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CBS News
28-05-2025
- Business
- CBS News
After Crozer closure, confusion lingers amid wait for auction of Prospect Medical Holdings' medical campuses
The dust hasn't settled over the shutdown of the Crozer Health system in Delaware County, Pennsylvania. Two hospitals were wiped out in a bankruptcy reorganization, leaving dozens of primary care physicians unemployed, their practices closed and thousands of patients without doctors. CBS News Philadelphia has been tracking the effects, as well as following bankruptcy auctions of other medical campuses still operating under California-based Prospect Medical Holdings. The details of an auction that was scheduled for Tuesday have not been revealed. One health system involved in the bidding process is expected to issue a news release at some point Wednesday, sources say. Cloud of confusion hangs in air after Crozer Health closure There are small, isolated parts of the Crozer Health system that survived the widespread closures because they're independently owned businesses operating out of buildings not owned by Prospect Medical Holdings. But a cloud of confusion hangs in the air. "I love all of ya. But I love him the best," Viola Kilson said, surrounded by a group of doctors. Make no mistake, Kilson is grateful some of her doctors are still in practice. At 104 years old, she was among Crozer Health's most senior patients. She was blunt in her assessment of the system's collapse and financial ruin. "Catastrophe," she said. "I've been here since my family came from South Carolina in 1931." Earlier this month, CBS News Philadelphia met with Kilson at her ophthalmologist's office. They're still open in a post-Crozer world. That's because the building, adjacent to the shuttered Crozer Chester Medical Center, is not owned by its parent company, Prospect Medical Holdings. The doctors, who were formerly affiliated with Crozer, are independent of any system. Prospect Medical Holdings, the bankrupt private equity firm, closed two hospitals and scores of other medical offices last month. "Our building is adjacent to Crozer, but it is completely independent," Dr. John Witherell, an ophthalmologist, said. "We're able to function without Crozer. We will continue to function without Crozer." Witherell and Dr. Christopher Williams say the last few weeks have been terribly confusing. Their staff ramped up what feels like its own marketing agency, alerting patients they're still open, despite living in the shadow of a closed medical center. "To hear every fourth patient ask, 'Are you closing, are you shutting down, are you leaving us?' That's heartbreaking," Williams said. Other doctors, part of a cardiology practice, say people also assumed they were included in the widespread closures. They say their practice in Upland and Chester is vital. "A lot of our patients, this is walking distance, walking distance," Dr. John Godfrey of Cardiology Consultants of Philadelphia said. A month later, impacts of Crozer closure still felt in Delco CBS News Philadelphia has been investigating the impact of the Crozer Health shutdown. Former Crozer patients have told us they've spent hours trying to find new doctors. Some can't get appointments until next year. Kilson has yet to set up a new doctor. "It's really tough," she said. "I feel for the people younger than me. You just have to get on the phone, and my insurance was nice enough to send me two names." These doctors say there was no roadmap on how to manage what has become a medical crisis in Delaware County. "Today, to see the doors closed to the hospital and employees laid off, it's devastating emotionally and psychologically that this could all disappear," Williams said. "Just the overall disappointment as to where we were and where we are now and how it came to be that way," Witherell said. "I think it's sad. An entire health care system could implode." But these medical professionals are staying behind, and that's some comfort to Viola Kilson, who is heartbroken about what happened to Crozer. "Crozer is like home," she said. "It feels like home. And you're losing your home when you lose Crozer Hospital." Other Prospect facilities still open, such as medical centers in Glen Mills, Haverford and Broomall, are part of an auction process. These facilities were separated from the closure process because they were deemed viable, according to sources, who claim they are profitable. Prospect attorneys and a spokesperson did not respond to repeated requests for comment.
