The vulture capital capital: Inside private equity’s takeover of Hartford, Connecticut
When private equity bought the struggling hospital where Marilyn Anthony works, she says things quickly took a turn for the worse. One of the first things to go were the daily changes of patients’ bed linens, important for hygiene and cleanliness. “They put big signs on the linen carts [saying] that we were to only change the linen every third day unless they were obviously soiled. How disgusting…
Private equity firm Leonard Green & Partners and its majority owner Prospect Medical Holdings have taken over Waterbury Hospital in Hartford, Connecticut, leading to a decline in patient care and hospital operations. The hospital, which used to have daily changes of bed linens, began limiting linen changes to every third day, causing significant hygiene concerns.
The company also cut specialist jobs, like nurses who focused on open-heart surgeries or maternity ward care, and eliminated the on-site IT department. Management shifted its focus from providing healthcare to making money, and staff were instructed to call patients "customers" or "clients." Waterbury Hospital and two other hospitals in the Hartford area eventually went into bankruptcy due to the financial strain caused by private equity.
The lenders, including Prospect and Leonard Green, made over $600 million in dividends and fees, leaving the hospitals to pay back more than a billion dollars in debt on their own. This trend of private equity takeover is not unique to Waterbury Hospital and has spread to various aspects of Hartford's economy, including youth hockey leagues, fire truck manufacturing, and even newspapers.
Senator Chris Murphy of Connecticut believes that this rise of private equity is contributing to the coarsening of American life, with people feeling like everything is becoming a commodity. The city of Hartford is now taking steps to regulate private equity through laws and litigation, potentially serving as a model for other American cities facing similar issues.
Written by urgent.news from Fast Company's reporting — not their text. Machine-written — it may contain errors, so check the original before relying on it.
