Delaware County – May 24, 2023 – The Delaware County Senate Delegation has recently reintroduced a package of bills to prevent financial looting of Pennsylvania hospital systems by private equity and for-profit companies.
Last year, the Delaware County Senate and House delegation introduced this legislation in response to decisions made by Prospect Medical Holdings (PMH) – the parent company of Crozer Health- to close numerous departments, cut healthcare staff, and discontinue services within several Delaware County hospitals. The reintroduction of their legislation comes on the heels of a refinancing deal that was announced on May 23 by Medical Properties Trust – the main investor and lender to PMH – regarding Prospect. Nearly a year after first introducing this legislation, Senators Amanda Cappelletti, John Kane, Tim Kearney, and Anthony T. Williams are even more convinced that the need for for-profit healthcare reform is paramount, as convoluted deals favoring investors are made, and the threat of a complete health system collapse for Crozer Health appears to be imminent.
“Delaware County’s latest experience with private equity ruining local healthcare systems has once again illustrated that our nation’s profit-driven approach to healthcare is the wrong one. These greedy entities who buy out healthcare systems and carve them up looking to turn a high and fast profit cause too much chaos and disruption to continue to go on like this,” said Senator Cappelletti. “This legislative package is tailored to fix the root cause of this problem by creating safeguards to protect our communities from being taken advantage of and ensuring that they can get the care they need and deserve, hopefully within their own counties.”
“Predatory, for-profit healthcare systems have caused significant harm to our communities by closing hospitals and laying off healthcare staff. This leaves folks without access to affordable and local healthcare,” said Senator Kane. “We have already seen the devastating effects of this toxic system from Crozer Health laying off over 215 hardworking nurses and staff this year and discontinuing medical services. These closures and layoffs are destroying our communities and taking advantage of those in need of medical attention.
The Senate bills we have introduced will fight back against these practices and protect public-facing hospitals from this ill-treatment. Corporate greed and executives who only focus on the bottom line are the reasons for these closures, and we won’t stand for it. As elected officials, it is our responsibility to set the standard for healthcare practices in Pennsylvania. We must prioritize patient care over corporate greed and profits to protect the public from exploitation. This bill package does exactly that, and I am proud to stand up for Pennsylvanians.”
The shuttering of Pennsylvania hospitals and profit-driven decisions aren’t just central to Delaware County, or even to for-profit hospitals. Industry consolidation and unfair anti-competitive practices have raised the cost of care and reduced health services in rural and urban Pennsylvania. In recent months, Brandywine and Jennersville Hospitals, both located in Chester County, were closed by non-profit Tower Health following a rapid series of hospital mergers that overextended the health system. Berwick Hospital Center in Columbia County also shuttered its doors in 2022 following its sale to a questionable new owner. And most notably, Hahnemann Hospital in Philadelphia closed in September 2019 with hundreds of millions of dollars in unresolved debt.
The Delaware County Senate delegation believes that these closures and the financial collapse of Crozer Health could have been averted with more state protections and stronger legislation intended to discourage owners of these systems from engaging in financial maneuvers that compromise patient care and the integrity of the health systems and its assets.
“Here we are, almost a year to the date of first introducing this legislation, and our local healthcare system is even more weakened because Prospect failed to be a responsible owner,” said Senator Kearney. “The state of our local healthcare system is a cautionary tale of what happens when predatory private equity firms value profits over patients. This underscores the need for legislators to work to protect Pennsylvania’s healthcare systems from bad actors in the future. Our goal is to grant the state greater authority in reviewing hospital mergers, real estate sale-leasebacks, major equity changes, and other transactions that can weaken health systems and lead to closures. We need to establish additional policies that discourage unethical companies from plundering our healthcare systems and eluding accountability once the resources vanish. This legislative delegation is committed to safeguarding our constituents and protecting the integrity of all Pennsylvania healthcare systems.”
Three Senate bills are included in the package. The bills will address:
- SB 546 – For-Profit Healthcare Reform: Prohibit For-Profit Hospitals
- SB 547 – For-Profit Healthcare Reform: Minimum Severance for Mass Layoffs
- SB 548 – For-Profit Health Systems Reform: Preventing Harmful Healthcare Deals
“We have reached a crisis moment in health care where the hospital industry must be redirected to its original intent of protecting all patients’ health as well as the well-being of its employees,” said Senator Williams. “Profit should never supersede the ethics of care.”
The Delaware County House Delegation supports this package and is expected to introduce companion legislation in the State House.
Senate Bills 546 and 548 have been referred to the Health and Human Services Committee earlier this month. Senate Bill 547 was referred to the Labor & Industry Committee on May 23.