The effects of private equity on Delco’s health care
Kearney highlighted the necessity to remember Prospect’s “original sin.”
“In 2019, the private equity firm, Leonard Green & Partners, loaded Prospect Medical Holdings with hundreds of millions of dollars in debt in exchange for a massive stakeholder dividend,” Kearney said. “This weakened Crozer financially, turning it into a house of cards.”
Prospect first acquired Crozer in 2016. Henry asserted that Prospect agreed to keep acute care services at its four hospitals open for a period of no less than 10 years.
Now, only two of its hospitals are operational. Krueger said her district has been forced to live with the fallout of private equity.
“I have lost count of the number of times a nurse or doctor has reached out to me to tell me they didn’t have the supplies that they needed to treat their patients because Prospect refused to pay the vendor bill or that their caseloads were unmanageable because Prospect wasn’t willing to schedule enough nurses or doctors for that shift,” Krueger said.
Delaware County Councilmember Dr. Monica Taylor said these conditions are “unacceptable.”
“Our community is deserving of and should demand a health care system that prioritizes the well-being of its patients, supports its health care workers wholeheartedly and operates with a level of transparency and accountability that is beyond reproach,” Taylor said.
Prospect said it has made investments in the health system and the community since acquiring Crozer.
“These investments include more than $200 million in capital expenditures to upgrade facilities and acquire medical equipment, more than $657 million in charity and other uncompensated care provided to patients who were unable to pay in full for the services they received, and $200 million in contributions to the pension fund,” the company wrote in a statement.
The Pennsylvania Association of Staff Nurses and Allied Professionals (PASNAP), which represents nearly 900 Crozer employees, applauded Henry’s legal action in a press release.
“We look forward to the receivership both restoring the health system for the citizens of Delaware County and protecting the health system employees who have worked tirelessly, through the pandemic and after, to provide excellent care for our patients as a for-profit, out-of-state company prioritized financial returns over patient care and systematically dismantled our hospital system, piece by piece,” PASNAP wrote.
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