Private Equity’s Role in Healthcare Blasted

Senate report says Wall Street investors are putting medical system at risk

- Chris Cumming

A U.S. Senate committee accused private-equity health-care investors of choosing profits over patient care, adding a prominent voice to those claiming Wall Street is putting the medical system at risk.

The Senate Budget Committee’s bipartisan report, released on Tuesday, said private equity’s profit-minded management strategies are likely a bad fit for the health-care sector, and it questioned whether buyout firms should own hospitals.

The report stems from an investigation launched in 2023 by Sens. Sheldon Whitehouse, the Rhode Island Democrat and budget committee chairman, and Republican Chuck Grassley of Iowa, focusing on hospital investments of Leonard Green & Partners and Apollo Global Management, two prominent investment companies.

The investigation revealed that private equity is “putting their own profits over patients, leading to health and safety violations, chronic understaffing, and hospital closures,” Whitehouse said.

The 170-page report focuses on Prospect Medical Holdings, a formerly Leonard Green-owned hospital operator that recently ran into severe financial challenges, and Apollo-owned Lifepoint Health, which in 2022 faced a scandal over sexual abuse by a nurse at a hospital in Iowa.

In both cases, the Senate committee concluded the private-equity owners likely exacerbated the problems. The report was based on thousands of internal documents from the two companies, many of which were made public with the report.

"The findings of the investigation call into question the compatibility of private equity's profit-driven model with the essential role hospitals play in public health," the report said.