FORMERLY PE OWNED
Prospect Medical Holdings
Includes Prospect Medical, CharterCARE, Crozer Health
hospitals · Los Angeles, CA
- PE Firm
- Leonard Green & Partners →
- Year Acquired
- 2010
Leonard Green sucked $424 million out of a safety-net hospital chain and left it with $3 billion in debt. Less than four years after the firm walked away, the whole thing collapsed into bankruptcy.
What Happened
- Prospect paid its investors $645 million in dividends and other payouts during Leonard Green's 2010-2021 ownership, $424 million of it going to Leonard Green. The 2018 payout alone was $457 million, with the CEO taking home about $90 million
- In 2019, Prospect sold its hospital real estate to Medical Properties Trust for $1.55 billion and rented the buildings back, saddling the hospitals with crushing rent bills while investors cashed out
- Filed for Chapter 11 bankruptcy in January 2025, listing between $1 billion and $10 billion in liabilities and more than 100,000 creditors across hospitals in California, Connecticut, Pennsylvania, and Rhode Island
- A bipartisan Senate Budget Committee investigation found 'overwhelming evidence of financial mismanagement' under Leonard Green's ownership — Sen. Richard Blumenthal said Prospect 'used its hospitals as its personal piggy banks'
The Damage Done
- Crozer-Chester Medical Center and Taylor Hospital in Pennsylvania shut down in spring 2025. Six other Prospect hospitals nationwide closed around Leonard Green's exit, per the Senate investigation
- A ProPublica investigation found 'broken elevators, dirty surgical gear, bedbugs and more' at Prospect hospitals that mostly serve low-income patients
- More than 2,650 healthcare workers were laid off when Crozer Health shut down, wiping out safety-net care for the communities that depended on it
- Pennsylvania's attorney general sued Prospect in October 2024, accusing it of 'corporate looting' as services at its Delaware County hospitals were slashed
Sources
- Prospect Medical Holdings files for bankruptcy after owners took hundreds of millions in payouts — CBS News(2025-01-11)
- Bipartisan Senate report slams private equity's 'detrimental effects' on hospitals — CBS News(2025-01-07)
- Rich Investors Stripped Millions From a Hospital Chain and Want to Leave It Behind — ProPublica(2021-02-04)
- Investors Extracted $400 Million From a Hospital Chain That Sometimes Couldn't Pay for Medical Supplies or Gas for Ambulances — ProPublica(2020-09-30)
- Prospect Medical Holdings files for bankruptcy — Healthcare Dive(2025-01-13)
- 'Personal piggy banks': US Senate investigation rails against private equity draining CT hospitals — Connecticut Public(2025-01-09)
- Shutdowns begin as Crozer Health stops taking emergency patients — NBC10 Philadelphia(2025-04-23)
- Prospect Medical Holdings files for bankruptcy — WHYY(2025-01-12)
- Pa. AG sues Prospect Medical Holdings for 'corporate looting' — WHYY(2024-10-30)