When Profit Trumps Patients

In 2016, Leonard Green & Partners, an influential private equity firm, acquired Prospect Medical Holdings, a system then branded as a nonprofit safety-net operator. That takeover included three vital Connecticut hospitals: Waterbury Hospital, Manchester Memorial, and Rockville General. A decade later, a damning Senate investigation by U.S. Senator Chris Murphy reveals the grim fallout of that deal (Murphy Report).

Murphy’s report, A Dangerous Prospect: How Private Equity Decimated Connecticut Hospitals, paints a stark picture of deteriorated infrastructure, supply shortages, and chronic staff shortages that left patients and healthcare workers bearing the brunt of decisions made in Wall Street boardrooms. He concluded that the system was run as a “profit-driven model that exploits dedicated healthcare workers while enriching investors” (Murphy Press Release).

One of the most glaring financial maneuvers was a sale-leaseback scheme: Prospect sold the hospitals' real estate to Medical Properties Trust and then leased them back. This generated $1.4 billion to cushion debt and pay dividends—but saddled the hospitals with triple-net leases, amplifying their financial burden under mounting rent and upkeep costs (CT Mirror).

https://ctmirror.org/2025/02/26/private-equity-deals-endanger-ct-hospitals/

By January 2025, the financial strain had become impossible to ignore, Prospect Medical Holdings filed for Chapter 11 bankruptcy, with liabilities estimated between $1 billion and $10 billion (CT News Junkie). State officials and community leaders have closely watched the fallout, warning of jeopardized access to care during the restructuring process.

Patients and staff in Connecticut didn’t stay silent. Murphy launched a “Share Your Story” campaign, inviting testimonies of harm and mismanagement. Prospect’s CEO, Deborah Weymouth, objected, saying the campaign could undermine morale and hinder efforts to find a responsible buyer. Murphy insisted the campaign was critical for accountability and to give a voice to those harmed since the 2016 acquisition (CT Insider).

As the hospitals’ fate hangs in the balance, efforts to rein in PE influence in healthcare have repeatedly faltered. In the 2025 legislative session, Connecticut lawmakers failed, for the second straight year, to pass any meaningful reform. Two competing bills, one calling for explicit bans on PE ownership, the other strengthening transaction oversight, both died in committee despite bipartisan and institutional support (CT Mirror).

Why This Story Matters

This isn’t just hospital business, it’s a symptom of a healthcare system pushed to breaking point by the relentless pursuit of profit. The collapse of these essential hospitals demonstrates how privatized care under PE ownership can erode community trust, infrastructure, and access, especially when photo ops and payouts win over patient wellbeing.

Looking Ahead

Connecticut now faces a crossroads: will these hospitals be sold to mission-aligned nonprofits, or will the cycle of profiteering continue? Without urgent reform, we risk cementing a dangerous precedent: healthcare not as healing, but as another asset class, one far too valuable to let be dismantled for dividends.