Now, more than a year after the company filed for bankruptcy in January 2025, a new layer of harm has emerged: Prospect had promised to provide malpractice coverage for its hospitals and many of its doctors, but court filings show it set aside no money to pay those costs \u2014 or to compensate injured patients.\u00a0<\/p>\n
As a result, hundreds of people with pending malpractice cases against the company may never have a shot at meaningful redress.<\/p>\n
One of them is Pamela Dorn. The lawsuit she filed against Prospect in 2024 has stalled, and it\u2019s now doubtful she\u2019ll ever be able to hold the company accountable for the negligent care she says it provided her husband.\u00a0<\/p>\n
Bob Dorn, 75, suffered from such severe dementia that he couldn\u2019t chew and was on a liquid diet. But when he became aggressive in March 2022 and was taken to Prospect\u2019s 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\u2019s 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.<\/p>\n
![\"A](\"https:\/\/www.newsbeep.com\/uk\/wp-content\/uploads\/2026\/04\/20260404_Prospect_Dorn.jpg\")
Bob and Pamela Dorn in their kitchen in Connecticut in 2021, a year before his death Courtesy Pamela Dorn<\/p>\n
\u201cI didn\u2019t want the same thing to happen to somebody else,\u201d Dorn said, explaining why she filed the case. \u201cHow a hospital system operates without malpractice insurance is beyond me. It\u2019s irresponsible.\u201d (In court filings, attorneys for Prospect and the ER doctors have denied the negligence allegations.)\u00a0<\/p>\n
Compounding the shock for plaintiffs like Dorn, as well as former Prospect doctors and their lawyers, is that Prospect wasn\u2019t legally obligated to prove it could actually pay its malpractice costs.\u00a0<\/p>\n
Like a growing number of health care companies, Prospect had saved money by \u201cself-insuring\u201d 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 \u2014 for many cases, up to $7.5 million.\u00a0<\/p>\n
States typically require commercial insurers to file audited statements showing they\u2019ve 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.\u00a0<\/p>\n
But there\u2019s little oversight \u2014 and no safety-net fund to tap \u2014 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<\/a>, once the nation\u2019s 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.)<\/p>\n \u201cIt seems like a gaping hole,\u201d said Connecticut Rep. Cristin McCarthy Vahey, who co-chairs the state legislature\u2019s public health committee. She called Prospect\u2019s lack of coverage \u201cawful, devastating and infuriating. \u2026 What has happened with Prospect is like peeling an onion. The more we peel, the more we cry.\u201d<\/p>\n 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\u2019s failure to fund malpractice coverage, a problem they hadn\u2019t encountered before. All said they have limited authority to regulate companies that self-insure.\u00a0<\/p>\n In Connecticut, where Prospect owned three hospitals, a spokesperson for the insurance department wrote that state law allows health systems \u201cto meet malpractice obligations through self-insured options\u201d and the agency has no responsibility for \u201csolvency oversight.\u201d Prospect also owned insurance subsidiaries that provided some coverage for its hospitals. But they were headquartered in Vermont and offshore, in the Cayman Islands \u2014 which is legal but puts them beyond Pennsylvania\u2019s reach, a spokesperson for the state\u2019s insurance department said.<\/p>\n Rhode Island requires<\/a> 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.)\u00a0<\/p>\n Connecticut plaintiff attorney Mike D\u2019Amico, who represents Dorn, has been handling malpractice cases for four decades. The Prospect situation is \u201ca disaster\u201d and \u201csomething I\u2019ve never seen before,\u201d he said. \u201cYou have a lot of people that have been harmed by negligent conduct that have no recourse.\u201d\u00a0<\/p>\n Prospect, which ProPublica reported on in 2020<\/a>, has become a case study on the public harms that can stem from private equity\u2019s growing involvement in health care. In the decade after Leonard Green & Partners bought majority control of Prospect in 2010, the firm and the company\u2019s founders, Sam Lee and David Topper, together extracted $658 million in fees and dividends<\/a> 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.