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Private Equity in Healthcare – PESP’s March 2025 Roundup

March 31, 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

Private equity is investing in intellectual and developmental disability services– PESP

  • The report found that private equity firms have been acquiring companies providing services for people with intellectual or development disabilities (IDD).
  • Through recent buyouts and consolidation, several large private equity-owned companies have emerged with tens of thousands of employees at numerous locations across the United States. In some cases, these companies have achieved regional market concentration obscured by complex ownership structures and disparate branding.
  • The report was covered in the Washington Post.
    • PESP’s Director of Programs Eileen O’Grady told the Post, “Private equity firms are fundamentally altering [IDD] services in ways that put some of the most vulnerable members of our communities at risk. The private equity model prioritizes short-term financial gains, often at the expense of staffing levels, service quality and even basic client safety.”
  • American Prospect, STAT, Healthcare Dive, and MedCity News also covered the report.

Pennsylvania state legislators convene hearing examining healthcare accessibility and hospital closure impacts

  • On March 10, Senate Democratic Policy Committee Chair Nick Miller held a hearing to examine the impact of hospital closures in Pennsylvania, focusing on potential declines in public health, economic growth, and community services.
  • The hearing was held in the context of a proposed closure of Crozer Chester Medical Center, which is owned by Prospect Medical Holdings, a former PE-owned health system in bankruptcy.
  • In a statement, Senator Anthony Williams said “The proposed closure of Crozer Chester Medical Center is nothing short of a crisis for Delaware County and its community. This decision would create a dangerous healthcare desert that puts lives at risk. Beyond the devasting impact on patients, it would also strip hardworking residents of their jobs, destabilizing families and the local economy.” 
  • PESP Healthcare Director Mary Bugbee was one of seven panelists who testified at the hearing.She explained that “putting profits before patients is not unique to private equity-owned healthcare companies. But because there’s less transparency around private equity deals and the companies they own, and because private equity firms tend to use more debt than other types of investors to fund their business strategies, the private equity business model can amplify the profit-seeking behaviors that put patients and healthcare workers at risk.”
  • “Investment is a misnomer because a lot what we’re seeing is extraction. It’s not truly investment.” 

2 Ohio hospitals abruptly halt operations– Becker’s Hospital Review

  • Two former Steward hospitals have abruptly halted operations, according to Becker’s:
    • “Insight Hospital and Medical Center Trumbull and Hillside Rehabilitation Hospital, both in Warren, Ohio, paused all inpatient, outpatient and emergency room services March 27 due to ongoing bankruptcy and financial disruptions from former owner Dallas-based Steward Health Care.”
  • Steward Health Care was owned by Cerberus Capital Managementfrom 2010 to 2020. On May 6, 2024, Steward Health Care filed for Chapter 11 bankruptcy, reporting over $9 billion in liabilities. 
  • For more information on Steward Health, you can access PESP’s June 2024 report, “The pillaging of Steward Health Care – How a private equity firm and hospital landlord contributed to Steward’s bankruptcy.”

Walgreens to go private in roughly $10 billion deal with Sycamore Partners– CNBC  News

Private equity investments in Programs of All-Inclusive Care for the Elderly (PACE) – NORC

  • A recent report from National Opinion Research Center (NORC), which is affiliated with the University of Chicago, found that “the entry of for-profit organizations, particularly those backed by private equity and venture capital, has transformed the PACE landscape…”
  • For the time period examined – 2016 to 2022 – the researchers found that “Private equity and venture capital investment in PACE surged, driving the number of investor-backed for-profits up by 300 percent. Some states, including Pennsylvania and Virginia, saw for-profit growth coincide with nonprofit declines.”
  • The report cites a PESP blog post from 2022 titled “Failures at PE-Owned Programs for Low-Income Seniors Raise Red Flags.”

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

Blog Posts:

Reports:

Other PESP healthcare news and mentions:

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