Investors Extracted $400 Million From a Hospital Chain That Sometimes Couldn’t Pay for Medical Supplies or Gas for Ambulances
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In the decade since Leonard Green & Partners, a private equity firm based in Los Angeles, bought control of a hospital company named Prospect Medical Holdings for $205 million, the owners have done handsomely. Leonard Green extracted $400 million in dividends and fees for itself and investors in its fund — not from profits, but by loading up the company with debt. Prospect CEO Sam Lee, who owns about 20% of the chain, made $128 million while expanding the company from five hospitals in California to 17 across the country. A second executive with an ownership stake took home $94 million.
The deal hasn’t worked out quite as well for Prospect’s patients, many of whom have low incomes. (The company says it receives 80% of its revenues from Medicare and Medicaid reimbursements.) At the company’s flagship Los Angeles hospital, persistent elevator breakdowns sometimes require emergency room nurses to wheel patients on gurneys across a public street as a security guard attempts to halt traffic. Paramedics for Prospect’s hospital near Philadelphia told ProPublica that they’ve repeatedly gone to fuel up their ambulances only to come away empty at the pump: Their hospital-supplied gas cards were rejected because Prospect hadn’t paid its bill. A similar penury afflicts medical supplies. “Say we need 4×4 sponges, dressing for a patient, IV fluids,” said Leslie Heygood, a veteran registered nurse at one of Prospect’s Pennsylvania hospitals, “we might not have it on the shelf because it’s on ‘credit hold’ because they haven’t paid their creditors.”
The litany goes on. Various Prospect facilities in California have had bedbugs in patient rooms, rampant water leaks from the ceilings and what one hospital manager acknowledged to a state inspector “looks like feces” on the wall. A company consultant in one of its Rhode Island hospitals discovered dirty, corroded and cracked surgical instruments in the operating room.
These aren’t mere anecdotes or anomalies. All but one of Prospect’s hospitals rank below average in the federal government’s annual quality-of-care assessments, with just one or two stars out of five, placing them in the bottom 17% of all U.S. hospitals. The concerns are dire enough that on 14 occasions since 2010, Prospect facilities have been deemed by government inspectors to pose “immediate jeopardy” to their patients, a situation the U.S. Department of Health and Human Services defines as having caused, or is likely to cause, “serious injury, harm, impairment or death.”
Jesus: Hey, Dad? God: Yes, Son? Jesus: Western civilization followed me home. Can I keep it? God: Certainly not! And put it down this minute--you don't know where it's been! Tom Robbins in Another Roadside Attraction
May 6, 2022 at 10:54 AM #485654A Simple GameParticipant
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Maybe we should put Rick Scott on the job. Don’t laugh, at least he should know what to look for and where to look for it.
May 6, 2022 at 1:38 PM #485676djean111Participant
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That Mediare “Direct Contract” program that has been lurking for a while, okayed by Trump and then by Biden, gives insurance companies a lump sum per patient and then they get to keep the rest. No more billing. Started this year. So specialist and hospitalization referrals will go waaaay down, because the primary care physicians will be in total control.
This would be the only way that insurance companies will allow Medicare for All. IMO.
America is not a country, it's just a business. (Brad Pitt, Killing Them Softly)
"Sometimes when I try to understand a person's motives, I play a little game. I assume the worst. What's the worst reason they could possibly have for saying what they say and doing what they do? Then I ask myself, 'How well does that reason explain what they say and what they do?'" GRRM
A YouTube comment – we need new conspiracy theories – the old ones have all come true.
May 6, 2022 at 12:37 PM #485662
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