[Hartford, CT] - U.S. Senator Richard Blumenthal (D-CT) issued the following statement in response to a new bipartisan staff report released today by the U.S. Senate Committee on the Budget detailing the results of a year-long investigation into the effects of private equity ("PE") ownership of health care institutions. The investigation included hospital operator Prospect Medical Holdings, a California-based for-profit private equity firm owned by Leonard Green & Partners, which owns multiple hospitals in Connecticut.

"This report has one inescapable conclusion: private equity's sole purpose of fattening its bottom line is inherently incompatible with quality health services. As the report reiterates, Prospect Medical, which owns a number of facilities in Connecticut, used its hospitals as its personal piggy banks," said Blumenthal. "Concerning evidence in the report shows that Prospect Medical and other firms are putting profits over patients leading to insufficient staffing, delayed care, safety violations, and hospital closures. Patients should not bear the burden of corporate greed. I will continue to push for more transparency and regulation and fight to hold private equity firms accountable to the patients they serve."

In Connecticut, Prospect Medical Holdings purchased Rockville General, Manchester Memorial, and Waterbury Hospital and have since allowed the facilities to deteriorate, default on rent and taxes, and mismanage their assets, running the facilities into the ground. Prospect's actions have already led to the postponement of surgeries and inadequate staffing at the three hospitals.

According to records obtained by Senate investigators, in 2022, as Prospect Medical closed emergency departments due to financial strain, Prospect Medical CEO, Sam Lee, invested heavily in upgrading his Aspen property, one of two homes he owns valued at a combined $20 million. The report also found that Leonard Green exercised significant control over Prospect Medical's finances and operations. The findings also show that executives at Leonard Green granted stock options to Prospect Medical officials for reaching financial goals, but did not provide similar incentives or compensation for improvements to patient quality and safety.

Blumenthal recently wrote to the Department of Health and Human Services (HHS) urging action to address PE in health care, requesting information on HHS's ability to address harms, and asking if any additional authorities needed to increase transparency of PE ownership of health care entities. The letter highlights the challenges wheelchair users face obtaining critical repairs for their devices due to PE involvement in health care.

Blumenthal was also a co-sponsor of the Health Over Wealth Act in the 118^th Congress, legislation that would require greater transparency for private equity firms and for-profit companies that own health care entities, including hospitals, nursing homes, and mental or behavioral health facilities. The legislation would put safeguards in place to protect workers, patients, and health care quality, access, and safety; create stronger accountability measures for corporate greed; and close tax loopholes that benefit real estate investment trusts making money off of health care property.

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