Shapiro Addresses Crozer Health Crisis, Calls for Legislative Action

Pennsylvania Gov. Josh Shapiro visited delaware County recently to address the escalating healthcare crisis stemming from the closure of crozer Health by Prospect Medical Holdings. Standing alongside healthcare workers, local leaders, and community members, Shapiro outlined his administration’s plan to support affected workers, maintain essential emergency services, and hold private equity firms accountable for their actions.

The governor emphasized the need for the General Assembly to pass the Health System Protection Act, legislation designed to curb exploitative private equity practices and empower the state’s Attorney General to block deals that threaten access to care. The proposed law, also known as HB 1460, aims to prevent the types of actions that led to the Crozer Health crisis.

Shapiro announced $1 million in new funding, coordinated with the Delaware County delegation, to maintain emergency medical services (EMS) in the region. This funding is intended to ensure that EMS remains available and responsive to the community’s needs despite the recent hospital closures.

“Private Equity Has No Place in Our Health Care System”

Governor Shapiro minced no words when discussing the role of private equity in the healthcare system. Private equity has no place in our health care system. We’ve seen what happens when corporate raiders like Prospect Medical Holdings prioritize profits over patients – families lose access to care, health care workers lose their jobs, and communities across the Commonwealth suffer, he stated.

He further elaborated on the situation at Crozer Health, saying:

Private equity raided Crozer, lined their pockets, and gutted the system – leaving Chester residents and those living in the region without care, putting their lives at risk. We cannot allow for-profit companies to treat our hospitals like piggy banks thay can smash and walk away from. We’ve taken action to help those affected – but to protect communities across our Commonwealth, we need to take real action and change the laws that allow private equity to raid our health care system and threaten Pennsylvanians’ livelihoods. It’s time to act and get this done.
gov. Josh Shapiro

The governor’s remarks highlight the growing concern over the impact of private equity on healthcare access and quality in Pennsylvania.

The Downfall of Crozer Health: A Case Study in Private Equity’s Impact

Prospect Medical Holdings acquired Crozer Health in 2016 for $300 million, promising to keep the system open for at least a decade. However, just nine years later, the company declared bankruptcy after selling Crozer’s hospital properties to a real estate investment trust. This move burdened the system with over $200 million in mortgage debt and failed to address $150 million in pension obligations.

Over the past three years, Prospect closed four hospitals in Delaware County, including Crozer-Chester Medical Center and Taylor Hospital. This series of closures has considerably reduced healthcare access for the region’s residents.

Dr. Monica Taylor,Chair of the Delaware County Council,described the situation as a simple story about greed. She added:

Prospect Medical Holdings came to town, bought Crozer, broke our health care system, and paid themselves hundreds of millions of dollars to do it. Not long ago, 576,000 people once had six great hospitals to care for their families. now they have just two. We strongly support Governor Shapiro – and our Delco delegation – as we reimagine our future and protect ourselves before private equity tears every fabric from the thread of our economy and the futures our residents in Delco – and every Pennsylvanian – deserve.
Dr.Monica Taylor,Chair of the Delaware County Council

Efforts to Save Crozer Health Fall Short

For over two years,the shapiro Administration worked with the Office of Attorney General,state legislators,and local government to try to save Crozer Health. The administration committed millions to support the system and its workforce, ensuring that no taxpayer dollars enriched Prospect Medical Holdings.

Over the past seven months, the Governor’s Office authorized more than $15.5 million to keep Crozer’s doors open, including $10 million in advanced Medicaid funding. This funding was contingent on a commitment from Prospect to maintain services through July 2025,a promise the company broke when it declared bankruptcy in January 2025.

The closure of Crozer Health resulted in Delaware County losing its primary trauma center and only burn unit. More than 3,000 healthcare workers are now without jobs. This situation is not unique to Delaware County; at least 26 hospitals have closed in Pennsylvania in the last five years, including four for-profit facilities in the past year.

