Private Equity Firm purchases Pa Hospital, paid all their executives hundreds of millions of dollars

", sold their land, then started charging the hospital $35 million per year in rent forcing the hospital to shut down

“The private equity firm that owned and shut down this Delco hospital pocketed hundreds of millions of dollars in the process, while it left its community stranded of emergency services. And it has already ruined lives.

- Prospect Medical Group bought the nonprofit Crozer Hospital System back in 2016, while the hospital system was struggling financially
- 2 years later, in 2018, Prospect took out a $1 billion loan and then paid out investors over $450 million
- The CEO, Sam Lee, pocketed almost $100 million

And obviously, when you take out a loan, you have to pay it back. So Prospect sold all the land and buildings of all the hospitals they owned across the country to a real estate Investment Trust for $1.4 billion. That real estate trust then rents out the land and the buildings back to the hospitals in what's called a sale leaseback agreement.

For the Crozer system in Delco, this now meant that they had to pay $35 million a year in rent to the trust. That's $35 million a year in rent that they didn't have to pay before Prospect took over.

On top of that, Prospect was accused of aggressively cost cutting, reducing quality of care at their hospitals, and got sued multiple times for Medicare fraud. Surprise, surprise. Prospect had to file for bankruptcy back in January, listing debts of more than $400 million, which is also suspiciously similar to the 450 million that was paid out to investors back in 2018.

So Prospect had to shut down two of its hospitals here in Delco, making it much harder for the people in this area to get the proper care they need. Quite literally, some people in emergency situations will now, because of the extra time it takes to get to another hospital.

And mind you, that is not an exaggeration. It has already happened — The Prospect investors basically got away with all of this, and they're now hundreds of millions of dollars richer.”"