How did financial incentives overshadow Prospect Medical’s mission and standards?

Prospect Medical Holdings in 2020 consisted of 17 hospitals, clustered mostly in California and the northeastern United States. According to the firm’s website, it provides care to over 435,000 members in its networks, which comprise more than 11,000 medical professionals. Prospect’s business model focuses on providing care through health management organizations, hospitals, and networks of employed or independent practice physicians. Its mission statement states:

We are hospitals and affiliated medical groups working for the benefit of every person who comes to us for care. Our comprehensive networks aim to provide coordinated, personalized care.

Established in 1996, the company expanded into hospital ownership in 2007 with the acquisition of Alta Healthcare Systems, which transformed it from a business exclusively providing medical group management services to a provider of coordinated regional healthcare services.

The company posts the following standards on the Mission page of its website:

• Striving for the best possible patient outcomes

• Maintaining the highest standards of patient safety

• Acting with integrity at all times

• Promoting open communication

• Collaborating to better serve the healthcare needs of our communities However, in September 2020, ProPublica published an investigative report by Peter Elkind and Doris Burke that portrayed Prospect Medical in a different light (“Investors Extracted $400 Million From a Hospital Chain That Sometimes Couldn’t Pay for Medical Supplies or Gas for Ambulances”).

Prospect Medical was purchased by a private equity firm, Leonard Green &

Partners, in 2010, and in the next decade made huge profits for the owners while, according to the ProPublica investigation, providing questionable care for its patients. According to Elkind and Burke’s reporting, “Leonard Green extracted $400 million in dividends and fees” from the company, with two of the executives earning over $220 million during these ten years.