Findings add to Senate investigation of Lifepoint Health’s PE owner
A new report from the Private Equity Stakeholder Project (PESP) reveals how private equity firm Apollo Global Management’s ownership of two major American hospital systems degrades services, hurts workers, and puts patients at grave risk.
The comprehensive study, “Apollo’s Stranglehold on Hospitals Harms Patients and Healthcare Workers,” produced in conjunction with the American Federation of Teachers (AFT) and the International Association of Machinists and Aerospace Workers (IAM), shows that since acquiring Lifepoint Health in 2018 and spinning off ScionHealth in 2021, Apollo has consolidated ownership of 220 hospitals in 36 states, with a workforce of approximately 75,000 employees. The hospitals have experienced cuts to services, layoffs, poor quality ratings, and regulatory investigations.
The report comes amidst rising scrutiny of private equity hospital ownership. Last month, the Senate Budget Committee launched a bipartisan investigation into private equity ownership of hospitals that specifically focuses on Apollo’s ownership of Lifepoint. Weeks later, a new study published in JAMA found an increase in adverse patient events at hospitals purchased by private equity firms.
“Apollo’s purchase of these hospital systems follows a disturbing pattern of harm caused by the growing influence of private equity in the healthcare sector,” said Eileen O’Grady, PESP Healthcare Director. “Private equity’s utmost priority to maximize short-term profit over the long-term viability of the companies it controls leads to excessive debt, cost cutting, worse outcomes for patients, and deteriorating working conditions for employees. Apollo’s management of its hospitals seems to follow the usual playbook. PESP will continue to advocate for greater regulations on private equity in order to blunt its onslaught against necessary services and facilities.”
The AFT and the IAM represent workers at numerous facilities controlled by Apollo, including Willamette Valley Medical Center near Portland, OR, Community Medical Center in Missoula, MT, and Kindred Hospital in Seattle, WA. The nation’s fastest growing healthcare union, the AFT last year launched a nationwideCode Red campaign to raise standards of care across the country.
“Workers at hospitals across the country are calling out the failed private equity playbook of gutting patient care to maximize profits, a model that benefits owners and hurts health care patients, workers, and the communities they serve,” said AFT President Randi Weingarten. “Healthcare should be affordable and accessible to all, but Apollo views it as just another industry to strip for assets and hawk to the highest bidder, while banking stratospheric fees.
“Patients need investment and oversight to ensure they receive the care they deserve—and workers need employers that provide safe conditions and fair pay. This pathbreaking report shows that private equity is focused only on the short-sighted goals of slashing staff and cutting costs, at whatever expense. The expiry date on this broken model is long past due—that’s why labor unions and lawmakers from both parties are uniting to force the industry to invest in services and put patients over profits.”
Hundreds of unionized nurses at the Apollo-owned Community Medical Center in Missoula, MT, recently signed a public petition demanding their hospital management address a range of patient care issues, including burnout and plunging morale as a result of short staffing that had left 63 full time nursing positions unfilled.
“These issues harm our efforts to recruit and retain nurses, making it even harder to provide high quality care to the communities we serve,” said Montana Nurses Association President Vicky Byrd.
As the second largest private equity firm in the United States, Apollo Global Management has the power and influence to continue its consolidation and inflict greater harm on the nation’s healthcare system. Without robust regulation and monitoring of the private equity industry, it is well within the realm of possibility for further healthcare facility consolidation and deterioration to occur across the country.
The report is available at https://pestakeholder.org/wp-content/uploads/2024/01/PESP__Report_Apollo_Lifepoint_2024.pdf.