Submitted by the Delaware County House of Representatives and 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 – October 30, 2024 – Attorney General Michelle Henry yesterday announced the filing of a lawsuit against Crozer Health System’s parent company, Prospect Medical Holdings, Inc., as well as its executives and former majority owner, private equity firm Leonard Green & Partners. The lawsuit responds to years of disastrous corporate mismanagement and negligence by Crozer, which led to facility closures and brought our local health care system to the brink of collapse.
Below is the statement from the Delaware County House and Senate Delegation in support of the AG’s decision to file a civil complaint against Prospect Medical Holdings:
The Delaware County House of Representatives and Senate delegation unite in full support of Attorney General Michelle Henry’s civil lawsuit against Prospect Medical Holdings. This aggressive action is critical to holding accountable a company that has repeatedly put profits ahead of the health and well-being of the people of Delaware County. By closing hospitals and diverting necessary funds to shareholders, Prospect has shown a flagrant disregard for its obligations. Delaware County deserves accessible and reliable health care, and this lawsuit is a necessary step to restore it.
Prospect’s broken promises have decimated the healthcare infrastructure in Delaware County: two hospitals have been closed and imperative services such as trauma care and maternity care are at immediate risk. In 2019, Leonard Green and Partners saddled Prospect with debt to benefit shareholders, leaving Crozer financially unstable and unprepared to serve our community.
“I am extremely disappointed and frustrated that we are at this point with Prospect,” he said Libertine. Carol Kazeem (Delaware-159). “Crozer-Chester has long been a health center for all of Delaware County, especially for residents of the 159th District. I am hopeful that Prospect will live up to its commitment 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 hurt the County of Delaware enough, and I am relieved that action is finally being taken to hold this company accountable. Hospital closures have had a disproportionate impact on our communities and residents who desperately need high-quality health care.”
The delegation expressed regret that Crozer’s mismanagement necessitated such unusual legal action. Rep. Gina H. Curry (Delaware-164) stated, “I am sincerely disappointed in what ultimately turned into a legal battle surrounding the negligence and abandonment of our health care system in Delaware County, which has left health care deserts in our communities that have critically impacted the lives of so many. Generational disinvestment and lack of access to decent health care have created challenges for healthy lifestyles and a vulnerable workforce. I will continue to fight and demand what Delco needs.”
The delegation expresses gratitude for the office of Attorney General, which has become the ultimate safeguard for health care in Delaware County. “The Office of the Attorney General has my full support in taking this step to protect the health of our community,” he said Senator John Kane (Delaware/Chester). “This bankruptcy filing is a critical step toward stabilizing our health care system and restoring Crozer to its former glory.”
Working with the AG, the delegation remains committed to preventing further harm and ensuring that reimbursements in our health care system are controlled by providers who place patient care as a priority.
Rep. Lisa Borowski (Delaware-168) emphasized: “For too long, Prospect has put profits over patients, which is an example of how private equity owners are causing hospitals to fail and communities to be left behind. This action further illustrates the need for HB2344 to strengthen the AG’s office’s oversight of hospital acquisitions and consolidations.”
We cannot allow private equity greed to eliminate our local health care. Hospital closures and service suspensions have forced patients to travel further for care, necessitated the relocation of imperative staff, and impacted retirees and vendors who rely on timely payments. Senator Amanda Cappelletti (Montgomery/Delaware) stated: “The radical mismanagement and corporate depredation committed by private equity in the Crozer Health System has caused widespread harm to access to health care in our region.”
Under Crozer’s leadership, Prospect eliminated hundreds of jobs, downsizing one of the county’s historic key institutions. “Prospect’s actions border on crime,” he said Rep. Dave Delloso (Delaware-162)“I only regret that for now it appears that no one will spend a minute in jail for what has been predicted for 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 investments in infrastructure, pay its bills and treat its employees with respect,” he said Rep. Leanne Krueger (Delaware-161). “I learned that private equity should not be allowed to run hospitals.”
In summary, the Delegation recognizes that the Attorney General’s action sends a clear message: private equity’s financial performance will not determine the future of health care in our community. We will continue to fight together to rebuild a reliable health care system in Delaware County.
Rep. Heather Boyd (Delaware-163) added: “The AG’s lawsuit is a remarkable step toward stabilizing Crozer and holding Prospect Medical and its former owners accountable for the corporate raid on one of Delco’s largest employers that led to the closure of Springfield and Delaware County Memorial Hospital on the 163rd. district”.
Click here to read the bankruptcy filing.
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