PHILADELPHIA (KYW Newsradio) — More than 2600 healthcare workers are losing their jobs as Crozer Chester Medical Center and Taylor Hospital close, and some Pennsylvania legislators said the blame lies with a for-profit health system, and that they are pushing for legislation to stop it.
For the third consecutive legislative session, State Senator John Kane introduced a bill to prohibit for-profit entities, like Prospect Medical Holdings, from owning hospitals and health systems in Pennsylvania. So far, the bill had failed to reach the state Senate floor for a vote.
“When I first got elected in 2020, Chester Crozer Hospital was constantly saying that they needed more money. They were failing. They were losing money,” said Kane. “They were talking about the fact that they were going to be shutting down. For-profit should not even be allowed in the state of Pennsylvania to purchase healthcare systems.”
The bill itself reads: “A for-profit entity may not own or manage a hospital or health system in this Commonwealth.”
During a rally earlier that week, State Representative Leanne Krueger indicated that House Democrats had been drafting similar legislation to address the issue.
“Our delegation is writing at the capital working on bills to ban private equity in healthcare and ban lease-back deals,” said Krueger.
Lease-back deals are when a parent company, like Prospect, forces a subsidiary, like Crozer, to lease property or equipment to maximize profits for the parent company.
“There is no hospital within a 35-minute ride from Crozer Chester Hospital and Taylor,” said Kane. “I can assure you there are people whose lives are going to be lost because of the shutdown of this hospital.”
Taylor Hospital closed on Friday, April 25, and Crozer-Chester Medical Center will follow on May 2. The closures of Crozer and Taylor follow the pattern of recent hospital shutdowns. Since 2023, six other hospitals and 11 nursing facilities have either closed or filed for bankruptcy, most, according to the governor’s office, are owned by private equity firms like Prospect Medical Holdings.
Governor Josh Shapiro has called for legislative action to curb the influence of private equity in healthcare, urging the legislature to empower the Attorney General’s office to review hospital sales and mergers.
“Private equity should get out of the hospital business in Pennsylvania and stop stripping money and resources and leaving entire regions without care,” Shapiro said in his recent budget proposal.
Kane’s bill remains stalled in the Senate, however, he expressed hope that this time, the bill might finally make it to the floor for a vote and said that legislators should consider gouging healthcare systems as a crime.
“My thought is to criminally charge the executives and the CEO for what they did here — if we start holding people accountable and prosecuting them and sending them to jail, maybe, they won't do this ever again,” he said.
In addition to the 2,600 healthcare workers who lost their jobs in Delaware County, 142 subcontracted employees were also laid off by the health system this week.
FTI Consulting, which has been operating as a receiver for Crozer Health during the bankruptcy process, stated this week that with the closure, they are no longer serving in that role.