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PE-Owned Hospitals Paid Owners Millions and Got Low Care Ratings

  • Leonard Green borrowed for dividends of more than $500 million
  • Prospect Medical says has invested in hospitals, improved care

Source: Getty Images

In the years before coronavirus began stressing America’s health-care system, Leonard Green & Partners LP extracted more than half a billion dollars in debt-funded dividends from its hospital venture, Prospect Medical Holdings Inc.

It’s a common tactic for private equity firms like Leonard Green, and it was proving to be profitable in this case. But with hospitals enduring an unprecedented onslaught, the situation is renewing questions of whether private equity’s playbook conflicts with patient care.