After closure of two hospitals in Delco, officials rally to keep private equity out of health care

Yahoo

16-05-2025

Located outside of Crozer-Chester Medical Center in Upland, Pa., which recently closed (Capital-Star photo by John Cole)
Nearly two weeks after Crozer-Chester Medical Center officially closed its doors, Gov. Josh Shapiro and state lawmakers in Delaware County gathered outside the building to rally support for legislation they believe would help prevent other hospitals from closing across Pennsylvania in the future.
'We are here today because Crozer was a critically important health care system right here in Delaware County, a health care system that has been forced to close its doors and stop serving its patients because of the greed and mismanagement of a private equity firm,' Shapiro said Thursday.
Crozer-Chester Medical Center and Taylor Hospital are both owned by Prospect Medical Holdings, a California for-profit healthcare company. Both closed their doors in the past month, leaving the fifth most populous county in Pennsylvania with just two hospitals, as the private equity firm filed for bankruptcy.
'I am done letting private equity wreak havoc on our health care system, wreak havoc on our communities, treating our hospitals like a piggy bank that they can drain and then smash on the floor. Those days are over,' Shapiro said. 'The time for action is right now. It is long past time to stand up for our local hospitals and nursing facilities and put in place real safeguards against private equity and for our community.'
Peggy Malone, who's president of the Crozer-Chester Nurses Association, described what Prospect did as 'immoral, devastating' but 'legal,' due to current state laws. She noted previously closed Springfield Hospital and Delaware County Memorial Hospital over the past few years as additional examples from Prospect.
'I knew the health system before Prospect Medical came into our lives and created our nightmares. I can tell you, because I was here,' said Malone. 'We let the wolf in the door here in Delaware County, and we can never, ever do that again. The wolf, an out of state private equity-funded company came in and ruthlessly, without hesitation, without shade, ate us all up.'
Dr. Max Cooper, who was an ER doctor at Crozer until its recent closing, said that one day after the hospital closed, a male victim was shot in the chest by a gun one block away. Since the hospital was closed, the man died during the 30-minute trip to Lankenau Medical Center in neighboring Montgomery County.
Shapiro and lawmakers in Delaware County's delegation on hand for Thursday's press conference say they believe House Bill 1460 and Senate Bill 322, dubbed the Health System Protection Act, would help prevent closures like Crozer from happening in the future.
The proposal would stop lease back arrangements, where private equity firms force hospitals to sell off the land the facilities are built on, to then rent back those spaces at what Shapiro called, 'ridiculously high prices.'
The legislation would also empower the state Attorney General's Office to review and, if necessary, block or place conditions on sales involving healthcare institutions to for-profit entities, like Prospect.
Attorney General Dave Sunday's office told the Capital-Star that they are currently reviewing drafts of this legislation and 'look forward to a robust negotiation process.'
'Attorney General Sunday is a staunch advocate for Pennsylvanians in every part of the Commonwealth to have access to affordable health care,' his office said in a statement. 'This is a stance he will not relent from, and this office will be engaged in any and all matters in which we have authority to promote healthy communities.'
Sen. Tim Kearney (D-Delaware), who sponsored the measure, said this is the third legislative session that they have tried to address the issue. It passed the House in a previous session, but it did not make it through both legislative chambers.
In recent months, he says he believes the tone of the conversation has recently changed.
'Both parties are now taking it more seriously than ever before,' Kearney said.
The proposal in the House is slated to receive a vote in the first week in June.
Rep. Lisa Borowski (D-Delaware), who sponsors House legislation calling for reforms, highlighted her personal connection to the recently-shuttered hospital. In addition to working in healthcare for 30 years and being the daughter of a physician and a nurse, she noted that she gave birth to her first son at Crozer Health.
As a result of the closure, Borowski pointed out that 2,651 people are now out of a job and hospitals, like Riddle Hospital, six miles away, are being overwhelmed with the excess of people who were previously being treated at the two former facilities owned by Prospect.
The state Department of Labor and Industry has been working to connect the workers who lost their jobs in the hospital with employment resources, holding a job fair at Subaru Park earlier this week. The state is also putting forward $1 million to ensure that EMS services remain available in the county following the closures of those hospitals.
