Prospect, the parent company of Crozer Health, has a long history of gutting hospitals


Four states where Prospect has its hospitals — including Pennsylvania — helped the deal come to fruition. But in Rhode Island, a group of state officials and a union of hospital workers resisted. There, a combination of regulatory powers and diligence appears to have enabled the state to dodge a bullet – the same bullet that put Crozer Health on life support.

Rhode Island’s ‘strict regulatory regime’ saves its hospitals

United Nurses & Allied Professionals (UNAP), the Rhode Island union representing some of the healthcare workers who would have been affected by the deal, has sparked a huge backlash against the deal.

Rhode Island officials, including Attorney General Peter Neronha, have subjected the deal to intense scrutiny over concerns that there are “significant financial vulnerabilities that could threaten the viability” of the two Prospect-owned hospitals in Rhode. Island, Roger Williams Medical Center and Our Lady of Fatima Hospital.

Neronha’s office released a PowerPoint presentation in June 2021 that “revealed the root causes of these financial vulnerabilities — the parties to the transaction putting shareholder profits ahead of financial security and their healthcare mission.”

Citing a review of thousands of pages of filings from parties involved in the deal, as well as a public hearing, Neronha was concerned. He found that the two Rhode Island hospitals were fiscally dependent on a company that was in an “increasingly insecure financial position” than it once was.

In fact, Prospect’s growth was directly tied to selling most of its hospital properties to a real estate investment trust and increasing its debt. The presentation ultimately predicted a “liquidity crisis” that could occur as early as the end of 2022.

“As PMH goes, go Roger Williams and Fatima,” the results read.

Neronha approved the deal in June 2021 with strict conditions to ensure hospitals are safe.

It cost the company quite a bit.

Prospect was ordered to create an $80 million escrow account to cover operating expenses and capital improvements for the next five years at the hospitals. Additionally, Prospect had to invest approximately $72 million in new equipment and renovations.

Additionally, hospitals cannot be sold or leased until 2026, hospitals must remain open until 2026, Prospect can no longer charge management fees, and there can be no reductions in essential health services.

The Rhode Island Attorney General had this authority under the state’s Hospital Conversions Act.

WHYY News reached out to Neronha for an interview, but her office declined to speak due to time constraints.

UNAP general counsel Chris Callaci told WHYY News that their differences with Prospect have turned into “wars”.

“They for the most part care less about the idea of ​​providing quality care and were, in our experience, profit-driven from day one when they showed up in Rhode Island in 2014,” said said Callaci.

As a lawyer for the union, Callaci was already aware of some of the issues going on behind the scenes of Prospect’s deal. In order to attract the attention of officials, the union broadcast radio spots and television advertisements. They even picketed. Callaci said Neronha “embraces” the union’s concerns.

He also credited Rhode Island’s “strict regulatory regime” when it comes to hospital ownership changes.

“And so, by doing that, we secured the financial well-being of our hospitals, which otherwise would have been left out there in a very precarious position, had Prospect got away with what they hoped to get away with. – and what they might do. great to do in Pennsylvania,” Callaci said.

“It breaks my heart to hear that they are as inhumane and continue to be the animals they are when it comes to showing extraordinary disregard for people in the communities where they have hospitals,” said added Callaci.

Pennsylvania currently doesn’t have a law on the books that gives the state the power to scrutinize and potentially block agreements with hospitals. While a group of Chester County lawmakers are currently working on a bill to do just that, Commonwealth hospital systems remain vulnerable.

Although hospitals in Rhode Island have received a safety net, Callaci said “it’s still a struggle.” The necessary equipment is out of stock, according to the lawyer. Healthcare workers are struggling to get the supplies they need.

Callaci believes there is power in numbers and in knowledge. He told WHYY News that the communities impacted by Prospect’s business deals “all have a responsibility to do something about it.”

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