A last-minute deal was reached in Pennsylvania to keep two hospitals owned by Prospect Medical Holdings open, but the fate of the organization’s hospitals in Connecticut is still uncertain following the collapse of a deal with Yale New Haven Health in February.
Lawmakers in Pennsylvania at a public hearing this month discussed keeping the two Prospect hospitals running in that state. The hearing came after Prospect filed for bankruptcy in January.
A deal was reached Sunday that will allow the Pennsylvania hospitals to remain open while a restructuring of the health system is worked out.
The deal “is not a permanent fix,” said Mary Bugbee, health care director at Private Equity Stakeholder Project, a nonprofit tracking private equity investments in health care.
“But it brings a lot of relief to the health care workers and the patients and the community served by Crozier Health in Delaware County," she said. "Because those hospital closures would be absolutely devastating."
In Connecticut, Prospect-owned Waterbury Hospital, Manchester Memorial Hospital and Rockville General Hospital remain at risk of closure should a buyer fail to step in at bankruptcy court.
Bugbee remained cautious about any new buyer, saying it still could be driven to chase profits for its investors at the expense of local care.
“For example, Glenwood Regional Medical Center in Louisiana, that new operating company had ties to Medical Properties Trust,” she said. “There's a risk that a new operating company that's interested in these hospitals might not be a big improvement from Prospect itself,” she said.
In Connecticut, the real estate investment firm Medical Properties Trust owns land that once belonged to the three Prospect-owned hospitals. The hospitals now pay rent in a sale leaseback arrangement by Prospect.
Workers at the hospitals are also raising concerns about any future buyer.
“Any sale must include the adoption of our collective bargaining agreements, as well as those of SEIU 1199 and AFT, to protect workers and maintain stability in patient care,” said Edmund Gadomski, executive secretary of the Waterbury Hospital union. “Our priority is securing a responsible operator committed to both the workforce and long-term investment in these hospitals.”
Across the U.S., at least six hospitals owned or previously owned by private equity announced plans to close, or have closed since January, according to the Private Equity Stakeholder Project. The hospitals were funded by private-equity investors including Cerberus Capital, Patient Square Capital and Apollo Global Management in Pennsylvania, Florida and Colorado.
