hope the deal will be completed this spring notwithstanding legal complications and the process of regulatory review.
TCCHHS faced a $2 million operating loss last fiscal year. The board decided that it could not raise the money to undergo a multi-million dollar expansion that would add a “new patient tower” with “72 private patient rooms” — and so it sought a partner, according to a recent press release.
Because the deal is not yet finalized and Penn retains the right to conduct due diligence — to analyze and review TCCHHS in preparation for the merger — HUP spokesperson Susan Phillips could only say that the hospital was “pleased to have taken this first step in developing a deeper relationship with The Chester County Hospital and Health System.”
Ralph Muller, CEO of UPHS, said in the press release that TCCHHS “is an outstanding organization, and its incorporation into our Health System would bring significant benefit to both institutions and the communities we serve.”
Although the hospitals are not officially incorporated, TCCHHS is already a part of the Penn Cancer Network. The two also collaborate in the fields of radiology, radiation oncology and maternal fetal medicine.
Hospitals in general operate with a narrow bottom line that makes expansion a risky proposition, and by joining the UPHS, TCCHHS may be able to meet its needs while continuing to grow.
The merger with UPHS comes at a time when many independent hospitals in the Philadelphia area are joining larger health systems or simply being bought — like Lower Bucks and Roxborough Memorial Hospitals, which were acquired by Prime Healthcare Services Inc. in 2012.