Private equity-owned healthcare systems are going bankrupt at unprecedented rates. It will only get worse under a second Trump administration.
Private equity investors spent $1 trillion in health care acquisitions over the past decade. The result is increased health care costs, poorer quality of care, and decreased access. [1],[2] Rural communities are particularly hard hit.
The intrusion of private equity in our health care system affects all parts of the health care system.
At least 386 hospitals are now owned by private equity – 30% of US for-profit hospitals.[3] More than 40% of hospital emergency are now owned by private equity investors.[4] More than 5% of nursing homes, approximately 15,000 throughout the US, are owned by private equity with that number accelerating in 2024.[5][6]
In 2023 alone, seventeen large healthcare companies filed for Chapter 11 bankruptcy. That trend accelerated in 2024.[7],[8],[9]
How does this happen? Private equity investors engage in predatory, yet legal, strategies to strip assets and financial resources from their health care acquisitions.[10],[11]
Private equity investors rely heavy on loans for “leveraged buyouts.” This debt is then shifted from the investors to the acquired provider. The health care system must then pay down that debt – not the investors.
The acquired health care systems are then saddled with exorbitant “management fees” that is paid to the investors. The “management fees” and debt load result in understaffing and lack of patient care resources.
Another strategy is to sell the health care organization’s land, facilities, and other capital assets to other investors Health care organizations and then rent those assets back from the new owners.[12]
The net result is understaffed, under-resourced health care facilities where patients receive substandard care. Nursing home closures, frequently without advance notice to patients or their families, cause untold harm to vulnerable seniors.
Atrium Health and Senior living is reflective of the carnage being wrought in the nursing home industry.[13]
Seniors were abruptly removed from Atrium’s Weston, Wisconsin facility when they were woken up and told they were moving. Residents were moved in frigid weather, many without coats. The Centers for Medicare and Medicaid Services found that the residents were put in “immediate jeopardy.”[14]
No one from the nursing home contacted their families. Closure of Atrium’s other care homes followed.
Atrium’s owners paid themselves more than $37 million over the three years leading to its collapse. No investor or asset manager has one to prison.
Project 2025, Trump’s playbook, fails to prioritize the health and well-being of all Americans. Trump plans include deregulation of health care, defund patient protection programs, and further accelerate private equity ownership of the health care system.[15]
The only question is whether the electorate will participate in the demise of its own health care system by re-electing Trump.
It is a future that the American people can ill afford.
[1] What Happens When Private Equity Takes Over a Hospital
[2] Private Equity Investments in Health Care May Increase Costs and Degrade Quality
[3] The rising danger of private equity in healthcare
[4] Senate investigating whether ER care has been harmed by growing role of private-equity firms
[5] Private Equity Impacts On Health Care: Federal and State Legislative and Regulatory Actions, Will It Matter?
[6] As investors pour in, for-profit nursing homes leave some seniors in need
[7] Private equity healthcare bankruptcies show no signs of slowing
[8] Private equity is bankrupting American healthcare firms—literally
[9] Private equity portfolio company bankruptcies maintain record pace
[10] Predatory Private Equity Practices Threaten Americans’ Health and the Economy
[11] Private Equity Promised to Revolutionize Health Care. Is It Making Things Worse?
[12] Private Equity’s Role in Health Care
[13] ‘They Were Traumatized’: How a Private Equity-Associated Lender Helped Precipitate a Nursing-Home Implosion
[14] Summary Statement of Deficiencies – Atrium Post Acute Care of Weston. Centers for Medicare & Medicaid Services.
[15] Project 2025 Could Become a ‘Political Reality That Would Upend Medical Practice’
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