Prospect Medical Holdings Files for Bankruptcy After $800 Million in Owner Payouts
Prospect Medical Holdings, a Los Angeles-based hospital system, filed for Chapter 11 bankruptcy, listing over $400 million in debt. This follows a similar collapse of Steward Health Care, also a private equity-owned system, highlighting a pattern of financial mismanagement within the industry. Both companies utilized hospital real estate value to finance large payouts to investors, diverting funds from patient care, a practice criticized in a recent Senate report. Despite claims of significant investment and charity care, the bankruptcy underscores concerns about private equity’s impact on community hospitals and access to healthcare.
John Q. Hosedrinker