Prospects medical systems dismiss 125

Diving brief:

• Prospect Medical Systems plans to dismiss 125 administrative workers in California as of July 1, according to the opinions filed with state regulators last week.
• The organization of management services belongs to Prospect Medical Holdings, which deposited the bankruptcy of chapter 11 in January. Prospect Medical Systems is responsible for the care of 600,000 members in 28 networks held or managed in five states, according to the Prospect website.
• Prospect Medical Holdings is currently trying to sell medical systems as a prospect, as well as its pharmacy activities, its health plan, its medical groups and a medical center in Astrana Health, based in California, for $ 745 million.

Diving insight:

Prospect allowed assets since he declared bankruptcy at the start of the year, disclosing billions of liabilities.

Prospect concluded an agreement in February to sell its two hospitals in Rhode Island at the Centurion Foundation, a non -profit health care operator based in Georgia, for $ 160 million.

However, the health system told bankruptcy court that it had not found appropriate buyers for installations in Pennsylvania and Connecticut. Drawers allege that the lack of interested buyers is due to the mismanagement of the facilities of the perspective.

In May, Prospect closed two hospitals based in Pennsylvania – Crozer -Chester Medical Center and Taylor Hospital – saying in court that he had no money to keep the lights on without buyer. The closures have triggered indignation throughout the state and prompted local legislators to put pressure for more monitoring in business ownership.

Meanwhile, Prospect remains in dispute with Yale New Haven Health during an effort of several years to sell three of his hospitals. Yale New Haven wants to get out of the agreement for more than a year, saying that the financial mismanagement of installation prospects and the general neglect of hospitals have made an untenable sale.

Part of the problem, according to criticism, stems from the old prospect’s relationship with the investment company Leonard Green & Partners. A one-year-old Bipartisan report of the Senate revealed that the investment capital company prompted the health system to take excessive debt and use “profits maximization tactics” to the detriment of patient care.

During the management of prospects by Leonard Green, the health system paid $ 645 million in dividends and a privileged stock repurchase to its investors – of which $ 424 million went directly to pay the Green Leonard investors. Meanwhile, the quality of hospitals has deteriorated, according to the Senate report.

This month, the senator Chris Murphy, D-Conn., Launched a campaign asking the Connecticut residents to share their stories about how the poor management of Prospect Medical Holdings had a negative impact on their access to care in order to support more regulation of investment capital in health care.

“It was an error to let the investment capital control a large part of our health care system, but it is not too late for us to change course,” said Murphy, echoing the statements made by Pennsylvania Josh Shapiro Governor during a visit to the Closed Hospitals Crozer a month before.