Murphy On Prospect Medical In Connecticut: Every Decision In A Hospital Is Different If You Are Making Money To Provide Good Health Care Versus Making Money To Make The Owners[...]

WASHINGTON-U.S. Senator Chris Murphy (D-Conn.) on Thursday spoke at a U.S. Senate Health, Education, Labor, and Pensions Committee hearing, "Examining the Bankruptcy of Steward Health Care: How Management Decisions Have Impacted Patient Care." Murphy highlighted a similar case in Connecticut, explaining how Prospect Medical Holdings bought Rockville General, Manchester Memorial, and Waterbury Hospital and have since run them into the ground. In his questions to Ellen MacInnis, a nurse at St. Elizabeth's Medical Center in Boston, Murphy argued that the corporate greed of private equity firms has subverted the purpose of healthcare by gutting services to line the pockets of billionaires.

Murphy described how Prospect Medical Holdings bought three hospitals in Connecticut and prioritized profit over patients and quality of care: "In 2016, a company called Prospect Medical Holdings, that is owned by a private equity company, Leonard Green & Partners, bought three hospitals in Connecticut. Three small hospitals: Manchester Hospital, Waterbury Hospital, Rockville Hospital. You know exactly what happened. Immediately, they started stripping services out of these hospitals. Same story you're telling. All of a sudden, supplies started running short. All of a sudden, specialists couldn't be found because they were cutting them off of the rolls. The elevators stopped working in these hospitals. Just like they did in your hospitals."

He continued: "By 2018, these hospitals were in trouble. Everybody knew it. Prospect was looking for a new buyer to just flip the hospitals to make more money. In that year, in 2018, Leonard Green took [$457] million in fees and dividends as these three hospitals in Connecticut were essentially dying in front of our eyes. Patient quality was being compromised. John Danhakl is the Managing Partner of Leonard Green. There are various reports about how much he's worth, but likely in the neighborhood of $1 billion."

On the life-and-death consequences of commoditizing health care, Murphy said: "How have we let American capitalism get so off the rails, so unmoored from the common good, that anybody thinks it's okay to make a billion dollars off of degrading healthcare for poor people in Waterbury, Connecticut? (A), How do you live with yourself? But (B), Why do we accept that as a country? This is just a choice, to decide to commoditize our health care system-in Connecticut, in Louisiana, in Massachusetts, in every state across this country. And we have enough data at this point to know quality is worse, often way worse, when these private equity companies come in. And not just in hospitals. In nursing homes, the death rate in nursing homes owned by private equity firms is 10% higher than in those not owned by private equity firms. So there is no mystery as to what is going on here."

Murphy concluded: "Nobody begrudges a hospital for making decisions that allow it to make more money than it puts out. But the question is this: are you making money for the purpose of providing good health care, or are you making money for the purpose of making the owners filthy rich? And every decision that happens in a hospital is different if you are making money to provide good health care versus making money to make the owners filthy rich."

A full transcript of his remarks can be found below:

MURPHY: "Thank you all for being here. This is a very important hearing. It's important because while we are focused on this particular company and this set of horror stories, what is happening in your hospitals is happening all across the country. I wish this were not true, but there are hundreds of Ralph de la Torres' who are making a disgusting fortune off of withholding health care from people in need.

"So, I just want to tell you a quick story about what's going on in Connecticut. In 2016, a company called Prospect Medical Holdings, that is owned by a private equity company, Leonard Green & Partners, bought three hospitals in Connecticut. Three small hospitals: Manchester Hospital, Waterbury Hospital, Rockville Hospital. You know exactly what happened. Immediately, they started stripping services out of these hospitals. Same story you're telling. All of a sudden, supplies started running short. All of a sudden, specialists couldn't be found because they were cutting them off of the rolls. The elevators stopped working in these hospitals. Just like they did in your hospitals.

"By 2018, these hospitals were in trouble. Everybody knew it. Prospect was looking for a new buyer to just flip the hospitals to make more money. In that year, in 2018, Leonard Green took [$457] million in fees and dividends as these three hospitals in Connecticut were essentially dying in front of our eyes. Patient quality was being compromised. John Danhakl is the Managing Partner of Leonard Green. There are various reports about how much he's worth, but likely in the neighborhood of $1 billion. How have we let American capitalism get so off the rails, so unmoored from the common good, that anybody thinks it's okay to make a billion dollars off of degrading healthcare for poor people in Waterbury, Connecticut? (A), How do you live with yourself? But (B), Why do we accept that as a country? This is just a choice, to decide to commoditize our health care system-in Connecticut, in Louisiana, in Massachusetts, in every state across this country. And we have enough data at this point to know quality is worse, often way worse, when these private equity companies come in. And not just in hospitals. In nursing homes, the death rate in nursing homes owned by private equity firms is 10% higher than in those not owned by private equity firms. So there is no mystery as to what is going on here.

"Ms. MacInnis, I wanted to just ask you a simple question. You talked about this before, but let's acknowledge that every hospital has to make money. You have to make money in order to operate. Nobody begrudges a hospital for making decisions that allow it to make more money than it puts out. But the question is this: are you making money for the purpose of providing good health care, or are you making money for the purpose of making the owners filthy rich? And every decision that happens in a hospital is different if you are making money to provide good health care versus making money to make the owners filthy rich. You were there before and after."

MACINNIS: "Yes, I was."

MURPHY: "So just, in the remaining minute, tell us a little bit about what it was like on the ground floor before this company comes in, and then after the company comes in. Can you feel it as an employee? The difference in the value system of the owners?"

MACINNIS: "Yes, it's noticeably different. I used to work on an interim coronary care unit, and we gave the best care. We took care of some of the sickest patients outside the ICU and we gave the best care. We had a one to three, a one to four ratio. I never, ever, ever, in the 2.5 years I worked on that floor, we never had a code. And that's because we were able to rescue our patients. We had enough eyes, enough hands, good assessments, good monitoring, enough nurses around, frankly."

MURPHY: "Because the focus was on providing good care."

MACINNIS: "Because the focus was, yes. And when things got tight, what Caritas Christi did was they let go assistant nurse managers, and then they let go other people. The very last thing that they did, and they actually never did, was get rid of staff nurses, get rid of bedside nurses. They kept us well staffed. And we took the best care of our patients. I was so proud to work at Saint Elizabeth's. After Steward took over, it's just axe, and axe, and just taking away everything. Violating agreements that they made with us. They laid off all the nursing assistants on the maternity floors. Imagine running a maternity floor with no-well, I can tell you as a nurse, it's an absurd prospect. They lay off our educators. Now they're cutting patient-facing staff. Whereas Caritas Christi absolutely prioritized that. To the point where they stopped funding our retirement plan, they took away a lot of other things before they took anything away from our patients."

MURPHY: Because the purpose is now to make as much money to make the owners filthy rich. When there's a fundamental difference in the purpose, there's a fundamental difference in what happens inside that hospital, and that's just the reality.

MACINNIS: "Yes."

MURPHY: "Thank you."

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