Washington, D.C. — The rapid rise of private equity ownership of hospitals, nursing homes, and physician practices is threatening patient safety, driving up costs, and undermining competition and worker welfare across the U.S. health care system.
A new report from the Center for American Progress finds that private equity’s short-term, profit-driven model has reshaped health care delivery in ways that endanger patients and destabilize entire communities. Private equity investments in health care ballooned from $5 billion in 2000 to an estimated $104 billion in 2024.
“Private equity fund ownership is concerning in the health care space, where quality of care and patient safety should always be the highest priorities,” said Alexandra Thornton, co-author of the report and senior director for financial regulation at CAP. “Policymakers must close regulatory gaps that allow private equity firms to extract profits while putting patients, workers, and providers at risk.”
The analysis identifies five key areas where private equity’s financial practices and consolidation have the most damaging consequences:
- Debt loading and asset stripping: Many private equity-owned hospitals and nursing homes are saddled with crushing debt after leveraged buyouts and burdensome rent obligations after the sale of underlying real estate, leaving less funding for staff, equipment, and patient care.
- Decreased competition: Serial acquisitions by private equity firms have consolidated local markets and allowed dominant practices to evade antitrust scrutiny.
- Rising costs: Private equity ownership has been shown to increase health care prices for patients and payers, while pressuring providers to deliver unnecessary or more expensive services.
- Lower care quality: Research links private equity ownership to reduced staffing, worse patient outcomes, and higher rates of preventable hospitalizations.
- Harms to workers: Health care workers in private equity-owned facilities can face burnout, reduced autonomy, and layoffs tied to cost-cutting measures.
The report also outlines a range of federal and state policy solutions, including strengthening antitrust enforcement, closing loopholes in merger reporting requirements, increasing transparency of ownership structures, and eliminating financial incentives that reward risky and extractive practices.
The Center for American Progress also released a companion brief by Kierra B. Jones, which examines how private equity ownership of OB-GYN practices, fertility clinics, and maternity services can exacerbate the nation’s maternal health crisis and deepen inequities in reproductive care.
Read the full reports:
“5 Consequences of Private Equity’s Expansion in Health Care Services“ by Brian Keyser, Alexandra Thornton, and former CAP intern Claire Koyle.
“How Private Equity and the Financialization of Health Services Can Undermine Access to Sexual and Reproductive Care“ by Kierra B. Jones.
For more information or to speak with an expert, contact Christian Unkenholz at [email protected].