HARRISBURG, Pa. (KYW Newsradio) — The head of Pennsylvania’s Department of Human Services was before the Senate Appropriations Committee discussing the most expensive department in state government, amid uncertainty at the federal level, including what private equity is doing to health care providers across the state.
Human Services Secretary Val Arkoosh was asked about Gov. Josh Shapiro’s emphasis on limiting private equity firms acquiring medical systems and hospitals. Arkoosh says the hedge funds often sell off buildings or property to a real estate investment trust, then lease it back to the hospital.
“It's just a playbook that ends in the way that they're all ending, which is, at some point the original entity runs out of money. They can't carry that operating cost of having to pay some sort of rent or lease payment for the land that they sit on or the building. And eventually they’re looking at some kind of bankruptcy situation.”
In his questioning of the secretary, Delaware County Sen. Tim Kearney noted the funds bank on reliability of Medicaid and Medicare, then pulling profits out of the hospital without reinvesting in facilities or infrastructure, pointing to a recent incident at Crozer-Chester Medical Center.
“They literally had a fire in a mechanical room that was directly traced to the fact that they hadn't been doing ongoing maintenance on the mechanical systems,” he said.
Arkoosh says the hedge funds are essentially “pillaging” the medical system, noting its a major problem with nursing care centers as well, and called on the Senate to work with the governor on a solution.
Arkoosh says she has no additional information on what to expect from Washington, other than what’s been made public, including the congressional committee that oversees Medicare and Medicaid looking to cut $880 million from its budget.
“I just want Pennsylvanians to know that right now nothing has changed, that their Medicaid is safe, their SNAP is safe, nothing has changed.”
Asked about various proposals currently being floated in Washington, Arkoosh says Pennsylvania’s seniors and disabled would be the most affected.
Arkoosh says many health systems across Pennsylvania are already on shaky ground, and if they’re required to treat everyone during an emergency, even if they don’t have insurance.
“Their amount of uncompensated care would rise dramatically. And there's not a hospital in this commonwealth, even ones that have positive profit margins today, that could accommodate that kind of increase.”
Arkoosh addressed many other issues that fall under DHS, including access to affordable childcare, drug addiction treatment, mental health, and addressing a lack of beds in the juvenile detention system.