Vultures: The Private Equity Firms That Gobble Up Hospitals and Spit Them Out

[Celerity]

Looking to turn a quick profit, the firms buy medical facilities and then unload them just a few years later, often leaving devastation in their wake.

https://newrepublic.com/article/203582/private-equity-firms-hospital-closures

https://archive.ph/ks4Kf



Alfredo Sanchez learned plenty in nursing school, but nothing prepared him for his first job in the trauma intensive care unit at Crozer-Chester Medical Center in Delaware County, Pennsylvania. The EKG machine, for instance, was fickle; it had a frayed cord that had to be held just so. Then the machine finally died, and Sanchez had to get other over-stretched nurses to cover his critically ill patients while he raced around the hospital, looking for an EKG that worked. When he ran out of canisters for bodily fluids, he had to scavenge for them elsewhere in the hospital. At one point, his unit ran out of the suction tubes used to keep intubated patients’ airways clear. The water machine was laden with bacteria, and all the nurses knew not to use it. The staff continually raised these problems to management, to no avail.

Sanchez, 42, who worked at Crozer-Chester in 2024 after serving in the Army for 20 years, was a paramedic before he became a nurse. In the ICU he took care of people with gunshot wounds, people who had been in life-threatening car accidents, people who had just had major surgery. But as staffing and supply budgets were cut to the bone, he feared for his patients’ survival. On one shift, a patient who had been shot in the head had to share their nurse with two other critical patients. Another day, a patient needed a common medication to prevent an impending stroke. But when Sanchez went to the dispensing system, that medication was missing. He hustled to another floor—they were out, too.

“You start to panic,” Sanchez said. He finally found the medication on a third floor. When he asked the hospital’s pharmacy what was behind the shortages, he discovered that the department had been cut so much that one person was doing the job previously done by three people. “The majority of our patients were not wealthy. Many of them were minorities,” Sanchez said. “The injustice of it. It feels like a war zone. The public doesn’t know what’s behind the curtain. It’s a hospital. You wouldn’t know that the EKG machine is broken, that they’re missing supplies or that they are going to really struggle to have the right staffing for you.” Of all the things he learned on the fly, Sanchez said, the most important was this: “When I took the job, I had no idea what private equity was.”

From 2010 until 2021, Crozer-Chester Medical Center was owned by Prospect Medical Holdings, a company which was in turn majority-owned by Leonard Green & Partners, a private equity firm. Experts say that the ownership group extracted hundreds of millions of dollars from Prospect Medical, which owned not only Crozer-Chester but multiple safety-net hospitals in five states. Leonard Green and Prospect Medical did this by loading the hospitals up with debt. When Leonard Green exited Prospect Medical in 2021, the Rhode Island attorney general investigated and found that the ownership group “realized hundreds of millions of dollars and would leave behind a system that is highly leveraged, that is, where liabilities greatly exceed assets.” Prospect Medical continued to own Crozer-Chester until the company closed that hospital and others amid the company’s bankruptcy in 2025, leaving residents with nowhere to go for care.

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[bronxiteforever]

1. Kick and recommend. Outstanding article. N.t.

[underpants]

2. For profit healthcare

Who’da thunk it?

[Disaffected]

3. Bastards.

So, the process seems to be gain control of a company via stock purchases (especially when its stock price is low), take out big loans using the hospital assets as collateral, use the proceeds to pay fat executive salaries, bonuses and "management" fees, pay big share dividends, buy back shares (to increase executive "stock performance" bonuses), cut employee wages, sell other assets, loot pension funds (use as more collateral for more loans). etc.

Declare bankruptcy and walk away when the place is sucked dry.

IIRC didn't Mitt Romney's outfit operate that way?

[NotHardly]

6. Evil lives in profit driven hearts.

[snot]

4. Imho, leveraged buy-outs should be illegal,

and those who effectuate them should face personal financial and criminal liability for any harms resulting from consequent quality degredations in the goods or services sold.

[mopinko]

5. even tho chicago is a big city, we have hospitals that r gonna crash if we lose medicaid.

1 of the long time safety net hospitals, where the uninsured know to go, was bought up by 1 of these firms. it’s been threatened w closure over poor patient care.
y these clowns wd buy a hospital like that mystifies me. they had long run at a loss.
honestly, i dont get how it works.