Private equity drains resources from U.S. hospitals, report says

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(The Center Square) – Private equity ownership of hospitals across the United States leads to declining patient care and drained community resources, a new report warns.

Peter Pitts, former Associate FDA Commissioner and president of the Center for Medicine in the Public Interest, released "Barbarians at the Hospital Gates: Private Equity and its Impact on Patient Care" this month.

“Over the past two decades, private equity (PE) has come to play an increasingly influential role in the operations and management of hospitals across the United States,” the report said. “Recent reports found that PE has invested over $1 trillion into the American healthcare sector, with 20% of all for-profit hospitals owned or operated by PE firms. Disconcertingly, studies show patient experience worsens after a hospital is acquired by PE, as such acquisitions create incentives to pursue short-term returns through aggressive cost-cutting.”

Private equity firms routinely strip hospitals of assets, according to the report.

“Nationwide, in the two years after a private equity takeover, hospitals lost on average nearly one-quarter of their real estate, buildings, and equipment. That’s equivalent to a $28 million loss per hospital,” Pitts wrote.

Examples include Massachusetts, where the state provided Steward Healthcare $72 million in emergency funding after the group declared bankruptcy. Apollo Global Management, the private equity firm behind Steward, walked away with about $325 million.

The report cites studies showing a rise in adverse patient outcomes after private equity takeovers.

A Journal of the American Medical Association study found a “25% increase in hospital-acquired complications (HACs), including a 38% rise in central-line bloodstream infections, a doubling of surgical-site infections, and a 27% increase in falls, despite fewer central lines being placed,” the report said.

Patient satisfaction also declines.

A 2025 cohort study analyzing Hospital Consumer Assessment of Healthcare Providers and Systems data showed “declines in overall hospital ratings (−2.4 percentage points) and willingness to recommend (−2.1 points) in PE-acquired hospitals relative to matched controls. These differences grew over time, with a −5.2 and −4.4 drop by year three post-acquisition, respectively.”

The report also noted a Health Affairs study showing that “Medicare beneficiaries undergoing emergency surgeries at PE-owned hospitals had a 42% higher 30-day mortality, rising from 6.4% to 9.1%, compared to similar procedures at non–PE hospitals.”

Pitts concludes that private equity’s short-term financial model undermines care.

“Safeguarding patient welfare requires regulatory vigilance, transparency, and alignment of financial and clinical goals – so that hospitals remain vital lifelines, not merely profit-generating assets,” he said. “When it comes to advancing quality hospital care – greed is not always good.”