Private Equity Endangers Patients

May 4, 2025

Private equity in health care puts patients’ lives in danger, studies show
U.S. RIGHT TO KNOW
April 28, 2025
By Pamela Ferdinand

Private equity firms claim their investments in U.S. health care modernize operations and improve efficiency, helping to rescue failing healthcare systems and support practitioners. But recent studies build on mounting evidence that suggest these for-profit deals lead to more patient deaths and complications, among other adverse health outcomes.

Recent studies show private equity (PE) ownership across a wide range of medical sectors leads to: 

Poorer medical outcomes, including increased deaths, higher rates of complications, more hospital-acquired infections, and higher readmission rates.

Staffing problems, with frequent turnover and cuts to nursing staff or experienced physicians that can lead to shorter clinical visits and longer wait times, misdiagnoses, unnecessary care, and treatment delays.

Less access to care and higher prices, including the withdrawal of health care providers from rural and low-income areas, and the closure of unprofitable but essential services such as labor and delivery, psychiatric care, and trauma units.

Dr, Stephanie Woolhandler, a distinguished professor of public health at Hunter College and co-founder of Physicians for a National Health Program, isn’t surprised by the findings. 

“Private equity’s track record in health care is so consistently bad that regulators should ban new private equity purchases in the health sector and impose stringent oversight on the health resources private equity already owns,” she says.

A landmark review in The BMJ analyzed 55 studies across eight countries, primarily in the U.S. It detailed how PE ownership in health care was most often associated with higher costs to patient or payers and “mixed to harmful” impacts on quality of care.

Now, new peer-reviewed research reinforces these findings and reveals a troubling pattern, especially in the absence of effective regulation and oversight: Patients treated at PE-owned facilities, whose numbers have skyrocketed, continue to experience worse or mixed outcomes – from higher mortality rates to lower satisfaction – compared to those treated elsewhere.

In fact, no study to date has found significant improvements to health care quality, efficiency, costs, or access as a result of private equity’s entrance into health care, according to a March 2024 report from Stanford Law Review.

“The drive for quick revenue generation threatens to increase costs, lower health care quality and contribute to physician burnout and moral distress,” they say.

Another study, published last year (July 2024) in JAMA, found hospital assets decreased by 24% in the two years after private equity purchases, leaving facilities less equipped to care for patients. The loss of land, buildings, major hospital equipment, and information technology – equivalent to $28 million in total assets per hospital – means fewer resources for effective patient care, experts say. 

“It’s a very striking finding and should change the way people think about private equity in hospitals. The PE firms say, ‘We bring new capital into hospitals.’ It turns out that’s not quite true,” Woolhandler, a co-author of the study, told NBC News. “There are real dangers to the health care that people get if you deplete all of the capital from a hospital.”

 

Comment by: Don McCanne

To achieve affordable, high quality health care for everyone, the need for single payer has been recognized for decades. Our failure to act has resulted in an intolerable expansion of wasteful expenses without solving the problems of impaired access and individual financial hardship.

In recent years, the menace of private equity has crept into our health care system, greatly compounding its high costs and dysfunction. The “U.S. RIGHT TO KNOW” article convincingly demonstrates this.

Three years ago we wrote an article in The Nation explaining that mere enactment and implementation of a single payer Medicare for All program would no longer be satisfactory because entrepreneurial interests had gained too much control through provider ownership: insurance reform would no longer be enough to ensure that everyone would have access to affordable, comprehensive, high quality health care. We still need single payer, but we must also address ownership of the health care delivery system. We must agree that the system belongs to all of us — community-ownership of hospitals, clinics, and other health care resources.

What have we accomplished in the last three years? Incremental changes have had a negligible impact, allowing the status of our health care system to deteriorate even more. If we continue with our inertia, things can only get worse since private equity is a one-way street in the wrong direction.

You saw the images of the Medicare for All signs at the huge Sanders-AOC rallies. It’s time! Citizen action now!