OrthoCarolina, one of the nation's largest independently owned orthopedic practices, is close to a deal to sell its physical therapy business to PT Solutions Physical Therapy, an Atlanta-based company backed by private equity. The pending sale is the latest example of private equity's growing presence in health care in North Carolina — a trend that has sparked opportunities for growth and concerns about the potential effects on patient care.
Bankrupt hospital chain Prospect Medical Holdings Inc. won court permission to start drawing from its $100 million Chapter 11 financing despite a challenge from landlord Medical Properties Trust Inc. Judge Stacey G.C. Jernigan said late Tuesday she'd authorized Prospect's request after company advisers testified that the hospital operator's cash dwindled to about $3 million before filing for protection on Jan. 11. MPT challenged the financing, saying it improperly puts the new debt ahead of its liens.
The company owes $400 million to vendors across its 16 safety-net hospitals in four states.
Bankrupt Prospect Medical Holdings did not pay vendors to provide basic medical supplies, and its hospital leaders in Rhode Island on Tuesday morning were forced to delay surgeries. Prospect, a national for-profit health care chain, owns and operates Roger Williams Medical Center in Providence and Our Lady of Fatima Hospital in North Providence, and filed bankruptcy late Saturday night. During the corporation’s first hearing in a Dallas courtroom, Prospect Chief Restructuring OfficerPaul Rundell said Tuesday afternoon that he spent his morning working with executives at the company's two Rhode Island hospitals to work out arrangements to pay vendors in advance.
A new study from Harvard Medical School is raising fresh concerns about hospitals controlled by private equity firms. Researchers found patient satisfaction dropped at hospitals that moved under private equity control, compared to hospitals that were not owned by such firms. In surveys reviewed by researchers, patients reported their experience worsened in the years after private equity takeovers. They also said hospital staff were less responsive to their concerns.
A Los Angeles-based company that owns more than a dozen hospitals in four states filed for bankruptcy late Saturday night, the second major system acquired by private equity to collapse in less than a year. In an initial filing seeking Chapter 11 protections, Prospect Medical Holdings, which owns facilities in California, Pennsylvania, Rhode Island, and Connecticut, listed debts of more than $400 million. In a press release announcing its restructuring, the company said it would continue to operate as normal.
Hospital operator Prospect Medical Holdings, a large tenant of the biggest hospital landlord in the U.S., is working with restructuring advisers to explore options to address its financial challenges, according to people familiar with the company. The closely held hospital chain with facilities in states including California, Pennsylvania, Rhode Island and Connecticut has struggled financially for years and recently skipped rent payments owed to landlord Medical Properties Trust, a publicly traded healthcare real-estate investment trust. Prospect faces pressure from regulators in several states over its financial troubles and the deteriorating conditions at its facilities.