A federal bill proposed March 23 by Sen. Chris Murphy, D-Conn., and Rep. Mary Gay Scanlon, D-Pa., would deny Medicare funding to hospitals and nursing homes currently owned and operated by private equity firms.
The Taking Back Our Hospitals Act would affect more than 400 U.S. nursing homes and hospitals owned by private equity firms.
Mr. Murphy argues that private equity firms routinely cut services, staffing and supplies after taking over a healthcare facility, according to the news release. Moreover, private equity nursing home patients face a 11% higher mortality rate, he said.
“What happened to Crozer Health is a cautionary tale for communities all over the country,” Ms. Scanlon said in the release. “Prospect Medical Holdings, a private equity firm, acquired the Crozer Health system, promising increased investment and better care. Instead, it drove Crozer into bankruptcy, closing four hospitals, laying off 2,600 health care professionals, and leaving Delaware County with just two hospitals to serve its 585,000 residents. This is what happens when private equity treats our hospitals as cash cows.”
The bill, in part, comes in response to widespread closures of hospitals, nursing homes and healthcare facilities across the nation. Since the One Big Beautiful Bill Act was passed, more than 750 facilities have closed, which provides more opportunities for private equity firms to take over facilities.
Mr. Murphy and Ms. Scanlon also introduced The Patient Safety and Whistleblower Protections Act, which would provide additional legal protections for healthcare whistleblowers who speak out publicly on patient safety concerns.
Becker’s reached out to Prospect Medical Holdings for comment and will update this story if more information becomes available.
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