Miami Herald
27-05-2025
- Business
- Miami Herald
Controversial healthcare provider closes clinics, lays off staff
American healthcare providers have battled financial distress over the last year with several companies closing locations, selling off facilities, and in some cases filing for bankruptcy to reorganize their businesses and restructure debt. In 2024, five hospital operators filed for bankruptcy after 12 companies filed petitions in 2023. Private hospital operator, Steward Health Care, which operated 31 hospitals in eight states, filed for bankruptcy in May 2024 to sell its assets and reduce $9 billion in debt. Don't miss the move: Subscribe to TheStreet's free daily newsletter The debtor sold six hospitals in Massachusetts for $343 million in September 2024. Related: Key healthcare company files for Chapter 11 bankruptcy Hospitals and health center operator CarePoint Health Systems on Nov. 4, 2024, filed for Chapter 11 protection in the U.S. Bankruptcy Court for the District of Delaware to reorganize its unsustainable debt. As 2024 concluded, this year began with Prospect Medical Holdings and 66 affiliates on Jan. 11, 2025, filing for Chapter 11 bankruptcy protection with plans to reorganize or sell certain medical assets. The debtor, which employed about 12,600 workers, owned and operated 16 acute care and behavioral hospitals in California, Connecticut, Pennsylvania, and Rhode Island, providing a wide range of inpatient and outpatient services. Prospect Medical Holdings won bankruptcy court approval to close its two remaining Crozer Health hospitals in Pennsylvania - Crozer-Chester Medical Center in Chester, Pa., and Taylor Hospital in Ridley Park, Pa. - after failing to find a buyer for the properties. Next, Landmark Holdings of Florida LLC, the owner of six Landmark Hospital specialty hospital facilities, filed for Chapter 11 bankruptcy on March 9, 2025, to reorganize six facilities that are located in Florida, Georgia, and Missouri. Not all healthcare companies that close facilities need to file for bankruptcy. Healthcare provider Planned Parenthood North Central States revealed that it will close eight of its 23 clinics - four in Minnesota and four in Iowa - and consolidate the services of those facilities with its 10 other clinics in Minnesota and two in Iowa, Minnesota Public Radio reported. Related: Major health care company files for bankruptcy to sell assets The controversial healthcare provider also operates two clinics in Nebraska and one in South Dakota. More bankruptcy: Iconic auto repair chain franchise files Chapter 11 bankruptcyPopular beer brand closes down and files Chapter 7 bankruptcyPopular vodka and gin brand files for Chapter 11 bankruptcy Planned Parenthood North Central States said the closing of the eight clinics will result in the layoff of 66 staff members, reassignment of 37 workers, and a reduction of 35 more positions in other ways. "We have been fighting to hold together an unsustainable infrastructure as the landscape shifts around us and an onslaught of attacks continues," Ruth Richardson, the affiliate's president and CEO, said in a statement reported by MPR. In April, President Trump's administration froze $2.8 million in federal funds for Minnesota to provide birth control and other services, such as cervical cancer screenings and testing for sexually transmitted diseases, Planned Parenthood North Central States said. Five Planned Parenthood clinics in Minnesota provide abortion procedures, but under federal law, federal funds can't be used for most abortions. The regional Planned Parenthood affiliate blamed proposed cuts to Medicaid, which provides healthcare coverage to low-income Americans, and the Trump Administration's proposal to eliminate funding for teenage pregnancy prevention programs for its financial distress, requiring the closing of the clinics. The affiliate also cited Iowa's ban on abortions after about six weeks of pregnancy for causing the number performed there to drop 60% in the first six months the law was in effect, MPR reported. Related: Major bankrupt healthcare provider closes distressed hospitals The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Yahoo
25-05-2025
- Health
- Yahoo
Conn. regulator approves major reduction in services at Prospect-owned hospital
Rockville General Hospital is one of three hospitals in Connecticut owned by Prospect Medical Holdings. (Photo by Shahrzad Rasekh/CT Mirror) Connecticut officials reached a settlement with Prospect Medical Holdings clearing a path for the operator to permanently shutter all services aside from the emergency room and behavioral health at Rockville General Hospital in Vernon, according to an agreement published on May 23. Rockville is one of three hospitals in Connecticut owned by Los Angeles-based Prospect Medical Holdings, which filed for bankruptcy in January. The settlement signed on Friday between Prospect and the state of Connecticut concludes an ongoing state investigation into unauthorized service cuts at Rockville launched in October of last year. Prospect agreed that Connecticut will have a $300,000 claim included in the bankruptcy case as a result of the termination of services, subject to approval by the court. The terms require Prospect to maintain emergency services at Rockville for three years and keep existing inpatient behavioral health services 'at or within 30 miles of their current location on the RGH campus.' However, it doesn't require the operator to reopen services that were cut without state permission. The agreement also grants Prospect permission from the state's Office of Health Strategy, or OHS, to terminate Rockville's status as a full-service acute care hospital and convert it into a satellite campus of Manchester Memorial Hospital, located 20 minutes away. Prospect must now also obtain permission for the consolidation from the Department of Public Health, which oversees hospital licensing, Wendy Fuchs, a spokesperson for OHS confirmed. A spokesperson for the Department of Public Health did not immediately respond to a request for comment late Friday. In a Friday press release, OHS Commissioner Deidre Gifford said the agreement 'protects critical resources' for patients and families in the area. 