Submitted by the Delaware County House & Senate Delegation: Senators Amanda Cappelletti, John Kane, Tim Kearney, and Anthony H. Williams, and Representatives Leanne Krueger, Jennifer O’Mara, Gina H. Curry, Lisa Borowski, Heather Boyd, Carol Kazeem, David Delloso, Regina Young, and Speaker Joanna McClinton.

 DELAWARE COUNTY, PA – Octubre 30, 2024 – Attorney General Michelle Henry yesterday announced the filing of a lawsuit against the parent company of the Crozer Health System, Prospect Medical Holdings, Inc., as well as its executives and former majority owner, the private equity firm Leonard Green & Partners.  The lawsuit comes in response to years of the company’s disastrous mismanagement and neglect of Crozer, which has resulted in closures of facilities and brought our local healthcare system near the brink of collapse.

Below is the Delaware County House and Senate Delegation’s statement in support of the AG’s decision to file a civil complaint against Prospect Medical Holdings:

The Delaware County House and Senate Delegation stands united in full support of Attorney General Michelle Henry’s civil lawsuit against Prospect Medical Holdings. This aggressive action is crucial to hold accountable a company that has repeatedly placed profits over the health and well-being of Delaware County residents. By closing hospitals and diverting essential funds to shareholders, Prospect has shown blatant disregard for its commitments. Delaware County deserves accessible, reliable healthcare, and this lawsuit is a necessary step to restore it.

Prospect’s broken promises have decimated Delaware County’s healthcare infrastructure: two hospitals have closed, and essential services like trauma and maternal care are under immediate threat. In 2019, Leonard Green and Partners saddled Prospect with debt for shareholder gain, leaving Crozer financially unstable and unprepared to serve our community.

“I am beyond disappointed and frustrated that we are at this very juncture with Prospect,” said Rep. Carol Kazeem (Delaware-159). “Crozer-Chester has long been the center of health across Delaware County, especially for residents in the 159th district. It’s my hope that Prospect will fulfill their commitments to our community as promised in 2016, because the alternative is devastating for patients, employees, and neighboring systems alike.”

Rep. Jennifer O’Mara (Delaware-165) added, “Prospect Medical Holdings has harmed Delaware County enough, and I am relieved that action was finally taken to hold them accountable. These hospital closures have disproportionately impacted our communities and our residents who desperately need quality healthcare.”

The delegation expressed regret that the mismanagement of Crozer necessitated this remarkable legal action. Rep. Gina H. Curry (Delaware-164) stated, “In my sincere disappointment over what has ultimately become a legal battle around the neglect and abandonment of our healthcare system in Delaware County, our communities are left with healthcare deserts that have critically impacted the lives of so many. Generations of disinvestment and the lack of access to equitable healthcare has created challenges for healthy living and a compromised workforce. I will continue to fight and demand for what Delco needs.”

The Delegation is grateful for the Attorney General’s office, which has become the final safeguard for Delaware County’s healthcare. “The Office of the Attorney General has my full support taking this step to protect our community’s health,” said Senator John Kane (Delaware/Chester). “This receivership is a crucial step towards stabilizing our healthcare system and returning Crozer to its former prominence.”

Working alongside the AG, the Delegation remains determined to prevent further harm and to ensure control of our healthcare system returns to entities that prioritize patient care.

Rep. Lisa Borowski (Delaware-168) emphasized, “For far too long Prospect has put profits over patients, exemplifying how private equity owners are causing hospitals to collapse and leaving communities behind. This action further illustrates the need for HB2344 to strengthen the oversight of hospital acquisitions and consolidations by the AG’s office.”

We cannot allow private equity greed to dismantle our local healthcare. The closure of hospitals and suspension of services have forced patients to travel farther for care, displaced essential staff, and impacted retirees and vendors who rely on timely payments. Senator Amanda Cappelletti (Montgomery/Delaware) stated, “The egregious mismanagement and corporate looting that private equity has gotten away with in the Crozer Health System has caused widespread damage to our region’s access to healthcare.”

Hundreds of jobs have been eliminated under Prospect’s management of Crozer, reducing one of the county’s historical anchor institutions. “The actions of Prospect border on criminal, “said Rep. Dave Delloso (Delaware-162), “I only regret that for now it appears no one will spend a minute in jail for what has been projected on to the good people of Delaware County and the loyal and dedicated employees of Crozer Health.”

“Prospect has had eight long years to do the right thing, make the necessary infrastructure investments, pay their bills, and treat their employees with respect, said Rep. Leanne Krueger (Delaware-161).  “I have learned that private equity should not able allowed to run hospitals.”

Collectively, the Delegation recognizes that the Attorney General’s action sends a clear message: private equity’s bottom line will not dictate the future of healthcare in our community. We will continue to fight together to rebuild a dependable healthcare system for Delaware County.

Rep. Heather Boyd (Delaware-163) added, “The AG’s lawsuit is an extraordinary step to stabilize Crozer and hold Prospect Medical and its former owners to account for the corporate raiding of one of the largest employers in Delco, which resulted in the closure of both Springfield and Delaware County Memorial Hospital in the 163rd district.”

Click here to read the injunction.

Click here to read the receivership motion.

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