In light of the recent bankruptcy of the parent company of Delaware County’s Crozer Health System, we are reintroducing our legislation to prevent the exploitation and avoidable closure of hospitals by creating an oversight process that protects the public interest during mergers and major transactions.
 
Hospital consolidation and closure is occurring at an alarming rate in Pennsylvania. It is creating healthcare deserts across the Commonwealth and affecting quality of life as communities are left without reasonable access to healthcare services.
 
Unfortunately, data shows that these mergers and acquisitions often precede consolidation and discontinuation of services, closure of units, or even entire hospitals-especially when private equity is involved. In recent years, private equity firms employing leveraged buyout strategies have increasingly entered and grown in the healthcare sector, growing from 325 private equity deals in 2010 to over 1,400 in 2021 across the US. An increasing share of Pennsylvania’s health care facilities have been purchased by private equity firms that promise to maintain services, jobs, and keep the doors open. However, oftentimes private equity firms employ financial strategies and deals that undercut hospital operations, short- and long-term feasibility, affordability, and access to healthcare in the communities they serve.
 
This issue is affecting rural, urban, and suburban communities throughout the country. Many states are creating laws to address the risks to their healthcare systems, and Pennsylvania must not be left behind. As legislators, we must ensure that we are protecting the sustainability of our most critical healthcare institutions. Our legislation proposes a process for evaluating large financial transactions involving health systems and allowing for intervention when they pose a threat to public’s access to care.
 
The Attorney General’s office has limited authority to review hospital mergers and is missing many of the tools necessary to effectively oversee ill-fated mergers and financial transactions that undermine the sustainability of hospital operations and patient access to quality care. Without needed state statutes to protect the interests of healthcare patients in Pennsylvania, our state is fighting with one hand tied behind its back to combat predatory mergers and anticompetitive business practices in healthcare.
 
Our legislation will provide the Attorney General with the necessary authority to evaluate mergers and large financial transactions involving health systems and allow for intervention when they pose a threat to the public. This framework allows for evaluating deals on a case-by-case basis to determine what is in the best interest of patients, communities, and their right to accessible and affordable healthcare. It provides transparency and accountability for all taxpayers whose dollars fund the American healthcare system.
 
Please join us in creating a better policy to protect Pennsylvania’s health systems and access to healthcare for all Pennsylvanians.