There are now at least 460 U.S. hospitals owned by private equity firms, with growing numbers in Southern states led by mega groups owned by firms like Apollo, according to updated figures from the Private Equity Stakeholder Project (PESP).
PESP is a nonprofit financial watchdog focused on following the impact of private equity investments, and it maintains the Private Equity Hospital Tracker, a list of all private equity-owned hospitals in the country.
Growth in private equity hospital ownership has been disproportionate in the South, with Apollo Global Management owning 224 hospitals between its acquisitions of Tennessee-based LifePoint and Kentucky-based ScionHealth. Other larger players include Equity Group Investments (Ardent Health Services), One Equity Partners (Ernest Health) and Bain Capital (Surgery Partners).
Private equity firms now own 8% of all private hospitals, with 26% serving rural populations
Texas has the most PE-owned hospitals with 97, more than triple any other state. While smaller in absolute terms, New Mexico and Wyoming had the highest proportion of private medical centers owned by private equity, with more than a third in each state having private equity backing.
PESP’s tracker data is based on CMS lists of Medicare-enrolled hospitals combined with news searches and the work of data provider Pitchbook, though it notes the difficulty of maintaining accurate information.
“[P]rivate equity firms often are allowed to operate behind closed doors. Limited regulation of hospital ownership, particularly of the predatory financial practices sometimes employed by private equity investors, makes accurate and up-to-date data on private equity in hospitals difficult to generate and maintain,” PESP states in its latest summary report, adding that firms typically own healthcare companies for just four to six years before reselling. “With PE firms increasing their acquisitions of healthcare companies in recent years, more disclosure is a necessary tool for regulators and healthcare advocates.”
In addition to transparency concerns, PE-owned hospitals have seen increasing scrutiny in recent years over care quality issues. Research published last month in JAMA, for example, showed private equity acquisition correlated with a 25% increase in hospital-acquired adverse events like falls or infections.
Read the full PESP report here.
Evan joined TriMed in 2011, writing primarily for Health Imaging. Prior to diving into medical journalism, Evan worked for the Nine Network of Public Media in St. Louis. He also has worked in public relations and education. Evan studied journalism at the University of Missouri, with an emphasis on broadcast media.