WASHINGTON—U.S. Senator Chris Murphy (D-Conn.), a member of the Health, Education, Labor, and Pensions (HELP) Committee, today released, A Dangerous Prospect: How Private Equity Decimated Connecticut Hospitals. The new report details the immense harm to patients and staff caused by private equity’s takeover of three Connecticut hospitals and calls on lawmakers to reject the fast-growing influence of private equity firms on our healthcare system. In 2016, Prospect Medical Holdings, a California-based hospital system owned and managed by the private equity firm Leonard Green & Partners, acquired three Connecticut hospitals that were struggling financially: Waterbury Hospital, Rockville General Hospital, and Manchester Memorial Hospital. Relying on firsthand testimony from hardworking staff and patients, the report exposes how despite early promises to revitalize these strained hospitals, Prospect Medical employed a “buy, strip, flip” strategy in which they sold off assets while gutting staff and services, prioritized investor payouts and short-term profits over patient outcomes, and degraded the safety and quality of care for vulnerable communities without the financial means to fight back.

Laying out private equity’s corporate greed and indifference to providing patients with quality care, Murphy wrote: “When Prospect came into these hospitals, they cut corners, squeezed staff, eroded patient care and drove these hospitals into bankruptcy, leaving economic uncertainty for these communities in its wake. Prospect didn’t invent the private equity playbook, but they followed it to the letter – buy the hospitals, strip them of their assets, flip them for a quick profit, and leave the mess for someone else to clean up.”

Murphy detailed the devastating impact private equity has on patient outcomes: “Research has found patients at PE-owned hospitals were more likely to get an infection, experience a fall, and have an adverse event following a procedure. If this is news to anyone, it is certainly not news to hospital staff. In an academic study that surveyed doctors about their views on PE ownership of hospitals, most viewed it negatively and PE-owned hospitals cite a higher turnover of clinical staff who experience in real time the effects of staffing shortages, limited time with patients, and constrained supplies.

Murphy exposed how the transfer of wealth from poor hospitals to rich private equity CEOs will only be exacerbated by President Trump’s One Big Beautiful Bill: “The bill includes major cuts to Medicaid in the form of work requirements, changes to the ways states can collect money to pay for their share, and limits on who has access to Medicaid funds. This means hospitals will inevitability become more distressed, especially hospitals already struggling in disadvantaged and rural communities. And when hospitals are hanging by a thread, where do they turn? They have no choice but to turn to the private sector for an influx of capital. Private equity is likely to be the first to step in as they target distressed companies with little recourse.”

To inform the report, Murphy asked patients and staff at Prospect-owned hospitals to share their experiences with the deteriorating conditions at these facilities as part of the “Share Your Story” campaign. Dozens of respondents shared their stories.

Dayna, who has worked in the Waterbury Hospital emergency room for 25 years, shared the empty promises Prospect made: “We were told they're getting a whole new ER. There were even blueprints, so somebody paid an architect. There were blueprints in our break room for a year. It never happened. I knew it wasn't going to. It was always like, ‘oh, just wait, just wait.’”

Ramona, an Operating Room Assistant at Waterbury Hospital, said that before Prospect took over, staff never ran out of needed supplies. After Prospect acquired the hospital, supplies were so scarce patients were sometimes left on the operating table while staff scrambled. One patient was on the operating table for 45 minutes while staff were waiting for the mesh needed to close the patient up after supply ordering protocols had become very restricted.

Key findings from the report include: 

  1. Prospect stopped paying vendors for essential supplies, resulting in patients being treated with loose IV cords, rusted stretchers with broken brakes, and faulty equipment for transport. Hospital staff also went without the pens, pencils, paper, and notepads to complete their work – including legally required paperwork.
  2. Prospect neglected to complete necessary maintenance on hospital facilities, failing to fix broken elevators or repair falling ceilings in areas where patients were housed.
  3. At Manchester Hospital, a woman died giving birth to a stillborn because an emergency C-section was done too late. Additionally, Prospect cut staff, no longer ensuring that a doctor would be available on overnight shifts, putting patients with serious complications, such as a heart arrhythmia or collapsed lungs at greater risk.
  4. In 2019, Waterbury Hospital recorded the highest rates of patient readmission rates in the state, a measure of medical complications.
  5. Patients stayed in the hospital additional nights, incurring higher costs, while they negotiated directly with medical supply companies for materials like back braces to leave the hospital safely, since Prospect wasn’t paying their bills to acquire sufficient supplies.
  6. Prospect Medical took advantage of the generosity of their staff: nurses and techs reported buying patients food with their own money after Prospect had stopped paying vendors, just so patients wouldn’t go hungry.
  7. While hospital staff was volunteering their time and money to backfill supply shortages, Prospect's private equity owners were cashing out hundreds of millions of dollars on their investment.
  8. Prioritizing short term profits over the long-term financial health of the hospitals, Leonard Green & Partners borrowed $457 million to pay themselves a dividend while Prospect recorded a $244 million net loss.
  9. Prospect also sold the land the hospitals sit on for $1.4 billion to a real estate investment trust who leased it back to the hospitals at a high rate.
  10. Prospect left their hospitals in such dire straits that Rockville Medical had to cut all but emergency and outpatient mental health services without the required state authorization - leaving many patients with no full-service hospital nearby.

Despite the catastrophic outcomes for patients and communities, hundreds of private hospitals nationwide are owned by private equity firms looking to replicate the “buy, strip, flip” business model which damaged Connecticut hospitals. The report echoes research confirming that both patients and payors regularly pay more to receive worse care at private equity-owned hospitals. Moreover, private equity’s ownership of other healthcare facilities, such as specialty clinics and nursing homes, is growing, despite strong evidence that patients at private equity-owned nursing homes are more likely to die.

The full A Dangerous Prospect: How Private Equity Decimated Connecticut Hospitals report can be found HERE.