Private Equity in Healthcare – PESP’s February 2025 Roundup
February 28, 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 mont
In the news
PE behind hospital closures in Illinois, Colorado, and Florida
- Illinois: Two long-term acute care facilities in Chicago are shutting down and laying off more than 150 workers. The facilities are part of the Kindred Hospitals of Chicago network, which is owned by hospital chain ScionHealth. Scion is owned by private equity firm Apollo Global Management.
- PESP has previously written about Apollo’s ownership of Scion in a 2024 report: Apollo’s Stranglehold on Hospitals Harms Patients and Healthcare Workers
- Colorado: A behavioral health hospital owned by Summit Behavioral Healthcare announced that it is shutting down and laying off all 158 employees. Summit has been owned by various private equity firms for at least a decade. Its current owner, Patient Square Capital, acquired it in 2021.
- Florida: Orlando Health announced it would close Rockledge Regional Medical Center, which was formerly owned by Steward Health Care and acquired by Orlando Health during Steward’s bankruptcy. See PESP’s 2024 on Cerberus Capital Management’s looting of Steward: The Pillaging of Steward Health Care.
- In a three-part series (here, here, and here) Michigan-based TV6 reported on private equity ownership of healthcare companies in Michigan, with a focus on the joint venture between Apollo-owned Lifepoint Health and Duke University Health. The Duke-Lifepoint joint venture owns three hospitals in the Upper Peninsula of Michigan.
- As of December, nurses and technologists at Lifepoint’s UPHS-Marquette hospital claimed that it was “already trying to cut their health insurance and increase their costs” as their union headed into contract negotiations.
- PESP’s Mary Bugbee spoke to TV6 about the importance of strong staffing standards: “’If you don’t have enough staff on the floor, enough staff in the ICU, enough staff in the emergency room, that’s going to impact the quality of care patients receive,’ Bugbee said. ‘Mistakes can happen and weigh heavily on overburdened clinicians, many of whom might decide to leave the industry because it’s too much for them.’”
States revive efforts to restrict private equity transactions – Modern Healthcare
- Multiple states are considering bills that would create greater oversight of private equity ownership of healthcare companies. These include New Mexico, Washington, Oregon, Connecticut, Indiana, New York, and Vermont. Massachusetts signed a new bill into law earlier this year.
- PESP’s Mary Bugbee told Modern Healthcare: “There are just greater risks with the private equity model that relies on more debt than you see with the usual problems that show up in for-profit healthcare… Having greater transparency can help regulators and state agencies prepare to address issues that might come up.”
An allocator’s guide to reigning in private equity’s worst excesses in healthcare – Impact Alpha
- Ibrahim Rashid wrote for Impact Alpha about how investors can adopt responsible investment policies for private equity healthcare investments, including a “series of diligence questions to help asset owners assess whether their PE managers are engaging in predatory behavior towards the US Healthcare system.”
- Suggested diligence questions relate to excessive debt, staffing and quality changes, sale-leasebacks, Medicare/Medicaid fraud litigation, and more.
Healthcare team’s latest blogs, reports, and media mentions
Blog Posts:
- Higher prices at private equity-acquired gastroenterology practices
- Private Equity Healthcare Acquisitions – January 2025
- Private equity industry behind over half of large US bankruptcies in 2024
- PE-owned behavioral health hospital closes
- How private equity exploits the tax code to loot workers, consumers, and communities
- Private equity interest in healthcare sector continued at steady pace in 2024
- New Mexico’s proposed measures for hospital merger review
Reports
PESP healthcare news and mentions:
- WHYY interviewed PESP’s Michael Fenne in a story about his 2024 report on private equity’s presence in the Philadelphia healthcare market.
- PESP’s new report tracking private equity healthcare acquisitions in 2024 was cited by Healthcare Dive and HomeCare Magazine.
- Mother Jones discussed private equity’s role in consolidating methadone providers and lobbying against legislation that would improve methadone access, and quoted PESP’s Director of Programs, Eileen O’Grady.
- PESP’s Hospital Tracker was cited by the Denver Gazette and listed as a resource by the Association for Health Care Journalism.
- Impact Alpha’s article on responsible investment policies in private equity healthcare investments credits PESP research.
- PESP’s new report on private equity’s role in corporate bankruptcies in 2024 highlights a disproportionate impact in healthcare: 7 out of the 8 largest healthcare bankruptcies last year (with liabilities over $500 million) were PE-owned. PESP’s bankruptcy research was covered in Law360, Becker’s, Pittsburgh Business Times, , Johns Hopkins News-Letter, McKnight’s Senior Living, Health Exec, and MedPage Today.
- A press release from the office of Sen. Elizabeth Warren (D-MA) cites PESP’s research on Cerberus Capital’s pillaging of Steward Health Care.