The Capital-Star is seeking comment from Prospect.
While similar legislation to help prevent hospital closures was introduced in previous sessions, there is a difference this time around. Unlike last year, the current bill does not include oversight of nonprofits hospitals by the attorney general's office.
Kearney said he would prefer that both hospitals owned by private equity firms and non-profits were included. But, he recognized that the proposal didn't get across the finish line in the previous session with that language and is hoping to get the bill to a point where enough lawmakers vote in support of the reforms.
'There are, as you can imagine, a lot of fairly powerful interests that are at work here, including the Hospital and Healthsystem Association of Pennsylvania (HAP), who opposed the bill last year,' Kearney said.
However, Kearney said they've been working 'very hard to get to a point where we can get them to neutral,' on this proposal.
Shapiro also echoed a similar tone, noting that the General Assembly is divided between Democrats and Republicans. He would prefer to have a more broad version of the measure, but recognizes compromise may be needed.
'I want to have a strong bill, a bill that protects communities from the kind of profit seeking motives that we saw here in Delaware County, but I'm never going to let perfect be the enemy of possible,' Shapiro said.
Shapiro and other lawmakers talked at-length about wanting to hold Prospect 'accountable' for closing multiple hospitals.
'We know who did this. Prospect did this, plain and simple, and they didn't have to do this,' Shapiro said. 'They stripped so much money out of this health system that they can no longer even make payroll to great nurses and doctors and medical staff and others who poured their heart and soul into this hospital.'
'But the thing is that money didn't just vanish into thin air, that money that they sucked out of this institution is lining the pockets of those executives at Prospect,' he added. 'Their ill-gotten gains deserve greater scrutiny.'
Over the last seven months, Shapiro said that the state put up than $15 million to try and keep the hospital open.
The Attorney General's Office is fighting Prospect in bankruptcy court.
State Rep. Leanne Krueger (D-Delaware) asked them 'to do everything they can, to claw back the money that we have invested into this system and to hopefully open a criminal investigation, so these guys are truly held accountable.'
When asked if he believes criminal charges should be filed against Prospect, Shapiro said that it's a question for the attorney general's office. A spokesman for Sunday did not respond to a question about a criminal investigation.
Following the closing of Crozer, there are 13 hospitals in Pennsylvania that are still owned by private equity firms, according to the Private Equity Stakeholder Project (PESP).
'I'm concerned about the quality of care in those communities. I'm concerned about our rural hospitals, especially, that are teetering on the edge, those owned by private equity, and even some that aren't particularly with the Medicaid cuts that are being contemplated in Washington,' Shapiro told reporters. 'So, I'm very very worried about that.'
Shapiro said that legislation couldn't go back and undo a transaction that legally took place, so the private equity firms would still own those hospitals, if those proposals were enacted into law. However, he said it remains to be seen whether or not the attorney general gets additional authority as part of this legislation to manage healthcare institutions that are currently owned by private equity.
Shortly following the end of the press conference, a car attempted to pull into the hospital parking lot with what appeared to be a medical emergency involving a baby, who was seen by medical professionals on-site.
Peggy Malone, president of the Crozer-Chester Nurses Association, told reporters following that incident it was an example of why the hospital needs to remain open.
'Not one child should ever die because those bastards closed our hospital,' Malone said, visibly upset. 'They never cared about the people in this community. But, we do, and this is why we've been fighting so hard and somebody has to open our ER now.'
Malone said since their hospital isn't open, the baby would have to be treated at the closest hospital, about 30 minutes away.
'If that child had died today, the devastation that would have caused that entire family, it's unbearable, and this can't happen,' Malone said. 'It has to stop now, get our ER open, now.'
'There's no reason that that ER is closed. Get Prospect out of here. Hold them accountable, and open our ER now,' she said, which was followed by applause for others also standing by.
Malone said there are units and floors that could be opened to treat these emergencies and said Prospect is in the way of that happening.
'Get us in there. We will take care of this, but there are units in there that can be restored,' Malone said.
'You could keep us up and going. It might be smaller. It might not look like this, but get us open,' she added. 'No baby should die.'