PESP featured in More Perfect Union video about Crozer hospital closures in Pennsylvania

In a recent video from More Perfect Union titled “What Happens When Private Equity Comes to Your Town’s Hospital”, PESP’s Healthcare Director Mary Bugbee explains how a private equity firm’s extractive tactics contributed to Crozer Health’s closure in April 2025: “[Private equity firms] don’t have any skin in the game. They can take financial risks, but do not have to pay the price for them.” 

Crozer Health was a nonprofit safety net hospital system that was bought out by Leonard Green & Partners in 2016 and converted to for-profit. Crozer’s closure in 2025 came on the heels of a multiyear battle waged by elected officials, workers, and communities to keep the hospitals open after Leonard Green & Partners siphoned hundreds of millions in debt-funded dividends out of the system and sold off the real estate to hospital landlord, Medical Properties Trust, leaving the hospitals in poor financial condition.

In the video, Mary explained how the debt-funded dividends the company paid out to investors in 2018 were “fundamentally extractive. Even among private equity industry folks, it’s a controversial way to generate a return on an investment because it adds absolutely no value to the company in question. And the private equity firm is not on the hook for any of that debt, but they can reap the rewards.” 

“Instead of putting money into these systems, [private equity is] actually taking money out of the systems,” Mary explained. “It’s not profitable to provide healthcare at a hospital with a disproportionate number of people on Medicaid. And if we don’t want that to be the case anymore, we’re going to need to find a way to finance healthcare that doesn’t allow investors to swoop in and extract from these systems before they finally go under.”

Peggy Malone, a former nurse at Crozer who was also featured in the video, shared, “Nothing will haunt me like those days prior to closing that inpatient psychiatric unit, where I felt like I was herding patients out like cattle, where I felt that nobody cared about them.”In May, Mary presented to the Delaware County Council about the devastating impact of private equity practices on the Crozer Health system. Her presentation, “Raiding the Safety Net: How Private Equity Extraction Led to the Closure of Crozer Health,” detailed how Leonard Green & Partners and its minority owners extracted over $650 million from Crozer Health’s parent company, Prospect Medical Holdings.