'The agreement also holds the Prospect applicants accountable to the community, requiring public notice of past terminations and development of a strategic plan for the consolidated hospital. The plan must be developed with community input and presented to the community in a public forum,' Gifford's statement read. The agreement requires Prospect to announce the consolidation of Rockville with Manchester Memorial publicly, create an interim strategic plan for services at Rockville and hold a community forum within 60 days. Spokespeople with Prospect Medical Holdings and Eastern Connecticut Health Network, which owns Rockville General and Manchester Memorial, did not respond to a request for comment. In March, Suzanne Koenig, a bankruptcy-court appointed patient care ombuds reported that, during a visit to Rockville General, she found that surgical services, as well as the intensive care and medical-surgical units at the hospital had remained closed since March 2020. The company did not receive state permission to permanently close any of those services in advance of doing so. State law defines a termination of services as 'the cessation of any services for a period greater than one hundred eighty days.' Termination of services by a hospital without state approval can result in civil penalties of up to $1,000 per day. The unauthorized cuts were the subject of an October 2023 investigation by the Connecticut Mirror. When Prospect filed for bankruptcy earlier this year, state officials offered assurances that its three Connecticut hospitals would remain open and operating. 'Some people think bankruptcy means the lights go out and the party's over. That's not true at all. These hospitals are very successful,' Lamont said during a press conference in the days following the bankruptcy announcement. Although Rockville General will technically remain operational, it will no longer be a stand-alone, full-service acute care hospital. A spokesperson for Lamont did not return a request for comment. Rep. Tammy Nuccio, R-Tolland, whose district contains Rockville General Hospital, said Friday that the state had failed her residents. 'Profit over people. That's what I think we've come to expect here unfortunately from OHS and the state when it comes to health care for residents that are not in large cities,' Nuccio said. The agreement with the state will be binding for any future buyers of Prospect's Connecticut hospitals. Yale New Haven Health first reached a tentative agreement to purchase the three facilities from Prospect for $435 million in 2022. But the deal has been mired in complications since then, including lawsuits and, most recently, Prospect's bankruptcy. In February, Yale said it would be 'impossible' to close the deal. An auction process for the Prospect-owned hospitals will take place through bankruptcy court. In the state's Friday announcement, OHS said the process is 'ongoing.' In court documents, the sale hearing was tentatively scheduled for June 5, but no notice of hearing has been officially posted and spokespeople for Prospect and their lawyers have not responded to multiple requests regarding the auction timeline. This article first appeared on CT Mirror and is republished here under a Creative Commons Attribution-NoDerivatives 4.0 International License. SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX
Yahoo
16-05-2025
- Health
- Yahoo
Crozer closure: Gov. Shapiro calls for passage of bill to prevent private equity ownership of state healthcare
The Brief Governor Josh Shapiro joined healthcare workers in Chester nearly two weeks after Crozer Chester Medical Center closed. He's calling for the passage of the Health System Protection Act. He wants impacted workers and patients to know they have his support. CHESTER, Pa. - On the heels of the closure of Crozer Health, Governor Josh Shapiro joined together with health care workers in calling on the Pennsylvania state house to pass the Health System Protection Act, in the hope of protecting Pennsylvanians from private equity taking over a health system. Local perspective Backers of the now closed Crozer Health System are using the wreckage of the shuttered hospital to press for a bill banning private equity in state healthcare while pushing for criminal charges against the for-profit owners. An EMT cradled an infant rushed to the shuttered Crozer Hospital by its mother, not breathing. Emergency care is offered, and a cry is heard. Peggy Malone is the President of the Crozer-Chester Nurses Association. She said, "If that child had died today, the devastation it would have caused the entire family. It's unbearable. It can't happen. It has to stop. Get our ER open, now!" What they're saying It happened at the end of a press conference in front of the empty Delaware County hospital with Governor Shapiro and advocates attacking Crozer's private equity-backed owner for the closure and urging reform. Governor