U.S. Senate Investigation Reveals Patients Suffer When Private Equity Investors Manage Hospitals

Voices for Affordable Health closely tracks news articles focused on private investor-owned hospitals and physician practices. So a recent story on HealthCareDive got our attention.

A year-long U.S. Senate inquiry into hospitals owned by private equity giants Apollo Global Management and Leonard Green & Partners concluded that they prioritized investors’ profits over patient and provider well-being.

The bipartisan investigation, led by Sen. Sheldon Whitehouse, D-R.I., and Sen. Chuck Grassley, R-Iowa, was released amid growing scrutiny of private equity’s role in health care. In general, private equity firms invest in companies with the goal to sell at a profit within three to five years. Recently, they’ve discovered health care is a lucrative business.

Today there are approximately 460 private equity-owned hospitals nationwide, according to a tracker maintained the watchdog group, Private Equity Shareholder Partnership Project.

Private equity firms have invested more than $1 trillion in health care, with a record year in 2021. However, a growing body of research finds private equity-owned hospitals have an increased number of patient falls, higher costs for patients and more employee turnover.

The senators were not pleased, but not necessarily surprised by their findings.

“As our investigation revealed, these financial entities are putting their own profits over patients, leading to health and safety violations, chronic understaffing and hospital closures,” Whitehouse said in a statement accompanying the report.

Have private investors recently purchased your local hospital or physician’s practice? Share your experience with Voices for Affordable Health.