CHESTER, PA — Governor Josh Shapiro has announced a series of measures to reform health care regulations in Pennsylvania following the closure of Crozer Health, which left more than 3,000 health care workers unemployed and burdened Southeastern Pennsylvania. Standing alongside health care workers and local leaders, Governor Shapiro called for legislative action to prevent further harm caused by private equity firms in the health care sector.
The Governor is advocating for the Health System Protection Act, which aims to curb exploitative practices by private equity firms. The legislation would ban sale-leaseback schemes that divert hospital funds and enable the Office of Attorney General to block or regulate health care acquisitions involving for-profit organizations. “Private equity has no place in our health care system,” Shapiro stated, adding, “We cannot allow for-profit companies to treat our hospitals like piggy banks.”
The closure of Crozer Health, owned by Prospect Medical Holdings, followed the company’s decision to sell hospital properties to a real estate trust, accruing over $200 million in debt. Despite efforts by the state and local officials to support the system, Prospect declared bankruptcy, leading to cuts in critical services, including Delaware County’s only trauma center and burn unit.
Shapiro’s administration has mobilized support for displaced workers and emergency services. This includes allocating $1 million for EMS funding, hosting job fairs for former Crozer employees, and offering workforce development training in collaboration with Widener University. “We’ve taken action to help those affected,” Shapiro said, while urging the General Assembly to pass the proposed reforms.
The Health System Protection Act, introduced by State Senator Tim Kearney and Representative Lisa Borowski, is set to be debated in June. It seeks to prevent future health care closures by addressing practices that prioritize profits over patient care. “We must prevent the next Crozer,” emphasized Dr. Max Cooper, a former Crozer ER doctor, reflecting the urgency expressed by local leaders and health care advocates.
The Governor’s plan represents a critical step in safeguarding health care in Pennsylvania and addressing the systemic challenges posed by private equity in the sector.
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