Bad financial deals aren’t helping Pennsylvania hospitals that are already struggling with Medicaid funding cuts, writes Noah Zucker for Bisnow.
About 37 percent of Pennsylvania hospitals now run at a loss. It’s expected that 12 to 14 Pennsylvania hospitals will close in the next five years.
Financial strategies like aggressive cost-cutting and sale-leaseback agreements used by private equity firms like Prospect Medical Holdings, owners of Crozer Health, only make the situation worse.
State and federal officials are now targeting harmful financial deals, like private equity acquisitions and sale-leasebacks with REITs, to help hospitals stay open.
“We know that in order to have communities where businesses want to come to, where families can grow and live, we need to have strong hospitals,” said Liam Migdail, Healthsystem Association of Pennsylvania Vice President of Strategic Communications.
Prospect’s January 2025 bankruptcy became a flashpoint.
In 2019, Prospect sold Crozer Hospital properties to a real estate investment trust for $1.5 billion, then leased them back.
Rent obligations became another fixed cost, contributing to Crozer Health’s shutdown. That left emergency care gaps in Delaware County.
In response, lawmakers have proposed legislation that would require tighter oversight of private equity acquisitions and hospital real estate transactions.
Read more details about what’s causing Pennsylvania hospitals to struggle in Bisnow.
Editor’s Note: This post was originally published on DELCO Today in February 2026.
