Donate here
News and blog

Private Equity in Healthcare – PESP’s April 2025 Roundup

May 2, 2025

Each month, PESP’s Healthcare Team will be putting together a roundup that shares the latest news stories related to private equity in healthcare and highlights the work that our team has published in the last month.

In the news

New PESP report reveals private equity continues to acquire and bankrupt nursing homes

  • In April, PESP released a report, “Private Equity Is Continuing to Acquire – and Bankrupt – Nursing Homes.” Private equity investments in nursing homes continue to pose significant risks to residents and workers due to profit-driven practices, high debt levels, and complex real estate transactions. Current estimates suggest that private equity firms own between 5% and 13% of U.S. nursing homes.
  • At least two nursing home companies owned by private equity firms and a private equity firm that itself owned nursing homes have filed for bankruptcy in recent years: LaVie Care Centers/Consulate Health Care (Formation Capital) in 2024, Goldner Capital Management in 2024, and Gulf Coast Health Care (Barrow Street Capital) in 2022. Bankruptcy proceedings have also revealed harrowing conditions at multiple LaVie/Consulate facilities, with reports describing significant concerns about patient care.
  • The report received media coverage in McKnight’s Long-Term Care News, Iowa Capital Dispatch, The Lund Report, and Skilled Nursing News.

PESP updates private equity hospital tracker

  • On April 16, PESP released updated data for its private equity hospital tracker.
  • The tracker now shows 488 US hospitals are currently owned by private equity. At least 27.7% of these hospitals serve rural populations. Texas has the most private equity-owned hospitals (108), while New Mexico has the highest proportion (36.2%).
  • The update included a case study on Lifepoint’s North Carolina hospitals, which examines CMS data on a number of other indicators including hospital acquired infections, heart failures, and ER wait times.
  • The latest data was covered in D Magazine and cited by Crain’s Chicago Business.

Prospect hospitals in Pennsylvania to close, lay off 2,651 workers

  • Crozer Health, a safety net health system with hospitals in eastern Pennsylvania, is shuttering operations at its remaining two hospitals and various outpatient locations. It is laying off 2,651 workers.
  • Crozer’s parent company, Prospect Medical Holdings, filed for bankruptcy in January. The bankruptcy court’s approval for Prospect to proceed in closing the Pennsylvania hospitals comes after a multiyear battle waged by elected officials, workers, and communities to keep the hospitals open after the system’s former private equity owner, Leonard Green & Partners, siphoned hundreds of millions in debt-funded dividends out of the system and sold off the real estate to hospital landlord, Medical Properties Trust, leaving the hospitals in poor financial condition.
  • Peggy Malone, a registered nurse at Crozer who leads the Crozer Nurses Association, has been an active voicein advocating for Crozer hospitals and patients. She recently told Healthcare Dive, “I struggle with the fact that we save airlines and we help auto industries and weren’t able to save the hospital. That’s going to take me a long time to process.”

New Mexico passes legislation that increases transparency in healthcare transactions

  • On April 7, NM Governor Michelle Lujan Grisham signed a hospital ownership oversight bill into law.
  • Coverage of the bill’s passage cites PESP research showing that 38% of New Mexico’s hospitals are owned by private equity firms and New Mexico is most at risk of private equity takeovers.
  • The Senate version of the bill did not pass out of the Senate Judiciary Committee earlier in the legislative session. According to KUNM,
    • “House Majority Leader Reena Szczepanski sprang into action with the defeat of SB14…She crafted a new bill, House Bill 586, based on 2024’s temporary bill, but beefed up with more oversight, full enforcement and some whistleblower protections…HB586 managed to get passed by all necessary committees and both chambers in a mere four working days, leaving two days to spare before the session’s end.”

Acquisition of Walgreens a prescription for trouble– Crain’s Chicago Business

  • On April 25, Crain’s Chicago Businesspublished an op-ed from PESP Executive Director Jim Baker on the Sycamore Partners buyout of Walgreens. The op-ed highlighted the risks and far-reaching implications of a private equity takeover of the pharmacy chain. Baker wrote:
    • “Walgreens is not just a retail pharmacy but a major employer and cornerstone of community health care. We urge the public to understand the potential ramifications of this takeover. The consequences of prioritizing profit over people could be devastating. It’s on all of us to demand accountability and transparency and to protect the vital services that Walgreens provides to our communities.”
  • Senator Elizabeth Warren (D-MA) sent an open letter to Sycamore Partners regarding concerns around the proposed buyout. Her letter cited PESP’s research on Sycamore Partners and recent analysis of the deal’s high debt levels.
  • Healthcare Brew also cited PESP’s analysis of the deal and quoted PESP Executive Director Jim Baker:
    • “It’s incredibly risky,” he said. “It’s a massive amount of debt. It feels like a house of cards.”

Healthcare team’s latest blogs, reports, and media mentions

Blog Posts:

Reports

Other PESP healthcare news and mentions:

Sign up to our newsletter to receive news and updates from PESP

Click here