Bipartisan US Senate investigation exposes harms of private equity hospital ownership

On January 7, the US Senate Budget Committee released the findings of a year-long investigation of private equity ownership of hospitals. The bipartisan effort was led by Senate Budget Committee Chairman Sheldon Whitehouse (D-RI) and Ranking Member Charles E. Grassley (R-IA).

The report, titled “Profits Over Patients: The Harmful Effects of Private Equity on the U.S. Health Care System,” documents a harrowing pattern of private equity firms prioritizing profits at the expense of patient care and calls for greater oversight to address those harms.

Case studies examine two private equity-owned hospital companies: Prospect Medical Holdings, which was owned by Leonard Green & Partners between 2010-2021, and Lifepoint Health, which has been owned by Apollo Global Management since 2018.

As part of the investigation the Committee reviewed over a million pages of documents related to the two companies, including emails, meeting minutes, financial statements, and loan agreements.

The investigation also substantially relies on research by Private Equity Stakeholder Project (PESP), including research reports on Prospect and Lifepoint as well as our Private Equity Hospital Tracker, which the report cites as one of the only publicly available sources tracking private equity hospital ownership.

Key findings on Prospect Medical Holdings (Leonard Green & Partners):

• Leonard Green “wielded substantial influence” over Prospect’s financial decisions and incentivized its management to satisfy the private equity firm’s financial goals regardless of patient outcomes.[i]
• Leonard Green and Prospect’s “primary focus was on financial goals rather than quality of care at their hospitals, leading to multiple health and safety violations as well as understaffing and the closure of several hospitals.”[ii]
• Despite the “financial and operational mismanagement” of Prospect hospitals, Leonard Green collected $424 million of the $645 million in dividends and preferred stock redemption that Prospect paid out to its ownership group, as well as an additional $13 million in fees, which left the hospitals in “severe financial distress.”[iii]

Key findings on Lifepoint Health (Apollo Global Management):

• The Committee’s investigation of Apollo-owned Lifepoint focused on Ottumwa Regional Health Center (ORHC) in Iowa.
• Lifepoint and OHRC’s operating companies failed to fulfill at least seven promises, including legally binding ones, made to the hospital. These include failures related to capital commitments, patient satisfaction, and provision of charity care.
• Underinvestment by Apollo, Lifepoint, and ORHC’s previous private equity owners “has resulted in declining conditions and quality of care that allowed egregious events to occur.”[iv]
• As ORHC’s financial status and quality of care declined, Apollo “received benefits to the tune of millions of dollars annually from its fund’s investment in Lifepoint Health and its predecessors.”[v] This includes annual management fees and transaction fees that Apollo extracts from Lifepoint. The report states that “Apollo refused to provide Committee staff with exactly how much money it has made in relation to its funds’ investment into Lifepoint Health.”[vi]

The report concludes:

“In sum, the findings of the investigation call into question the compatibility of private equity’s profit-driven model with the essential role hospitals play in public health. The consequences of this ownership model—reduced services, compromised patient care, and even complete hospital closures—potentially pose a threat to the nation’s health care infrastructure, particularly in underserved and rural areas. This Report serves as a call to action for greater oversight, transparency, and reforms to ensure that PE-driven financial strategies in health care do not come at the expense of patient well-being or the sustainability of critical hospital services. The American public deserves more when it comes to health care.” [vii]

PESP has been sounding the alarm on private equity mismanagement at Prospect and Lifepoint hospitals for several years through research and reports that document a pattern of extractive financial policies at the expense of patient care. Beginning in 2020 PESP has also written letters to state attorneys general, submitted state and federal testimonies, provided public comment to institutional investors, and worked with unions and grassroots community organizations to elevate these issues.

See below for a selection of relevant PESP reports:

LifePoint Health:

• Apollo’s Stranglehold on Hospitals Harms Patients and Healthcare Workers(coauthored with AFT and IAM, January 2024)
• Apollo Global Management Completes Merger of Kindred Healthcare and LifePoint Health, Shifts Some Hospitals to New Company(January 2022)
• Private Equity Firms Reap Payouts After Hospital Chain Received $1.6 Billion in CARES Act Support(September 2021)

Prospect Medical Holdings:

• How Private Equity Raided Safety Net Hospitals and Left Communities Holding the Bag(November 2022)
• UPDATE: Leonard Green-led ownership collected $658 million from safety-net hospital company despite challenges, commitment to regulators to forgo dividends (June 2020)
• Raiding the Safety Net: Leonard Green & Partners Seeks to Walk Away from Prospect Medical Holdings after Collecting $570 Million in Fees and Dividends (February 2020)

Private Equity Hospital Tracker

Private Equity Descends on Rural Healthcare (January 2023)

[i] “Profits Over Patients: The Harmful Effects of Private Equity on the U.S. Health Care System.” Senate Budget Committee Bipartisan Staff Report, January 2025, 118th Congress. Pg. iii.

[ii] “Profits Over Patients.” Pg. iii.

[iii] “Profits Over Patients.” Pg. iv.

[iv] “Profits Over Patients.” Pg. v.

[v] “Profits Over Patients.” Pg. v.

[vi] “Profits Over Patients.” Pg. v.

[vii] “Profits Over Patients.” Pg. 161-162.