The two leaders of the Senate Budget Committee on Thursday launched a bipartisan investigation into private equity ownership of hospitals in the United States, citing concerns that such arrangements are bad for both health care providers and patients.
“As private equity has moved into health care, we have become increasingly concerned about the associated negative outcomes for patients,” said Chairman Sheldon Whitehouse (D-R.I.) in a statement. “From facility closures to compromised care, it’s now a familiar story: private equity buys out a hospital, saddles it with debt, and then reduces operating costs by cutting services and staff — all while investors pocket millions. Before the dust settles, the private equity firm sells and leaves town, leaving communities to pick up the pieces.”
The panel’s ranking member, Sen. Chuck Grassley, had previously opened a probe into hospitals in his home state of Iowa in March 2023, focusing on Ottumwa Regional Health Center, where a nurse practitioner who later died of an overdose sexually assaulted nine patients while they were asleep or sedated. In the new investigation, the Republican reiterated previous questions that had gone unanswered in his original inquiry to private equity firm Apollo Global Management, which owns LifePoint Health, the parent company of the Ottumwa hospital.
The renewed investigation also expands the focus to private equity firm Leonard Green & Partners, which acquired safety net hospital operator Prospect Medical Holdings in 2010, and Medical Properties Trust, a real estate investment trust involved with several different private equity firms, including Apollo.
The investigation also now encompasses hospitals in Whitehouse’s home state of Rhode Island, including the Our Lady of Fatima and Roger Williams hospitals that are the focus of a recent Rhode Island attorney general lawsuit, and hospitals in California, Pennsylvania, and more.
Previous research has shown that private equity ownership jacks up the cost of medical care and stacks debt on hospitals, creating an environment where 9 of 10 hospitals in financial distress are owned by private equity.
A 2022 STAT investigation showed that private equity firm Welsh, Carson, Anderson & Stowe ruthlessly chased profits by exploiting loopholes and government programs in niche areas of the health care industry. Welsh Carson is currently the target of a FTC investigation alleging it created a monopoly in the anesthesia market in Texas.