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East Orange General Hospital and Prospect Medical Holdings 
Enter Definitive Agreement to Preserve, Enhance Essential Healthcare Services in Region


EAST ORANGE, NJ - East Orange General Hospital and Prospect Medical Holdings, Inc. announced today that they have signed a definitive agreement that outlines the terms of a unique healthcare partnership which will preserve and enhance essential services for the residents of East Orange and its surrounding communities well into the future.  In February, the hospital announced that it had selected Prospect following an extensive review process facilitated by a Request for Proposal issued to over two dozen hospitals and health systems across the country.  

The Agreement includes several binding commitments by Prospect to strengthen the public health safety net in the region.  These operational and capital commitments total $84 million and include $52 million of capital expenditures over five years as well as maintaining East Orange General as an acute-care facility, retaining the hospital’s employee and physician base, working capital funding and assumption of East Orange General’s debt.  The total $84 million commitment also includes the establishment of a $10 million community health improvement initiative allowing the Hospital’s Foundation to work directly with patients, families, physicians and community leaders to promote and improve wellness.  The nonprofit Hospital Foundation will also serve as sponsor and guarantor of East Orange General’s Hope Gardens, the on-site residence facility for homeless behavioral health patients.

“This Agreement is a model for the State, emphasizing collaboration among hospitals, physicians, health plans and other providers,” said Kevin J. Slavin, President and CEO of East Orange General.   “By committing to preserve acute and behavioral health care services, retain our loyal employees and Board, and invest millions of dollars in new resources, Prospect has shown quite clearly that it is the ideal partner to help write the next great chapter for our community hospital.”  

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“Our hospital has been the gateway to primary and preventative healthcare for over a century.  With this partnership, Prospect honors that past and is delivering the substantial capital investment we need to be a strong, viable part of our region’s future,” Slavin added. 

Under the Asset Purchase Agreement between East Orange General and Prospect, all current programs and service lines will be maintained.   Prospect is a nationally recognized health system known for its high-quality services, particularly in areas such as behavioral health and primary care.  Prospect successfully operates a growing number of hospitals, health clinics, outpatient centers and physician networks, and has demonstrated a clear commitment to advancing the mission of East Orange General Hospital.  The Agreement announced today also includes the creation of an Advisory Board, made up of current East Orange General Trustees and other community leaders.  The new Advisory Board will be a vibrant presence and voice for the community, with the power to ensure that Prospect’s commitments are met. 

“Prospect’s ongoing success in operating urban hospitals similar to East Orange General has centered on a model that years ago prefigured the objectives of the Affordable Care Act,” said East Orange General Board Chairman Leonard Murray II.  “One of Prospect’s strengths is to bring together hospitals with physician groups and insurers that work together to promote a practical and thriving continuum of care.  They care deeply about ensuring access to care for everyone, regardless of circumstance.  That is what we have always stood for at East Orange General.”    

“We are excited at the opportunity to build upon East Orange General Hospital’s long history of providing access to essential healthcare services,” said Sam Lee, Chairman and Chief Executive Officer of Prospect Medical Holdings. “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.” 

With the signing of a definitive agreement, the transfer of ownership now will 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.   Public hearings on the acquisition are expected to be held later this year.

About East Orange General Hospital: 

East Orange General Hospital is East Orange’s largest private employer and Essex County’s only independent, fully accredited, acute-care hospital.  Serving the community for more than a century, East Orange General recently expanded its services and is continually adding new equipment and programs to provide the highest level of quality and compassionate patient care.  Specialty areas include: Same Day Surgery, Physical and Cardiac Rehabilitation,, Behavioral Health, Family Health, Emergency Medicine, Outpatient Hemodialysis, Hyperbaric/Wound Management, Vascular and Medical/Surgical Services.

About Prospect Medical Holdings:

Prospect Medical Holdings, Inc. is an innovative health care services company that owns 11 hospitals, with a total of approximately 1,457 licensed beds, as well as clinics and outpatient centers. Prospect also arranges for the provision of health care services for over 233,450, patients enrolled in its networks of over 8,900 primary care physicians and specialists.   Prospect’s hospitals are located in diverse, high-density population areas in Southern California and the greater San Antonio, Texas, region.

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