One of them is Pamela Dorn. The lawsuit she filed against Prospect in 2024 has stalled, and it’ s now doubtful she’ ll ever be able to hold the company accountable for the negligent care she says it provided her husband.
Bob Dorn, 75, suffered from such severe dementia that he couldn’ t chew and was on a liquid diet. But when he became aggressive in March 2022 and was taken to Prospect’ s emergency room in Waterbury, Connecticut, the medical staff sedated him, then left him unattended with a meal of macaroni and cheese and broccoli, according to Dorn’ s lawsuit and an interview with her. Hospital staff later found her husband choking and struggling to breathe. He was intubated and taken to the intensive care unit but never regained consciousness. His death certificate said he died from asphyxia due to food blocking his airway.
“ I didn’ t want the same thing to happen to somebody else,” Dorn said, explaining why she filed the case.“ How a hospital system operates without malpractice insurance is beyond me. It’ s irresponsible.”( In court filings, attorneys for Prospect and the ER doctors have denied the negligence allegations.)
Compounding the shock for plaintiffs like Dorn, as well as former Prospect doctors and their lawyers, is that Prospect wasn’ t legally obligated to prove it could actually pay its malpractice costs.
Like a growing number of health care companies, Prospect had saved money by“ self-insuring” against these claims. Instead of paying premiums to a commercial insurer, the company pledged to pay directly for the legal defense of its facilities and doctors and to cover negotiated settlements or trial awards up to certain amounts— for many cases, up to $ 7.5 million.
States typically require commercial insurers to file audited statements showing they’ ve set aside sufficient funds for malpractice obligations and to contribute to a guaranty fund that pays a portion of claims if an insurer goes belly-up.
But there’ s little oversight— and no safety-net fund to tap— when companies self-insure. The problem has also surfaced in the bankruptcies of two other private-equity-backed health care companies, the Steward hospital chain and Genesis HealthCare, once the nation’ s largest nursing home company.( Genesis agreed to at least 155 malpractice settlements totalling $ 58 million but filed for bankruptcy before paying most plaintiffs, KFF Health News reported. The company denied wrongdoing.)
“ It seems like a gaping hole,” said Connecticut Rep. Cristin McCarthy Vahey, who co-chairs the state legislature’ s public health committee. She called Prospect’ s lack of coverage“ awful, devastating and infuriating. … What has happened with Prospect is like peeling an onion. The more we peel, the more we cry.”
In emailed responses to questions from ProPublica, insurance regulators in Connecticut, Rhode Island and Pennsylvania said they are troubled by the harm caused by Prospect’ s failure to fund malpractice coverage, a problem they hadn’ t encountered before. All said they have limited authority to regulate companies that self-insure.
In Connecticut, where Prospect owned three hospitals, a
54 The Trial Lawyer spokesperson for the insurance department wrote that state law allows health systems“ to meet malpractice obligations through self-insured options” and the agency has no responsibility for“ solvency oversight.” Prospect also owned insurance subsidiaries that provided some coverage for its hospitals. But they were headquartered in Vermont and offshore, in the Cayman Islands— which is legal but puts them beyond Pennsylvania’ s reach, a spokesperson for the state’ s insurance department said.
Rhode Island requires hospital companies to receive formal approval to self-insure and to submit financial information annually to regulators, but a spokesperson for the state Department of Business Regulation acknowledged Prospect had filed no such documents since 2019, despite self-insuring until 2025 when it filed for bankruptcy. Agency records show the state has taken no action against the company.( Open investigations are confidential, and the spokesperson said he could not comment on whether one is underway.)
Connecticut plaintiff attorney Mike D’ Amico, who represents Dorn, has been handling malpractice cases for four decades. The Prospect situation is“ a disaster” and“ something I’ ve never seen before,” he said.“ You have a lot of people that have been harmed by negligent conduct that have no recourse.”
Prospect, which ProPublica reported on in 2020, has become a case study on the public harms that can stem from private equity’ s growing involvement in health care. In the decade after Leonard Green & Partners bought majority control of Prospect in 2010, the firm and the company’ s founders, Sam Lee and David Topper, together extracted $ 658 million in fees and dividends for themselves and other investors, according to Securities and Exchange Commission filings and financial statements. This starved the business of money for staffing, maintenance and critical supplies while loading it up with debt.
Unable to find an outside buyer for the now financially decimated company, Leonard Green finally sold its majority stake back to Lee and Topper in 2021. Prospect’ s January 2025 bankruptcy filing came just four days after the release of a bipartisan U. S. Senate Budget Committee investigation into how private-equity ownership affects care. Titled“ Profits Over Patients,” the report offered a harsh verdict on Prospect, saying its“ primary focus was on financial goals rather than quality of care at their hospitals,” and that it had caused“ the collapse of critical health care services in the communities it served.” Prospect, which has denied any misconduct or negligent care, has now sold or closed all of its hospitals.
Leonard Green, which disputed the Senate report’ s conclusions, declined to respond to questions from ProPublica. Lee, estimated to have personally received $ 128 million from the company, could not be reached for comment; an attorney who previously represented him did not respond to a call and email. Topper, who received $ 94 million from Prospect through a family trust, responded to questions posed by a reporter in a brief phone conversation with“ no comment.”
Prospect’ s bankruptcy filing placed an automatic hold on more than 300 lawsuits filed against the company, seeking a total of more than $ 800 million in damages, according to bankruptcy court filings. Some of the malpractice cases awaiting