The latest NPR/Frontline investigation focuses on very unequal resources at US hospitals due to market forces and unequal government support. The second half of the documentary focuses on the impact of private equity buying safety net hospitals, which has doubled in the last decade. An expert describes how private equity firms purchase under-valued hospitals, cut costs severely, leverage the assets by borrowing against them, while paying very large dividends to themselves and shareholders, then sell or close the hospitals.
The documentary focuses on Prospect Medical Holdings, a private equity firm that owns Waterbury Hospital, two Rhode Island hospitals, and 14 others. Before the sale, Prospect made big promises of large investments in quality and staffing to improve care for the community. But after the sale, Pastor Rodney Wade of Long Hill Bible Church became concerned when parishioners were in and out of the hospital, not getting the right care. He and other Waterbury clergy met with the CEO who told them to stay out of it. Two long term Waterbury Hospital staff related that patients were given paper towels to clean themselves for the day, and linens were changed only every three days. Workers were told not to talk about short staffing and the lack of supplies in the hallways, as patients might hear and worry that the quality of care is being compromised.
In response to the concerns, last month Rhode Island’s Attorney General required Prospect to put $120 million in escrow to ensure their two hospitals’ viability. In response, Prospect threatened to close the hospitals.