Private Equity Firms Acquire Hartford Hospitals, Lead to Bankruptcy

Several private equity firms have acquired and managed struggling hospitals in Hartford, Connecticut, resulting in substantial service reductions and eventual bankruptcy.

Marilyn Anthony, a nurse with nearly 25 years of experience at the hospital, stated that after Waterbury Hospital, formerly a non-profit, was acquired by a private equity-backed company in 2016, austerity measures began. Staff were instructed to change patient bed linens only every third day unless obviously soiled. Specialist staff, such as cardiac surgery nurses and maternity aides, were also reduced.

The hospital's owner, Prospect Medical Holdings, and its majority owner, Los Angeles-based private equity firm Leonard Green & Partners, sold the hospital chain's real estate and saddled it with over a billion dollars in debt. The firms paid themselves and other investors more than $600 million in dividends and fees before the hospitals entered bankruptcy proceedings.

Anthony discovered her hospital's experience was not unique. In Hartford, other community assets, including the newspaper, special education schools, and nursing homes, have also been purchased by private equity firms, often leading to diminished resources and degraded services.

Local lawmakers, such as State Senator Saud Anwar, have expressed concern over the expanding influence of private equity, calling it a "spreading cancer." Hartford has begun taking steps to rein in private equity through legislation and litigation, potentially serving as a model for other cities facing similar challenges.