Private equity firms, such as Apollo Global Management, have been increasingly taking over various industries, including healthcare. In a case study focusing on a hospital chain in Pennsylvania known as Conemaugh Health System, patients have reported a decline in the quality of care since the system became for-profit in 2018. Patients like Paul Ricci have experienced long wait times in the emergency department and difficulty getting billing questions answered. Critics argue that the pursuit of profit by private equity firms can conflict with patient care, leading to concerns and increased scrutiny from legislators, anti-trust enforcers, and patients.
LifePoint Health, which is owned in part by Apollo, has come under scrutiny in Senate inquiries to determine if financial deals like those made by the company are harming patients. Private equity firms typically acquire companies, loading them with debt and looking to sell them for a profit in a few years. Research by the Private Equity Stakeholder Project aims to provide transparency and identify where private equity firms dominate in key economic areas such as healthcare, housing, jobs, and pensions. States like Arizona, Georgia, New Mexico, and West Virginia have been identified as having high risks associated with private equity involvement in health care and housing.
Independent academic research has shown that patients at hospitals, nursing homes, and physician practices owned by private equity firms may experience higher rates of adverse events and complications. In Pennsylvania, while only 3.2% of hospitals are controlled by private equity firms, the readmission rate after discharge is higher than the national average. Crozer Health, a hospital system near Philadelphia that was once owned by private equity firm Leonard Green & Partners through Prospect Medical Holdings, has faced financial challenges and service closures. Despite the decline of the hospital, private equity investors were able to extract significant profits before selling it in 2021.
Large corporate landlords, including private equity-backed companies, have increasingly taken over single-family homes in regions like metropolitan Atlanta, leading to concerns about crowding out potential homebuyers and impacting tenants. Tenant advocacy groups in Atlanta, such as the Housing Justice League, have reported significant rent increases and neglect of maintenance by these corporate landlords. Additionally, private equity’s impact on jobs is significant in states like Massachusetts, where 9% of the private sector workforce is employed by private equity firms. Research suggests that employee deaths or hospitalizations at employers controlled by private equity firms in Massachusetts have been higher compared to other states.
The involvement of private equity firms in various industries, including healthcare, housing, jobs, and pensions, has raised concerns about the impact on consumers and communities. While private equity firms may argue that their acquisitions improve the sectors they invest in, critics point to evidence showing negative effects on patient care and tenant rights. Transparency and regulation of private equity firms have become increasingly important to ensure the protection of consumers and workers. State-specific risk indexes, such as the one created by the Private Equity Stakeholder Project, aim to empower communities, working families, and policymakers to advocate for change and protect their states from the threats posed by unchecked private equity firms.