\u00a0<\/p>\n 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\u2019s 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 \u201cProfits Over Patients<\/a>,\u201d the report offered a harsh verdict on Prospect, saying its \u201cprimary focus was on financial goals rather than quality of care at their hospitals,\u201d and that it had caused \u201cthe collapse of critical health care services in the communities it served.\u201d Prospect, which has denied any misconduct or negligent care, has now sold or closed all of its hospitals.<\/p>\n Leonard Green, which disputed the Senate report\u2019s conclusions, declined\u00a0 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 \u201cno comment.\u201d\u00a0<\/p>\n Prospect\u2019s 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 resolution were near settlement or scheduled to go to trial when the hold began. Many alleged egregious harms, including wrongful deaths or debilitating injuries requiring costly care.<\/p>\n The widower of a 39-year-old physician sued the company in state court in Hartford, Connecticut, in 2022, alleging his wife died from negligent care following an emergency cesarean section at the Prospect hospital where she worked. Parents of a 10-month-old boy filed suit in state court in Philadelphia in 2023, claiming he\u2019d required multiple operations (and eventually removal of his esophagus) after ER doctors failed to conduct tests revealing that he\u2019d swallowed a button battery. A 2019 Pennsylvania case claimed a man\u2019s bowel was perforated during a hernia repair, triggering life-threatening complications that required five more surgeries. In court filings in each of these cases, Prospect, its hospitals and its doctors denied the allegations of malpractice, negligence or wrongful death.<\/p>\n The insurance chaos began to surface in late October, after the Texas judge presiding over Prospect\u2019s bankruptcy lifted the initial litigation hold. Her move followed failed efforts to persuade private insurers responsible for covering awards in excess of what Prospect\u2019s self-insurance provided to kick in money for mediated settlements. The private insurers\u2019 reasoning, according to bankruptcy court filings: their \u201creinsurance\u201d contracts required them to pay only in cases where Prospect had already paid its entire share, similar to an auto insurance deductible.<\/p>\n In Connecticut and Rhode Island, Prospect had promised to pay $7.5 million for each lawsuit before any outside coverage kicked in. In Pennsylvania, Prospect relied on another form of self-insurance: a Vermont-based insurance subsidiary. That business was supposed to pay the first $500,000 of Pennsylvania malpractice costs, but it appears Prospect underfunded the subsidiary. (By exactly how much remains unclear.) Complicating matters further: For Pennsylvania cases filed after October 2020, the subsidiary wasn\u2019t required to contribute until after Prospect had covered the first $250,000.<\/p>\n There are similar problems in California, where Prospect sold its six hospitals in the bankruptcy proceedings to a new for-profit company. Los Angeles attorney Judith Tishkoff, whose firm has represented Prospect for years, last week filed to withdraw from seven malpractice cases, saying Prospect\u2019s general counsel has told her there is no insurance coverage and no money to pay any defense costs or legal fees.<\/p>\n Even those who win court awards or settlements against Prospect seem destined to be treated as unsecured claims in the company\u2019s bankruptcy. Like vendors with unpaid bills for hospital linens and bandages, they\u2019re likely to receive just pennies on the dollar, bankruptcy lawyers told ProPublica. Some plaintiffs lawyers, who get paid on a contingency basis, say they\u2019re declining to take on new malpractice cases involving Prospect, given the difficulty of obtaining any recovery.\u00a0<\/p>\n Pennsylvania attorney Leonard Sloane is among them. \u201cIt\u2019s a gamble to take on a new case,\u201d said Sloane. \u201cTo pursue one of these claims is very expensive. There\u2019s gotta be something at the end, otherwise what\u2019s the sense of pursuing on behalf of a client who gets nothing?\u201d Sloane represents the survivors of a 67-year-old woman who died in 2022 after a Prospect surgeon performing a partial lung removal mistakenly cut a pulmonary vein, leading to a cascade of complications. The doctor acknowledged in medical records that he\u2019d made \u201ca technical mistake,\u201d but the lawyer representing him and Prospect has moved to throw out claims for punitive damages, denying his actions met the legal standard of \u201crecklessness.