The Private Equity Stakeholder Project (PESP) is releasing a first-of-its-kind data project to track the insurgence of private equity (PE) ownership of our nation’s hospitals. The new PESP Private Equity Hospital Tracker provides a current and refreshed list of all private equity-owned hospitals in the U.S.
The data surrounding PE ownership of hospitals is staggering. The PESP Tracker found that at least 386 US hospitals are owned by private equity firms, which represents 30 percent of all proprietary for-profit hospitals. Over a third (34 percent) of private equity-owned hospitals serve rural populations.
The consequences of this type of hospital ownership have been borne mostly by healthcare workers and the communities they serve. Private equity’s hospital profiteering has resulted in dangerous conditions, closures, reduced access to services, declining quality, and fraud. Even still, private 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. With PE firms increasing their acquisitions of healthcare companies in recent years, more disclosure is a necessary tool for regulators and healthcare advocates.
The PESP Private Equity Hospital Tracker aims to provide that transparency and be an accurate, up-to-date, and accessible tool to unveil the extent of private equity hospital ownership. The Hospital Tracker consists of a user-friendly database that provides any reader with a sortable and searchable list of U.S. hospitals and their ownership companies. Additionally, the Tracker contains an interactive map of all PE-owned hospitals, as well as density data of hospitals per state.
In all, two U.S. states stand out among the rest with regard to PE's penetration into hospital systems. By raw totals, Texas ranks the highest in the number of private equity-owned hospitals with 85 in the state. However, New Mexico actually has the highest proportion of private equity-owned hospitals, with just under half being PE-owned. A small number of firms dominate the list of private equity-owned hospitals, but by far the largest private equity owner of hospitals is Apollo Global Management through its two hospital chains LifePoint Health and ScionHealth.
The private equity business model, which is characterized by the pursuit of outsized profits over short periods of time and a reliance on high levels of debt, is in many ways incompatible with providing quality, affordable healthcare. The PESP Private Equity Hospital Tracker serves as an important tool in ensuring the public has necessary transparency about the ownership structures of their local hospitals.