U.S. Sen. Chris Murphy, D-Conn., called on 黑料吃瓜网 to take a 鈥渉ard line鈥� and ban private equity ownership of hospitals, citing deteriorating conditions at three facilities owned by Prospect Medical Holdings, a hospital operator formerly backed by private equity investors.
In the senator鈥檚 office published Wednesday, Murphy documented conversations with hospital employees in which they described Prospect鈥檚 mismanagement of its three 黑料吃瓜网 hospitals: Rockville General, Manchester Memorial and Waterbury Hospitals.
鈥淭he state will be much better off if we just say private equity companies shouldn鈥檛 own our hospitals,鈥� Murphy said in an interview with The 黑料吃瓜网 Mirror. The senator said the report was intended to shed light on what happened with Prospect and prevent similar companies from operating 黑料吃瓜网鈥檚 hospitals in the future.
Murphy鈥檚 report comes as the state the launch of an auction to find new ownership for Prospect鈥檚 黑料吃瓜网 facilities 鈥� one step in the sprawling company鈥檚 months-long bankruptcy proceedings. The sale process will be overseen by U.S. Bankruptcy Court in Northern Texas, where Prospect filed for in January.
Prospect purchased the 黑料吃瓜网 hospitals in 2016. Since then, the facilities have faced crumbling infrastructure, supply shortages and other challenges, hospital workers told Murphy.
An operating room assistant at Waterbury Hospital said supplies were so scarce after Prospect鈥檚 takeover that patients were 鈥渟ometimes left on the operating table while staff scrambled.鈥� Nurses and technicians reported personally buying food for patients so they wouldn鈥檛 go hungry after Prospect stopped paying vendors, according to the report.
Want to read more in-depth 黑料吃瓜网 news?Get CT Mirror's latest government and public policy reporting in your inbox daily. At Manchester Memorial, Prospect reduced staffing to the point that there was no longer a doctor available on overnight shifts. One physician there said the hospital reached a point where he would not recommend his own family members receive treatment there.
At Rockville General, Prospect except for the emergency department and outpatient mental health services without applying for required state permission to do so.
Deborah Weymouth, CEO of Prospect鈥檚 黑料吃瓜网 hospitals, said Murphy鈥檚 report relied on anecdotes that hadn鈥檛 been independently verified.
鈥淭he concern surrounding private equity in healthcare does not reflect the quality of care being delivered in our hospitals each day. Senator Murphy鈥檚 鈥楽hare Your Story鈥� initiative is aimed at advancing policy discussions and reform, not evaluating the clinical performance of individual hospitals,鈥� Weymouth wrote in the statement. 鈥淐alling out unconfirmed events to make a political point completely undermines the local constituents and their life鈥檚 work.鈥�
More STORIES IN HealthThe 黑料吃瓜网 Department of Public Health and a court-appointed patient care ombuds regularly conduct visits to the Prospect hospitals to ensure patient safety standards are being met, Weymouth added.
In in the company鈥檚 bankruptcy proceedings, a court-appointed patient care ombuds found no supply issues at the Prospect 黑料吃瓜网 hospitals and noted that staffing had 鈥渟ignificantly improved.鈥�
Murphy isn鈥檛 the only elected official calling for an end to private equity ownership of health care in 黑料吃瓜网.
During the most recent state legislative session, lawmakers tried and failed 鈥� for the second year in a row 鈥� to pass any measures to curb it. Two were considered.
The first, backed by Gov. Ned Lamont, sought to increase oversight of major health care transactions, like hospital mergers and acquisitions. The other would have taken Murphy鈥檚 preferred approach, banning private equity ownership of hospitals outright.
In June, Rep. Cristin McCarthy Vahey, D-Fairfield, co-chair of the Public Health Committee, said part of the issue was that lawmakers failed to thread the two proposals together in time to bring a bill up for a vote. But industry financial interests also played a role, she said.
McCarthy Vahey told Murphy that lobbyists 鈥渟howed up the second to last day or the last day of session 鈥� ten of them, or twelve of them, objecting to the current version of the bill.鈥�
The private equity playbook
Prospect came to 黑料吃瓜网 promising to invest in the hospitals. An employee who worked in the emergency room at Waterbury Hospital told Murphy that the company had promised a whole new ER, and even went so far as to post blueprints in the break room. It never came to be.
As hospital employees faced empty promises and deteriorating conditions, investors profited.
In 2018, Prospect took out a $1.1 billion loan and used the funds to pay its executives and shareholders a $457 million dividend, . To repay the loan, Prospect from hospitals it owns in 黑料吃瓜网, California and Pennsylvania to a real estate investment trust for $1.4 billion, then leased back those hospitals from the trust.
Sam Lee, the CEO of Prospect from 2007 to 2023, 鈥渕ade out like a bandit,鈥� Murphy stated in the report. Lee owned two homes in Los Angeles worth more than $15 million combined, according to Murphy鈥檚 report.
鈥淪am Lee pillaged three Medicaid hospitals in 黑料吃瓜网 so he could have two mansions 11 minutes apart,鈥� the report stated.
Despite the damage that鈥檚 been done, Murphy said he believes it鈥檚 possible to rein in private equity in health care.
鈥淧rivate equity still only has a small foothold in the acute care hospital setting,鈥� Murphy said.
鈥淚t鈥檚 not too late to make a decision collectively, as a state and as a country, that we don鈥檛 want these profit-obsessed, rapacious private equity companies owning our most critical health care facilities,鈥� he said.