Josh Shapiro said, "I'm done letting private equity wreak havoc on our healthcare system, wreak havoc on our communities." Shapiro, joined by local elected officials and former Crozer workers, came to press for legislation introduced in Harrisburg giving the state Attorney General the power to block the sale of Pa. hospitals to private equity firms. Dr. Monica Taylor is the Chair of the Delaware County Council. She said, "This is a simple story about greed. Prospect Medical Holdings came to town, bought Crozer, broke our healthcare system and paid themselves hundreds of millions of dollars to do it." Big picture view Crozer closed its doors on May 2nd, its companion hospital, Taylor, days earlier, after owner Prospect Medical Holdings declared bankruptcy and efforts to find new owners failed. Critics are urging Prospect's leadership to be criminally charged for the alleged stripping of the healthcare system. Shapiro is talking accountability. Asked if he supported criminal charges against Prospect executives, Shapiro said, "That is a question for the Attorney General." As Crozer locked its doors, so did its ER, putting lives, especially gunshot victims, say critics, on the line. Max Cooper is a former Crozer ER doctor. He spoke of one such victim, saying, "Because we were closed, EMS had to transport him 30 minutes away to Lankenau and 20 minutes into that trip his heart stopped, and he died." The other side In a statement, Prospect Medical Holdings wrote, "Contrary to the Governor's assertion, at all times, Prospect Medical negotiated and collaborated in good faith with the Commonwealth and other parties to find a viable path that would enable Crozer Health to remain open. This included arranging for Crozer, and all of its assets, to be transferred to any party supported by the Commonwealth for no cash payment free and clear of any claims, as well as keeping Crozer open for as long as possible post-bankruptcy to allow for a local solution to be achieved at the expense of its third-party creditors. The outcome is extremely unfortunate, and we are continuing to work to provide support for our patients and team members."
Yahoo
13-05-2025
- Business
- Yahoo
Private equity investors in Pennsylvania health care don't prioritize patients, critics say
This story first appeared in How We Care, a weekly newsletter by Spotlight PA featuring original reporting and perspectives on how we care for one another at all stages of life. Sign up for free here. Investors who buy up and sell health companies are drawing scrutiny from critics worried about diminished care and higher costs for patients. Private equity firms, as these investment groups are called, have a record of cutting services at health providers and leaving them with debt or gaps in care. Sometimes, the providers close, which is the case for Crozer Health's recently shuttered hospitals in Delaware County. They were owned by the private equity-backed Prospect Medical Holdings. Proponents argue private equity investments can help medical facilities by providing capital or outsourcing administrative duties. But critics such as the watchdog group Private Equity Stakeholder Project (PESP) say these firms are often extractive and focused on generating short-term profits that don't benefit patients. In Philadelphia and surrounding areas, private equity has established a large footprint, per a 2024 report from the group. The nonprofit's analysis includes facilities in eight eastern Pennsylvania counties, and in parts of New Jersey and Delaware. Around 650 of the 900 facilities listed in the report are located in Pennsylvania. To learn more about private equity's footprint in the region and why PESP chose to look into it, Spotlight PA spoke with Michael Fenne, a senior research and campaign coordinator at the organization. The conversation has been edited for length and clarity. Spotlight PA: This report seeks to give an idea of private equity's footprint in health care in the Philadelphia region. Why did you decide to track this? Michael Fenne: We wanted to identify the scope of private equity's presence in an area that had already experienced its risks. Pennsylvania has been the site of multiple closures in recent years of hospitals connected to private equity, most recently including two Crozer hospitals which had been affiliated with Prospect Medical Holdings, formerly owned by private equity firm Leonard Green & Partners. Despite those risks, there's a real lack of transparency around private equity investments generally. Private equity firms … don't have the same kind of reporting requirements that publicly traded companies on a stock exchange would have. We found approximately 900 locations for health care providers owned by [private equity] in just the Philadelphia area, but considering how difficult it can be to identify private equity-owned companies, we expect that number to actually be larger. Why, generally speaking, is private equity attracted to health care? They target areas that are fragmented with the hopes of consolidating certain health care subsectors. So nursing homes, cardiology, anesthesia providers, for example, they may try to consolidate in a given geographic market. And if they're able to do that, it gives them more power to set prices for patients and consumers, to determine wages for workers, and also to shape and determine what kind of services are provided in a given area. Also, they're seeking short-term profits. Private equity firms typically try to extract profits within three to seven years of investing in an area, and they think