(The Center Square) – Chester-Crozer Hospital is the nearest emergency department for thousands of residents, many of whom do not have private transportation.
When news broke that it may soon be closing, it shed light on the role of private equity in Pennsylvania’s health care system.
For now, doors are staying open thanks to funding from the Foundation for Delaware County, but a new buyer must be found soon.
The Senate Democratic Policy Committee met this week to talk about the impact of hospital closures like this and what can be done to prevent them. Medical professionals and policy experts testified about the damage done to hospitals run with the goal of maximizing profit for equity firms like the now bankrupt Prospect Medical Holdings.
“Private equity is draining the resources from our community and making it impossible for people to access care, whether that is primary care, specialty care, emergency care–it is all being taken away,” said Sen. Amanda Cappelletti, D-Norristown. “And we are seeing healthcare deserts being created all throughout Pennsylvania, not just in our rural communities but in some suburban and more urban areas, too.”
Cappelletti is among a group of senators sponsoring Senate Bill 320, a bill aimed at preventing for-profit entities from owning and managing hospitals within the state. The legislators and other advocates say that prioritizing profit leads to mismanagement, interference in patient care, and the liquidation of essential hospital assets.
“Since taking office in 2020, I’ve witnessed the systematic dismantling of our healthcare infrastructure,” said Sen. John Kane whose district includes Chester. He called Prospect’s business practices “unethical and disgusting.”
Prospect Medical Holdings purchased the Crozer-Keystone Health System in 2016. Within the system were Delaware County Memorial Hospital and Springfield Hospital, both of which closed in 2022. The Attorney General’s office filed suit against Prospect last year to appoint a receiver to manage the company’s remaining assets, including Crozer-Chester.
The office claimed that “Prospect Medical has broken an Asset Purchase Agreement, approved by a court in 2016, by cutting services and closing facilities, while diverting funds to private shareholders and investors, rather than supporting the healthcare network.”
“Investors is a misnomer because a lot of what we’re seeing is extraction. It’s not truly investment,” said Mary Bugbee, health care director for the Private Equity Stakeholder Project.
The funds those hospitals provide largely come from public sources. About 25% of hospital revenue comes from Medicare and another 19% from Medicaid.
Kristen Rodack, executive deputy secretary of the Department of Health, noted that as of January of last year, about 460 hospitals across the U.S. were owned by private equity firms, including 13 in Pennsylvania. Nine of those are owned by a single company, Apollo Global Management. Once the sale has been made, the state has little visibility into a firm’s choices or the structure it imposes.
Doctors say that when staffing and treatment choices are made to cut costs and maximize profits, both patient care and staff morale suffer. Ultimately, the circumstances lead to more people with less access to care and fewer professionals working in the field.
“Our workplace has been in turmoil for as many years as Prospect has owned it, and we’re still here. We have not had a mass exodus of staff because we are not leaving our patients,” said Peggy Malone, a nurse at Crozer. “We are committed to the people of Delaware County and the healing mission that we signed up for, but it’s taking a tremendous toll, and we cannot let this happen elsewhere.”
Joyann Kroser, the president of medical staff at Crozer said she and her colleagues were “powerless to make changes in how our health system is run.” She noted that Crozer is home to the only behavioral health crisis center in the area and is the only trauma center in Delaware County. Its labor and delivery unit and emergency department are also essential to the local community.
In emergencies, every second counts. Dr. Richard Hamilton, chair of emergency medicine at Crozer, said the additional time to get people to other hospitals would cost lives “Hope has a clock attached to it, and it starts to tick off every minute that goes by.”
