YOUNGSTOWN, Ohio – Another for-profit private equity medical company involved with Medical Properties Trust is reportedly considering restructuring, according to the Wall Street Journal.
The publication reported Wednesday that Prospect Medical Holdings, which did a sale-leaseback deal with MPT in 2019 involving 14 of its hospitals and two behavioral health facilities, has been struggling to make its lease payments to MPT.
MPT also is the lease holder for Steward Health Care System, which filed for bankruptcy May 6, 2024, and owned hospital properties in Trumbull and Mercer counties.
Prospect Medical Holdings, which doesn’t own a hospital in the region, operates facilities around Philadelphia, Pa., as well as in California, Rhode Island and Connecticut.
Pennsylvania Attorney General Michelle Henry filed a civil lawsuit in October for alleged breach of contract by Prospect Medical Holdings after it closed facilities in Delaware County, Pa.
Prospect Medical Holdings is one of the companies that became the focus of an investigation by the U.S. Senate focusing on concerns regarding mismanagement of the health care system by for-profit private equity companies.
The Senate Budget Committee released the report this week. It outlines how private equity companies spent more than $1 trillion during the 2010s on health care acquisitions, and how that has changed the landscape of the health care system, leading to the closure of hospitals, safety violations created by seeking profit over patient safety, longer waits in emergency rooms and a lack of investment in the upkeep of hospital facilities.
“Private equity has infected our health care system, putting patients, communities, and providers at risk,” U.S. Sen. Sheldon Whitehouse, D-R.I., said in a Senate news release that accompanied the release of the report.
“As our investigation revealed, these financial entities are putting their own profits over patients, leading to health and safety violations, chronic understaffing, and hospital closures. … Private equity investors have pocketed millions while driving hospitals into the ground and then selling them off, leaving towns and communities to pick up the pieces,” Whitehouse said.
The senate investigation into Steward Health Care, which led to a vote of contempt of Congress against Ralph de la Torre, Steward’s former CEO, in September, was being conducted by a different Senate committee.
Massachusetts Gov. Maura Healey this week signed a bill designed to close loopholes and strengthen the review process for medical facilities and operators in that state. Steward closed three Massachusetts hospitals in 2024 as part of its bankruptcy, which also led to the closure of Sharon Regional Medical Center in Sharon, Pa., this week and the sale of the former Trumbull Regional Medical Center in Warren, Ohio, and Hillside Rehabilitation Hospital in Howland, Ohio, to Insight Health Systems.