\u201d Sloane, who has been practicing for 50 years, believes the family\u2019s case is strong, \u201cbut if there\u2019s no coverage, that\u2019s the end.\u201d<\/p>\n Prospect promised the doctors it employed malpractice coverage, but those facing lawsuits have learned they may have to foot hundreds of thousands in legal costs personally, plus any settlements or court awards.<\/p>\n Dr. John Horan, 69, is a family physician in Rhode Island who has been practicing medicine for 41 years. He sold his practice to Prospect in 2016 and worked for the company until 2022. That year, the family of a patient who died filed a lawsuit blaming him for failing to diagnose her lung cancer. Horan denies he\u2019s at fault. In December 2025, Horan\u2019s lawyer told him Prospect was refusing to defend him or pay any of his costs. \u201cI was nauseous for the next month,\u201d he told ProPublica. Horan and his wife have met with a bankruptcy lawyer.<\/p>\n Paul Galamaga, Horan\u2019s defense attorney, said he was handling 10 Prospect-related cases in Rhode Island when the company filed for bankruptcy. Prospect owes him about $183,000. He\u2019s won court approval to withdraw from seven of the lawsuits but continues to represent Horan and two other physicians, who he says will now have to pay him personally. \u201cThere\u2019s no money to pay me or defend any of the doctors,\u201d Galamaga said.<\/p>\n Some defense lawyers have sought to reimpose a freeze on proceedings, citing the uncertainty about Prospect\u2019s ability to pay. In Pennsylvania, attorney Ben Post, whose firm is listed in court filings as defense counsel in 16 Prospect malpractice lawsuits, filed motions late last year seeking to clamp a stay on several malpractice cases. If he didn\u2019t get it, he said, he\u2019d have \u201cno choice\u201d but to withdraw.\u00a0<\/p>\n In response to one such filing, plaintiffs attorney Francis Curran wrote that his 83-year-old client had been seeking redress for her husband\u2019s death for nine years. \u201cWith each additional delay,\u201d he said, \u201cit becomes less and less likely that Plaintiff will receive just compensation during her lifetime.\u201d (Although one of Post\u2019s stay requests has already been denied, a lawyer his firm has retained to help navigate the insurance uncertainty said Post has no immediate plans to withdraw from any cases.)<\/p>\n In February, the Rhode Island legislature approved an $18 million emergency loan guarantee to assure the long-delayed sale<\/a> of Prospect\u2019s two struggling Providence-area hospitals, Our Lady of Fatima and Roger Williams Medical Center, to a Georgia-based nonprofit. Rep. Charlene Lima took to the floor to talk about the risk to local physicians left without promised malpractice coverage, warning that it could force them into bankruptcy and worsen the shortage of primary care doctors in Rhode Island.\u00a0<\/p>\n \u201cThe state shares culpability in this situation,\u201d Lima said in an interview, adding that she\u2019d support regulations to ensure this doesn\u2019t happen again. \u201cWe weren\u2019t looking at this or regulating this. It\u2019s like nobody was watching the henhouse except the foxes maybe.\u201d\u00a0<\/p>\n The harms of porous insurance oversight have also surfaced in the bankruptcy of Steward Health Care, an even larger hospital chain bankrolled by private equity.\u00a0<\/p>\n Backed by giant Cerberus Capital Management in 2010, Steward grew to 37 hospitals<\/a> over a decade. In 2021, Cerberus exited the investment with a reported $800 million in profits, while Steward CEO Ralph de la Torre, a former heart surgeon who reaped more than $250 million<\/a> from the company, bought himself a $40 million yacht<\/a>. Three years later, Steward filed for bankruptcy<\/a>, owing hundreds of millions to vendors and employees<\/a> and facing accusations of fraud and abysmal patient care<\/a>.\u00a0<\/p>\n (Cerberus declined to respond to questions from ProPublica, instead pointing to a public statement<\/a> in which it said Steward\u2019s problems \u201cappear to be overwhelmingly related to the post-Cerberus ownership period.\u201d A spokesperson for de la Torre, who led the ownership group until he resigned in late 2024, said he \u201cfirmly disputes\u201d the allegations against him, \u201cincluding claims of greed and bad-faith misconduct,\u201d and intends to \u201cvigorously defend himself against them.\u201d)<\/p>\n