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Senate Co-Sponsorship Memoranda
Senate of Pennsylvania
Session of 2025 - 2026
Regular Session
MEMORANDUM
| Posted: | January 14, 2025 12:20 PM |
|---|---|
| From: | Senator John I. Kane and Sen. Timothy P. Kearney, Sen. Amanda M. Cappelletti, Sen. Anthony H. Williams |
| To: | All Senate members |
| Subject: | For-Profit Healthcare Reform: Minimum Severance for Mass Layoffs |
| Health care in Delaware County is under siege from for-profit operators. Just yesterday, Prospect Medical Holdings, the for-profit private equity owner of Crozer Health filed for Chapter 11 bankruptcy. Crozer Health, Delaware County’s major hospital system, is on the brink of collapse. Vital health care services and jobs are on the line. Crozer Health’s for-profit parent company Prospect Medical Holdings has a history of acquiring hospitals, siphoning funds from the hospitals to generate substantial revenue, and then selling the hospital and health system real estate assets to another for-profit entity owned by a private equity company. This leaves the hospital and health systems with major financial burdens, debts, and large rent payments to the for-profit real estate owner. To deal with this financial burden, the firm running the hospital and health systems will shut down healthcare and hospital services and cut staff to generate a short-term profit and sizeable dividend. The cuts to services and staff are so dramatic, that hospitals and health systems find themselves underfunded, understaffed, and overwhelmed, eventually resulting in closure. In other words, this is all according to their plan. This insidious gameplan has been executed by Prospect Medical Holdings or other private equity firms at health care institutions in Mercer County, the City of Philadelphia, Rhode Island, Massachusetts, Connecticut, Iowa, California, and other states. Prospect Medical Holdings conduct, and business dealings were so bad and so many lives were at risk that the Office of Attorney General, led by Attorney General Michelle Henry, filed a lawsuit in Delaware County Common Pleas Court against Prospect Medical Holdings to appoint a receiver to manage the two remaining hospitals in the Crozer Health System until a suitable buyer could be found. In the legal filing Attorney General Henry said that the suit was being filed due to PMH’s “years of mismanagement, corporate looting, and the neglect of the hospital system, it’s patients, and its staff.” The mismanagement and corporate looting, led to the closure of Crozer Health’s Springfield and Delaware County Memorial Hospitals. Two more hospitals in the Crozer System, Crozer-Chester Medical Center and Taylor Hospital are in serious financial and operational trouble. Mass layoffs disproportionately impact workers causing significant emotional, physical, and mental stress. Workers are the engines that keep our hospitals and health systems running and that generate revenue for companies and shareholders in many businesses across the commonwealth. This legislation requires minimum severance payments to workers during mass layoffs. The legislation includes numerous provisions including:
Last year, we introduced this bill as Senate Bill 547. Co-sponsors included Senators Saval, Fontana, Costa, Dillon, Muth, Collett, and Brewster. Please join us to support this bill that will disincentivize mass layoffs, provide better benefits for workers, and prevent hospital and business closures from occurring across the Commonwealth. |
Memo Updated: January 14, 2025 12:22 PM