FOR IMMEDIATE RELEASE
Contact: Joe O’Leary | Joe.OLeary@cga.ct.gov | 508-479-4969

SENATOR ANWAR INTRODUCES BILLS TARGETING PRIVATE EQUITY HOSPITAL, HEALTHCARE OWNERSHIP

Following years of controversy in Connecticut regarding the acquisition of several hospitals by a private equity firm that has contributed to concerns about the hospitals’ operation, State Senator Saud Anwar (D-South Windsor) has introduced several proposed bills this year seeking to limit future private equity firm acquisitions of hospitals, enhance regulation in such ownership of health care facilities and study the impacts of private equity involvement in provision of some services.

The January 11 announcement that Prospect Medical Holdings, the owner of hospitals in Waterbury, Manchester and Vernon, filed for bankruptcy was the latest in a series of issues that have impacted care at those hospitals for years. While Prospect said it will provide uninterrupted patient care at its facilities as it undergoes the bankruptcy process, the announcement came after Prospect has suffered financial issues, as well as a cyberattack in the summer of 2023, that have harmed its hospitals’ finances and potentially jeopardized the planned sale of the three hospitals to Yale New Haven Health.

“For years, my colleagues and I have warned about Prospect’s precarious financial and organizational issues that have impacted patient care at Waterbury Hospital, Manchester Memorial Hospital and Rockville General Hospital,” said Sen. Anwar. “Many of our concerns were legitimate and the patients and medical workers who rely on those institutions are our foremost priority. We can’t let this happen again. Private equity, which all too often squeezes assets out of institutions and puts profits over people, has no place in a field dedicated to recovery and healing. I’m dedicated to protecting public health in Connecticut.”

Senate Bill 469 would take direct action to prevent private equity ownership in healthcare by restricting their ability to purchase private equity firms, further prohibiting hospitals from participating in real estate investment trust transactions – which firms can utilize for financial gain while jeopardizing hospital finances – and establish physician-led ownership requirements for medical groups and ambulatory surgical centers. It was co-introduced by State Senator Jeff Gordon (R-Woodstock).

Senate Bill 567 would expand the authority of the state Attorney General and Commissioner of Health Strategy to regulate health care facilities owned by private equity and restrict property transactions deemed as “self-dealing,” with firms seeking to enrich themselves from the transactions.
Senate Bill 489 would establish a task force to study private equity involvement in providing radiology services to a patient and how that involvement can contribute to negative patient, care or business impacts.

Prospect Medical Holdings’ journey from purchasing Waterbury Hospital in 2015 and the Eastern Connecticut Health Network, representing Manchester Memorial and Rockville General, in 2016 to its recently announced bankruptcy comes three years after Yale New Haven Health agreed to purchase its facilities in 2022, with the deal running into constant delays shortly after. The August 2023 cyberattack hampered operations for weeks, with the hospitals experiencing additional financial and operational concerns before and after; since then, there have been reports of delayed payments to physicians and issues with patient services, among other complaints.

A 2020 ProPublica report on Prospect Medical found its issues do not only apply to its Connecticut locations. It detailed hospital elevator breakdowns, lack of medical supplies, bedbugs and water leaks in patient rooms as part of a pattern of potential fraud and financial mismanagement before revealing all but one hospital owned by Prospect were ranked in the bottom 20% of all hospitals in the United States, hampering patient care and worsening patient outcomes.

“At the end of the day, about half a million people – one in seven Connecticut residents – live in the service area of these three impacted hospitals,” said Sen. Anwar. “Interruptions and issues with their care can worsen their health outcomes and create knock-on effects that hamper our medical systems statewide. These bills are meant to prevent the consequential mistakes we’ve seen with Prospect from being repeated in the future.”