National legislation introduced last week would take hospitals and nursing homes out of the hands of private equity firms.
U.S. Rep. Mary Gay Scanlon (D-5) of Swarthmore and U.S. Sen. Chris Murphy (D-CT) introduced the Take Back Our Hospitals Act, which prevents private equity ownership of hospitals and nursing homes.
They announced the introduction in a March 26 release.
The legislation comes in the wake of the havoc caused by Crozer Health owner Prospect Medical Holdings, as it gutted Crozer Health hospitals, eventually closing them during bankruptcy proceedings.
“What happened to Crozer Health is a cautionary tale for communities all over the country,” Scanlon said.
The Take Back Our Hospitals Act would deny hospitals and skilled nursing facilities Medicare funds if they are owned by a private equity company, effectively prohibiting private equity ownership of these providers.
Private equity investment in health care has grown from $5 billion in 2000 to an estimated $104 billion in 2024.
The result has been higher prices, worse care, mass layoffs, and a record number of health care bankruptcies, Scanlon said.
“Private equity used Crozer as a piggy bank, ruthlessly and systematically draining what was once a four-hospital health system of every penny, and healthcare in Delaware County is still destabilized today, a year after Crozer’s doors closed,” said Maureen May, RN, president of PASNAP, the Pennsylvania Association of Staff Nurses and Allied Professionals, which represents more than 11,000 frontline caregivers across Pennsylvania.
Prospect Medical Holdings acquired the Crozer Health system with the promise of investment and better healthcare.
Instead, it drove Crozer into bankruptcy, closed four hospitals, laid off 2,600 health care professionals, and left Delaware County with just two hospitals to serve 585,000 residents, Scanlon said.
“Private equity’s general business model is pretty simple: find hospitals that are in dire financial straits, make promises to fix things, and then squeeze every cent they can out of patients before leaving communities to deal with the wreckage,” said Senator Murphy.
The proposed legislation has been endorsed by the American Economic Liberties Project, Public Citizen, Private Equity Stakeholder Project, Center for Health and Democracy, Pennsylvania Association of Staff Nurses and Allied Professionals, Service Employees International Union, National Consumer Voice for Quality Long-Term Care, Community Catalyst, National Nurses United, and the Committee to Protect Health Care.
Private Equity Influence
Rep. Scanlon has voiced the alarm about private equity’s influence over healthcare since taking office.
She’s been concerned about the financial practices of Leonard Green & Partners, a private equity firm that placed Prospect Medical Holdings facilities and patients at risk.
In June 2024, she detailed the damage inflicted on Crozer Health and Hahnemann University Hospital by their respective private equity owners in a response to an inquiry by the Federal Trade Commission, the Department of Justice, and the Department of Health and Human Services on consolidation and corporate greed in health care markets.
Read the entire press release on the Take Back Our Hospital Act legislation.
