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Nurse Testifies to US Senate about Private Equity’s Impact on Safety Net Hospital Company Prospect Medical Holdings

November 10, 2021

Peggy Malone, RN, has been a nurse for 32 years, all of them at the Crozer-Chester Medical Center in Upland PA. She testified at the October 20, 2021, U.S. Senate Committee on Banking, Housing and Urban Affairs hearing “Protecting Companies and Communities from Private Equity Abuse,” which was chaired by Senator Elizabeth Warren in support of the reintroduction of the Stop Wall Street Looting Act.

Malone submitted written testimony to the Subcommittee explaining how “patients are suffering due to the greed of a major private equity firm that has enriched itself and its owners at the expense of our patients.” She testified because “Senator Warren’s Stop Wall Street Looting Act would have helped to prevent the worst abuses by Leonard Green, Sam Lee and David Topper.”

In particular, her written testimony detailed how:

“Prospect Medical Holdings, which owns 17 hospitals across the country including mine, was majority-owned until June 2021 by the major private equity firm Leonard Green & Partners. Leonard Green and Prospect’s founders and current owners, Sam Lee and David Topper, extracted over $400 million from Prospect since taking ownership just a few short years ago.” 

She concluded, “Simply put, we were looted.”

In her written testimony to the Subcommittee, Malone wrote how:

“Things have gotten progressively worse since our community hospital system was converted to for-profit status under Prospect’s ownership in 2016. The quality of care has gone downhill, and our hospital is only kept from collapsing by the sheer will of the nurses and healthcare workers that keep the ball rolling.

We are now at a crisis point. Due to Prospect’s misguided efforts to save money, we are now severely understaffed and without the supplies we need to do our job. There are many shifts when our nurses are overwhelmed with the number of patients they have to care for — significantly higher than the safe maximum number of patients per nurse.

This decline comes as Prospect has received $173.8 million in COVID grants from the federal government. Where has that money gone? We don’t know. It certainly hasn’t prevented conditions from getting worse at the bedside.”

To the Subcommittee Malone said, “PE has no business in healthcare. They have destroyed our hospital. They have destroyed the fiber of what we are as healthcare professionals.”

Continuing in her live address to the members of the Subcommittee, Malone observed, “I understand that some of you are very pro private equity. Families were not allowed in the hospital. You did not see what was going on in there during this pandemic.”

She described appalling conditions and what she and her coworkers were willing to fight for:

“We were not able to give good quality care to patients. Patients were dying. They had no family. They had no one in the rooms but us.

It was the nurses, it was the respiratory therapists, we were the ones that had to go in.

We were scrambling for ipads so that families could say goodbye to their loved ones. Without having anyone in the room, we were their families. We were using poor quality equipment.

I would have to try and straddle a urinal to collect urine from a patient bag between my feet with a gown and a mask….we were wearing trash bags at a certain point because we didn’t even have enough PPE, and this is how were taking care of patients day in and day out.

I left my family. I stayed at a house that the local college gave us because I was afraid to take it home to my family. I had my children at home who were having graduations and everything taken away from them, as [with] all of my colleagues, and we went in and we did this job every day to the best of our ability with no equipment, with no PPE.

We were afraid for our lives, and we did this job. And we did it every day for every single person in this country.

We thought we were doing good….

And [now] we are speaking up and we want to know where that money is, and we want to know how these private equity firms can not take care of the patients that are in these hospitals. 

We don’t have enough staff.

We don’t have enough equipment.

We are fighting every day to give good quality care to patients and we are not able to do it.

And nobody was in there watching….

And so I can give you the statistics and I can talk about Leonard Green… and all the things that are going on and all the tax credits and things that these companies are given. . . . That is our goal. 

Private equity does not belong in healthcare. Our job is to do no harm…. It’s to care for our patients. That’s why we got into this and we will fight and every nurse I know will fight. 

What we saw was a warzone, for the last 20 months, and it’s not over.

And we have not gotten support.

We have not gotten support from our administration.

We have not gotten the supplies that we need.

We do not have the staff that we need.

Private equity has no business in healthcare.”

See PESP’s February 2020 report, “Raiding the Safety Net: Leonard Green & Partners Seeks to Walk Away from Prospect Medical Holdings after Collecting $570 Million in Fees and Dividends

The conditions at Prospect Medical Holdings’ hospitals were also described in a September 2020 ProPublica story. “Investors Extracted $400 Million From a Hospital Chain That Sometimes Couldn’t Pay for Medical Supplies or Gas for Ambulances.”

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