Apollo’s Stranglehold on Hospitals Harms Patients and Healthcare Workers
January 11, 2024
New Report Details Harm Caused to Healthcare Industry by Apollo Global Management
Findings add to Senate Investigation of Lifepoint Health’s PE owner
The comprehensive study, “Apollo’s Stranglehold on Hospitals Harms Patients and Healthcare Workers,” was produced in conjunction with the American Federation of Teachers (AFT) and the International Association of Machinists and Aerospace Workers (IAM).
Lifepoint Health and ScionHealth are two of the largest hospital systems in the US. They are both owned by private equity firm Apollo Global Management.
The two companies are the result of a series of hospital acquisitions by Apollo, which in 2018 bought Lifepoint and merged it with another hospital chain, RegionalCare Hospital Partners. Then, in December, 2021 Lifepoint acquired the large long term acute care hospital chain Kindred Healthcare. As part of the transaction, Lifepoint shifted some of the acquired facilities and some of its existing hospitals into a new company called ScionHealth, which is also controlled by Apollo.
Through Lifepoint and Scion together, Apollo has an extensive hospital footprint, owning approximately 220 hospitals across 36 states. Of the 220 hospitals, Lifepoint has 126 (57%), while Scion has 94 (43%). As of December 2021, Lifepoint employed 50,000 workers, and Scion reportedly employs approximately 25,000 workers as of 2023.
Private equity investment in healthcare companies can carry substantial risk to patients and healthcare workers. The high returns typically targeted by private equity investors over short time horizons may incentivize cost-cutting and risky behaviors that can harm patient care, including using high financial leverage, reducing staff, and pushing costly procedures.
Apollo’s bullish hospital acquisitions are the latest example in a trend of consolidation of healthcare providers, which has been steadily increasing over the past two decades and is expected to continue. A growing body of research shows that consolidation of healthcare providers tends to raise healthcare prices while failing to improve quality of care.
The hospital systems Apollo owns are highly indebted, have cut operating costs and charity care, and in some cases reduced services, received poor quality rankings, and attracted regulatory scrutiny.
Key Points
- Private equity firm Apollo Global Management owns two of the largest hospital systems in the US: Lifepoint Health and ScionHealth.
- Apollo’s ownership of major rural hospital chains poses risks to patients and healthcare workers.
- Under Apollo’s ownership, Lifepoint and ScionHealth have taken on substantial debt and are now subject to high credit risk.
- Apollo’s hospitals across the country have experienced cuts to services, layoffs, poor quality ratings, and regulatory investigations.
- Apollo used a complex spinoff transaction to evade antitrust scrutiny in its acquisition of Kindred Healthcare, raising questions about potential anti-competitive outcomes.
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.
Find the full report here.
Read the report press release here.