Why CT lawmakers want to restrict private equity in hospitals. ‘We can’t let this happen again’

Hartford Courant – Wednesday, January 14, 2026
By Livi Stanford

The state’s Public Health Committee plans to reintroduce legislation in the upcoming session next month that would restrict private equity from managing the core function of hospitals.

It follows Prospect Medical Holdings’ management of several hospitals in the state. Lawmakers failed to pass legislation last session on the issue.

The alleged impact of private equity in health care has been seen in Connecticut as Prospect Medical Holdings, a private equity company, filed for Chapter 11 bankruptcy last year. Several lawmakers have said they believe Prospect drained profits from several hospitals it owned in the state at the expense of patient care.

Prospect Medical Holdings did not return emails seeking comment on the issue.

Senate President Pro Tem Martin M. Looney, D-New Haven, said the need for reform and restriction of private equity ownership in health care is sorely needed following Prospect’s ownership of Waterbury, Rockville General and Manchester Memorial hospitals.

Looney referred to Prospect’s ownership of the hospitals as a disaster, harming the hospitals, siphoning profits out of it, and undermining care, which he added highlights the “grave dangers of having an entity with a profit motive rather than a health care motive running hospitals that people depend on for lifesaving care.”

Prospect owned Manchester Memorial, Rockville General and Waterbury hospitals. The hospitals struggled over the years under private equity with inadequate staffing and antiquated equipment. Health giant Hartford HealthCare has since purchased Manchester Memorial and Rockville General.

The state Department of Public Health fined Waterbury Hospital $60,000 for violations of state law in 2024 and instituted an independent monitor at the hospital. DPH inspected the state’s Prospect hospitals over the years, citing both Waterbury and Manchester for patient issues and Waterbury for medication errors. Prospect owes $64.4 million to the state for hospital provider taxes for Waterbury Hospital, as well as $22 million to the city for property taxes, officials have said. Suppliers have also claimed unpaid debts.

The state Office of Health Strategy’s latest Annual Report on the Financial Status of Connecticut’s Short Term Acute Hospitals found that Prospect lost $86.4 million in fiscal year 2023.

State Sen. Saud Anwar, co-chair of the state’s Public Health Committee, said the hope with reintroducing the legislation is that an entity like Prospect would not come back to the state.

“We know that private equity has harmed health care whether it is in the form of taking hospitals or nursing homes,” he said. “We know the quality of care gets worse if private equity owns a hospital. We want to make sure that the patient remains in the center of care and that should be the primary and main focus of our health care in our state. Private equity cannot interfere with the care that the patients need.”

Hartford HealthCare purchased Manchester and Rockville hospitals on Jan. 1 for $86.1 million and UConn Health formally submitted a bid for $13 million for Waterbury Hospital. UConn Health is awaiting state approval of the purchase from the state’s Office of Health Strategy.

U.S. Sen. Chris Murphy, a member of the Health, Education, Labor and Pensions Committee also has spoken on the negative impact of private equity’s impact on health care. Last summer he issued a report: “A Dangerous Prospect: How Private Equity Decimated Connecticut Hospitals,” finding that Prospect Medical “employed a ‘buy, strip, flip’ strategy in which they sold off assets while gutting staff and services, prioritized investor payout and short-term profits over patient outcomes and degraded the safety and quality of care for vulnerable communities without the financial means to fight back,” according to information released from Murphy’s office.

Key findings of the report found that Prospect stopped “paying vendors for essential supplies, resulting in patients being treated with loose IV cords, rusted stretchers with broken brakes and faulty equipment for transport,” according to the report.

“Additionally Prospect cut staff, no longer ensuring that a doctor would be available on overnight shifts, putting patients with serious complications such as heart arrhythmia or collapsed lungs at greater risk” the report stated further.

Sen. Jeff Gordon, R-Woodstock, said he has been advocating for several years for restricting private equity in hospitals through the Public Health Committee.

“It is needed because we have seen private equity destroy other hospital systems in other states including in Massachusetts in a far worse way than Prospect did and we saw that unfold in real time,” he said.

Gordon said as a physician he understands hospital systems and patient care.

“State government did not do anything and let Prospect do what it was doing and get to this very bad point,” he said. “Given the terrible track record that Prospect and private equity has, including a bipartisan congressional report highlighting this nationally, how can we at all let for profit private equity get back into anything with a hospital in Connecticut when we have clearly seen how terrible it was with these hospitals being destroyed financially. Patient care suffered. We can’t let this happen again.”

Gordon said the legislation did not get passed last year because a lot of special interests were opposing it and it did not have the full support from the governor.

“Now we have political will to fix this issue once and for all and are going to push that and lead the charge on it,” he said. “I wish state government had been paying attention and fixed this previously.”

Gordon said he believes some Republican colleagues are in support of it.

“There is a concern about what to do to not let hospitals suffer this again,” he said. “I have not heard from anybody, Democrat or Republican that they want to do nothing.”

Gordon said he is proposing legislation to outright ban or severely restrict private equity from having any ownership or private stake in a hospital in Connecticut.

“This is part of my effort to put patients over profits,” he said.

David Bednarz, spokesman for the governor, said the governor is still in the process of reviewing what legislation to propose during the next session.

The Connecticut Hospital Association said it recognized that unregulated private equity investments have in certain situations led to negative outcomes in Connecticut, neighboring states and across the country.

“We support balanced measures to ensure investments are transparent and to prevent future situations in which a hospital’s financial stability could be compromised by interests that do not align with the needs of the community it serves,” the CHA said. “Any solution must be carefully crafted to avoid unintended consequences such as discouraging modest yet important investments that can support and sustain health care delivery in Connecticut.”

State Rep. Cristin McCarthy Vahey D-Fairfield, and co-chair of the Public Health Committee, said the committee needs to “in some places look to ban” private equity in certain settings and other places look at how the state reviews those transactions and protects patients in places where they are being utilized for innovation and specific purposes.

Senate Republican leader Stephen Harding of Brookfield said there is no consensus from the Republican caucus on restricting private equity at this time. He said he is not opposed to it but would like more information on data on how banning private equity has helped aid hospitals and patients.

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