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Wednesday, February 17th, 2021

Rich Investors Stripped Millions From a Hospital Chain and Want to Leave It Behind. A Tiny State Stands in Their Way.

Author:     Peter Elkind
Source:     ProPublica
Publication Date:     Feb. 4, 1:22 p.m. EST
 Link: Rich Investors Stripped Millions From a Hospital Chain and Want to Leave It Behind. A Tiny State Stands in Their Way.
Stephan:   One of the main takeaways for me from this pandemic is how it has brought into focus our abysmal illness profit system. In America healthcare is about making profit, not fostering wellbeing. Very few Americans seem to realize that about one-third of emergency rooms in this country are not owned by the hospitals that house them, they are owned by three hedge funds. And the hospitals themselves, 20.2% are state-owned, 58.5% are non-profit and 21.3 are for-profit. Collectively this system has produced healthcare that ranks 37th in the world, one of the worst systems in the developed world, yet the most expensive system on earth. Hopefully, the healthcare disaster the Covid-19 pandemic has produced will give the Biden administration the support they need to create universal birthright single-payer non-profit healthcare so that Americans can get the kind of healthcare other developed nations enjoy.

Private equity firm Leonard Green and other investors extracted $645 million from Prospect Medical before announcing a deal to sell it and leave it with $1.3 billion in financial obligations. Four states approved it — but Rhode Island is holding out.

In a David-and-Goliath battle, a group of Rhode Island officials and a union for hospital workers have so far stymied a multi-billion-dollar private equity fund’s attempt to unload its controlling stake in a national for-profit hospital chain. Investors led by the private equity firm, Leonard Green & Partners, previously extracted $645 million in dividends from the investment, and the firm now seeks to leave behind another $1.3 billion in financial obligations at the chain. In the face of more than a year of often-vehement public opposition in Rhode Island, the hospital chain suddenly agreed in the final days of December to pay $27.25 million to resolve a group of lawsuits they had previously refused to settle. But a Jan. 29 deadline for the state to approve the deal has been extended indefinitely and other obstacles remain.

Leonard Green and […]

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