Dr. Max Cooper,a physician who worked at Crozer,shared a poignant account of the hospital’s impact on the community:

I saw the daily miracles made possible by the amazing staff who walked these halls. I’ve seen hearts restarted, and gunshot victims resuscitated. This is a place where miracles have occurred, and where they should occur still. But prospect Medical Holdings ran this hospital into the ground. The day after we closed our trauma unit, we had a young man shot just a block from where we stand today. And he died 20 minutes into his 30-minute drive to Lankenau Hospital. If Crozer were open, we could have saved him. We’ve saved others just like him countless times before. We must prevent the next Crozer, and we must not let private equity raid pennsylvania’s hospitals.
Dr.Max Cooper

Peggy Malone, President of Crozer-Chester Nurses Association, echoed these sentiments, stating:

never did I think Crozer would feel so desolate. I knew the health system before Prospect came into our lives and created our nightmares. I can tell you, because I was here, we let the wolf in the door here in delaware County, and we can never, ever do that again. Governor Shapiro worked tirelessly behind the scenes to save our health system.The Pennsylvania Attorney General’s office took bold actions on behalf of our health system. The Delaware county delegation and Delaware County Council worked hand in hand with us every step of the way to stop corporate looters. Still, our health system closed – as that was always Prospect’s plan: to drain every last cent and every drop of blood from our health system before cutting and running back to California.
Peggy Malone, President of Crozer-Chester Nurses Association

The Health System Protection Act: A Legislative Solution?

The Health System Protection Act, introduced by Sen. Tim Kearney (D-Delaware) and Rep. Lisa Borowski (D-Delaware), aims to provide the Attorney General’s office with the tools needed to ensure qualified, experienced, and competent operators committed to providing and maintaining access to good, quality care are acting in good faith as they enter Pennsylvania’s healthcare marketplace. The legislation would:

• Ban sale-leaseback schemes that drain hospital resources by forcing them to sell their own facilities and rent them back at inflated rates.
• Empower the Office of Attorney General to review and, when necessary, block or place conditions on sales involving health care institutions and for-profit buyers.

Senator Kearney emphasized the need for the legislation, stating, Private equity is a cancer in our health system that is destroying our hospitals and driving up the prices of health services for all pennsylvanians, all while giving us worse service. It’s time that we have tools to prevent private equity from abusing our healthcare system. With the Governor’s support, I’m confident the legislature will move forward on meaningful reforms, including legislation recently introduced by members of the Delaware County Legislative Delegation in both the House and Senate.

Representative Borowski added, This is a pivotal moment for us as lawmakers elected by the people to represent their interest. How we choose to respond to the crisis private equity firms are inflicting in our healthcare system will speak volumes to Pennsylvanians about our courage to do what is right. I’m grateful to Governor Shapiro for speaking up and leading the charge. And it is not just Delco residents who depend on us to step up. This is happening in communities across the Commonwealth, creating swath of barren health care deserts, and my good friend Gina Curry knows a lot about that. This is our moment to show Pennsylvanians we won’t relent until we’ve done everything it takes to protect their access to health care.

rep. Leanne Krueger (D-Delaware) echoed these concerns, stating, Prospect closed our hospitals, and we certainly know this didn’t happen overnight. My colleagues and I have been here on the front lines with these nurses and doctors and paramedics for years fighting Prospect. Prospect has been divesting in our health care system for years while pulling out every bit of profit they could.

FAQ: Understanding the Healthcare Crisis in Pennsylvania

Why are hospitals closing in pennsylvania?

Hospital closures are often driven by financial pressures, including declining reimbursements, rising costs, and, in some cases, the involvement of private equity firms seeking to maximize profits.

What is the health System Protection Act?

The Health System Protection Act is proposed legislation that would give the Pennsylvania Attorney General more power to oversee and potentially block healthcare transactions involving for-profit entities.

How does private equity effect healthcare?

Private equity firms often acquire healthcare facilities with the goal of increasing profitability, which can lead to cost-cutting measures, service reductions, and even hospital closures.

What is the state doing to address the crisis?

The Shapiro Administration is working to support affected workers,maintain essential emergency services,and advocate for legislation to hold private equity firms accountable.