Private equity in healthcare: a look back at 2025

A year that highlighted private equity’s risks to healthcare 

In 2025, the Private Equity Stakeholder Project documented a year defined by escalating scrutiny of private equity’s role in healthcare. From major hospital bankruptcies and closures to high-profile acquisitions and growing policy intervention, private equity’s impact on healthcare moved from a niche concern to a central public issue. Below, we highlight some of the most consequential healthcare stories of the year, alongside examples of PESP’s research and policy work documenting these trends and their real-world consequences.

Prospect’s bankruptcy and hospital closures

In early 2025, Prospect Medical Holdings became one of the clearest examples of how private equity ownership can destabilize healthcare systems. Prospect’s Pennsylvania hospitals moved toward closure, triggering layoffs of more than 2,600 workers and threatening access to care across entire communities.

The fallout illustrated a familiar pattern. Years of financial strain, debt obligations, and opaque ownership structures left hospitals vulnerable to sudden collapse. When Prospect unraveled, workers and patients bore the immediate costs, while accountability for investors remained diffuse and limited.

Walgreens and the expansion of private equity risk

Private equity’s influence on healthcare in 2025 was not limited to hospitals. The acquisition of Walgreens by Sycamore Partners underscored how financial ownership can reshape healthcare-adjacent companies long before bankruptcy enters the picture.

Following the acquisition, Walgreens’ new owners cut worker holiday pay ahead of Thanksgiving, signaling how cost-cutting priorities can directly affect employees. At the same time, the deal raised alarms about debt loads and long-term bankruptcy risk, particularly given Walgreens’ role as a critical healthcare access point in many communities.

For workers and patients alike, the concern was not theoretical. Financial pressure at this scale can translate into store closures, reduced services, and instability in places where pharmacies function as frontline healthcare infrastructure.

Genesis Healthcare and the accountability gap

The bankruptcy of Genesis Healthcare further exposed structural weaknesses in how private equity-owned healthcare providers are regulated and held accountable. As one of the largest nursing home operators in the country, the Genesis collapse had national implications for residents, families, and staff.

PESP’s analysis showed how the bankruptcy process can function as a liability shield, allowing private equity owners to distance themselves from operational failures while patients and workers face the consequences.

Another Pipeline hospital closes

The closure of another former Pipeline Health hospital in 2025 reinforced concerns about repeat distress among private equity-owned providers. Pipeline’s past ownership structure and financial strategy left hospitals fragile, even after ownership changes.

For communities affected by these closures, the loss was not just a business failure, but a public health setback, often in areas with limited alternative care options.

States move to rein in private equity control of healthcare

As hospital distress mounted, state policymakers began to respond. In 2025, multiple states advanced measures aimed at limiting private equity control over healthcare providers and strengthening oversight of ownership structures.

PESP’s 2025 State Healthcare Policy Review documented this growing momentum, while also highlighting how uneven protections remain across states. These efforts marked an important shift, but also underscored how much of the regulatory framework still lags behind private equity’s influence.

Federal attention turns to veteran healthcare

Private equity’s impact on healthcare also drew federal scrutiny in 2025. PESP contributed expertise to a congressional roundtable examining how private equity ownership affects veteran healthcare services.

The discussion reflected growing concern that financial ownership models can undermine care delivery even within systems designed to serve veterans, adding urgency to calls for stronger oversight and transparency.

PESP’s healthcare research in 2025

Throughout the year, PESP published a wide range of research examining private equity’s footprint across the healthcare system. Two reports, in particular, illustrate the scope and significance of that work.

One analysis detailed private equity’s quiet roll-up of ambulatory surgery centers, documenting how consolidation in this sector can increase market power and reshape care delivery outside of traditional hospital settings.

Another body of research examined private equity’s growing role in healthcare bankruptcies, showing how PE-backed companies have accounted for a significant share of major filings, with consequences that extend well beyond corporate balance sheets.

What 2025 revealed

Taken together, the events of 2025 showed that private equity’s healthcare model carries risks that are now playing out in real time. Workers lost jobs, patients lost access to care, and communities lost critical healthcare institutions. Policymakers began to respond, but the scale of the problem continues to outpace existing safeguards.