Crain’s Chicago Business op-ed: Safety net hospitals

For years, experts have warned of the state of safety-net hospitals in Chicago. Faced with a lack of direct public investment and unstable revenue streams, safety-net hospitals are crumbling under the pressures of America’s faltering health care system and leaving underserved communities with even fewer options. As such hospitals continue to degrade, one industry threatens to fray the safety net further: private equity.

While the private equity industry has claimed its interest in American health care is for the greater good, the shuttered hospitals it’s left in its wake tell a different story. Since 2018, private equity-related financial distress has contributed to the closures of at least 22 hospitals across the U.S., including at least 10 safety-net hospitals. In 2024, private equity was linked to seven of the eight largest health care-related bankruptcies that year, including the flameout of safety-net hospital system Steward Health Care.

The extractive financial engineering employed by private equity firms has stripped some safety-net hospitals to the bone, leaving them vulnerable to collapse. Under the aegis of Cerberus Capital Management, Steward sold its Massachusetts real estate to hospital landlord Medical Properties Trust, generating $1.2 billion for investors and leaving those hospitals responsible for millions of dollars in rent. As majority owner of Prospect Medical Holdings, Leonard Green & Partners loaded the hospital system with hundreds of millions of dollars of debt, using it in part to pay itself about $658 million in dividends and fees from 2011 to 2019. Meanwhile, in 2019, health inspectors cited two Prospect hospitals in Connecticut for conditions that placed patients in “immediate jeopardy.” A damning bipartisan Senate report later concluded that Leonard Green and Prospect’s primary focus was on financial goals rather than quality of care.

Cerberus and Leonard Green exited their investments in Steward and Prospect in 2020 and 2021, respectively. Just a few years after their private equity owners sold their stakes in the hospital systems, Steward declared bankruptcy in 2024 and Prospect declared bankruptcy in 2025.

Chicago, too, has seen its own safety-net hospital closures in the wake of private equity ownership. Pipeline Health, a private equity-backed hospital chain, purchased three hospitals in the Chicago area. In 2022, Pipeline sold Weiss Memorial Hospital’s parking lot to a developer for $12 million, although the move drew community protest. When Pipeline sold Weiss Memorial and West Suburban Medical Center to Resilience Healthcare, it valued the hospitals’ property at $92 million and its operations at just $1. Resilience took on $89 million in debt to finance the acquisitions, $67 million of which was lent by Pipeline, which Resilience failed to pay last year. Two of the three safety-net hospitals once owned by Pipeline are now closed, and the third, West Suburban, now faces an uncertain future.

Each of these cases has had grim impacts. A Boston Globe investigation revealed multiple patients died after receiving care at Steward hospitals that were understaffed and inadequately equipped. Days after a former Prospect hospital in Pennsylvania closed, a mother seeking emergency care for her infant showed up to a shuttered ER. When a patient whose hand had been blown off by a firecracker sought treatment at Weiss last July, the hospital’s “makeshift” ER did not have a tourniquet or other basic supplies.

Health care is a human need, not a piggy bank for private equity. Yet profit-hungry investors are able to raid critical health care infrastructure and siphon out millions while patients, workers and communities pay the price. If we want to keep safety-net hospitals open, then legislators must act now to pass robust legislation that protects our critical health care infrastructure.