Congresswoman Scanlon, Senator Murphy Introduce Legislation to Ban Private Equity Ownership of Hospitals and Nursing Homes

Congresswoman Scanlon, Senator Murphy Introduce Legislation to Ban Private Equity Ownership of Hospitals and Nursing Homes

The Take Back Our Hospitals Act would end predatory financial practices that gutted Crozer Health and are threatening patient care in communities across the country.

Washington, D.C. - Congresswoman Mary Gay Scanlon (PA-05) and Senator Chris Murphy (D-CT) this week introduced the Take Back Our Hospitals Act, legislation that would prohibit private equity firms from owning hospitals and skilled nursing facilities. The bill responds to a growing crisis driven by private equity's takeover of health care providers across the country-a model that has produced higher prices, worse care, mass layoffs, and a record wave of health care bankruptcies, stripping communities of the hospitals they depend on.

Rep. Scanlon has led a continuing effort to sound the alarm on private equity's takeover of medicine. Shortly after she took office, Rep. Scanlon raised concerns over the financial practices of Leonard Green & Partners that placed Prospect Medical Holdings facilities and patients at risk, and has continued to criticize reductions in service, facility closures, and harmful business practices. She raised the issue in oversight hearings with the Federal Trade Commission, and in June 2024, she led House and Senate colleagues in submitting a detailed response to a landmark cross-government inquiry by the Federal Trade Commission, the Department of Justice, and the Department of Health and Human Services on consolidation and corporate greed in health care markets. Rep. Scanlon's submission detailed the damage inflicted on Crozer Health and Hahnemann University Hospital by their respective private equity owners, and called on regulators to treat long-term financial viability as a factor in antitrust review of health care mergers.

"What happened to Crozer Health is a cautionary tale for communities all over the country. Prospect Medical Holdings, a private equity firm, acquired the Crozer Health system, promising increased investment and better care. Instead, it drove Crozer into bankruptcy, closing four hospitals, laying off 2,600 health care professionals, and leaving Delaware County with just two hospitals to serve its 585,000 residents," said Rep. Scanlon. "This is what happens when private equity treats our hospitals as cash cows. We cannot allow Wall Street's race for profits to shutter more hospitals and nursing homes. The Take Back Our Hospitals Act will ensure that hospitals and nursing homes exist to serve patients, not Wall Street investors."

"Private equity's general business model is pretty simple: find hospitals that are in dire financial straits, make promises to fix things and then squeeze every cent they can out of patients before leaving communities to deal with the wreckage," said Senator Murphy. "I saw this happen in Connecticut and it was devastating for patients and for the doctors and nurses who were desperately trying to take care of people as facilities were falling apart and supplies ran short. Patient care, not profit, should be the priority in hospital and nursing home care, and my legislation would get these firms out of health care and allow hospitals and nursing homes to put care first."

"We didn't just witness the devastating consequences of private equity ownership during the collapse of Crozer Health in Delaware County-we were on the ground and at the bedside, living through it in real time. We saw what happens when profit is prioritized over patient care: Patients, frontline healthcare workers, and entire communities pay the price in the moment, and they continue to pay the price for years afterward," said Maureen May, RN, president of PASNAP, the Pennsylvania Association of Staff Nurses and Allied Professionals, which represents more than 11,000 frontline caregivers across Pennsylvania. "Private equity used Crozer as a piggy bank, ruthlessly and systematically draining what was once a four-hospital health system of every penny, and healthcare in Delaware County is still destabilized today, a year after Crozer's doors closed. Surrounding hospitals are still struggling to deal with the flood of patients, and community members are still struggling to access care. The Take Back Our Hospitals Act is a critical step toward ensuring this doesn't happen anywhere else, ever again, and PASNAP is proud to support this effort to protect our patients, our hospitals, and our healthcare system."

The Take Back Our Hospitals Act would bar hospitals and skilled nursing facilities from receiving Medicare funds if they are owned by a private equity company, effectively prohibiting private equity ownership of these providers. To protect patients and ensure continuity of care, the bill provides a three-year transition period for private equity-owned providers to complete a sale or transfer.

Private equity investment in health care has grown from $5 billion in 2000 to an estimated $104 billion in 2024. The consequences have been severe: studies show private equity ownership leads to higher prices, staffing cuts, and worse patient outcomes, and 2023 set a record for private equity-owned health care bankruptcies. The Take Back Our Hospitals Act would close the door on this failed model and ensure that patient care remains the primary obligation of hospitals and nursing homes.

The legislation is endorsed by the American Economic Liberties Project, Public Citizen, Private Equity Stakeholder Project, Center for Health and Democracy, Pennsylvania Association of Staff Nurses and Allied Professionals, Service Employees International Union, National Consumer Voice for Quality Long-Term Care, Community Catalyst, National Nurses United, and the Committee to Protect Health Care.

Find the full bill text here.

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