they can do this in health care. What challenges did you encounter in trying to gather this data? The biggest challenge is that there is limited information available on companies that private equity firms own and what those companies are doing. We identified which companies were owned by private equity through press releases and through public portfolio web pages of the private equity firms themselves. They're typically not required to disclose their holdings, so anything we know about companies that are owned by private equity usually comes from what they choose to disclose themselves or what's been uncovered by regulators or in bankruptcy lawsuits. We had to work off of that limited list of companies that we identified and just go through and map out all of the locations that they were operating from. Among the places you identified in the report, it seems like the top three most prevalent types of private equity-owned health care facilities in the Philly area are physical therapy, behavioral health, and dental offices. Is this in line with national trends? Dental health does seem to be in line with national trends from what we've seen released by other researchers recently. The other two areas, I can't confirm. Something about the areas that we identified as the most prevalent areas in Philadelphia … Those are the ones that we were able to identify through the method that we used, but it could be that a private equity-owned company that's not in one of those categories is very active, but we haven't identified it as private equity-owned. Why are these particular areas of health care attractive to private equity? Private equity is attracted to areas that are fragmented. They want to consolidate providers that operate in the same sub-industry, but are independent. They try to bring companies under one company umbrella. They use what are called platform companies to do roll ups of smaller providers. It's what the former FTC director referred to as a 'stealth consolidation' strategy. In physician practices, they'll use what are called medical services organizations, MSOs. They handle all of the administrative, billing, business side of running a health care practice. Physicians are attracted to this because it allows them to focus on providing care. But often when they come under the control of a platform company, it means less control of day-to-day operations and how many patients they're seeing and the processes involved with that. You've talked a lot about transparency. Would more transparency around private equity holdings be beneficial to Pennsylvanians, and why or why not? It would definitely be beneficial to Pennsylvanians — to patients, to health care providers, to any stakeholders in the Pennsylvania area, really. Patients, providers, and policy makers don't really know where their money is going when they pay a health care provider — whether it's going to the provision of care, whether it's going to pay off debt that was put onto a company by a private equity firm, or whether it's going to fund a private equity dividend. So there's a need for increased transparency around what private equity owns, and what they're doing with their money. How does private equity's stake in health care impact patients, and how might the care that people receive at facilities that are owned by private equity companies differ from the care that they might get at a nonprofit provider or some other type of for-profit facility? Private equity firms use a set of tactics that can undermine the financial health of the companies they own, and that can lead to reduced access of care for patients, and also reduced resources spent on care. So for example, last year, 21% of health care companies that went bankrupt were backed by private equity. We've also seen in the last few years at least four hospital closures in eastern Pennsylvania connected to private equity. With each of those closures, the patients at those hospitals have reduced access. They have to find new providers. They have to possibly drive farther for that new provider, and for those providers taking on the patients at the hospitals that close, it may mean they have fewer resources for each patient, or it may place an additional burden on them. What kind of response are we seeing from elected officials when it comes to addressing this? Specifically in Pennsylvania, the governor earlier this year called for legislation that would give the attorney general [the] ability to review mergers and acquisitions. He also notably called on limitations on sale-leaseback transactions, which would prevent [private equity] firms from making short-term profits by stripping hospitals and health systems of their real estate. We haven't seen that in a lot of other states. It's not just the transparency, but also the tactics that they're using that are important to regulate. There have also been federal efforts to rein in [private equity]. Last year, in the Senate, the Stop Wall Street Looting Act was introduced, and under the previous presidential administration, multiple regulatory agencies — including the Department of Justice, Health and Human Services, and the Federal Trade Commission — initiated investigations to examine the effects of private equity consolidation in various industries, including health care. If you learned something from this article, pay it forward and contribute to Spotlight PA at Spotlight PA is funded by foundations and readers like you who are committed to accountability journalism that gets results. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
