Private equity firms claim their investments in U.S. health care modernize operations and improve efficiency, helping to rescue failing healthcare systems and support practitioners. But recent studies build on mounting evidence that suggests these for-profit deals lead to more patient deaths and complications, among other adverse health outcomes.  

Recent studies show private equity (PE) ownership across a wide range of medical sectors leads to:

• Poorer medical outcomes, including increased deaths, higher rates of complications, more hospital-acquired infections, and higher readmission rates. 
• Staffing problems, with frequent turnover and cuts to nursing staff or experienced physicians that can lead to shorter clinical visits and longer wait times, misdiagnoses, unnecessary care, and treatment delays. 
• Less access to care and higher prices, including the withdrawal of health care providers from rural and low-income areas, and the closure of unprofitable but essential services such as labor and delivery, psychiatric care, and trauma units.

Dr. Stephanie Woolhandler, a distinguished professor of public health at Hunter College and co-founder of Physicians for a National Health Program, isn’t surprised by the findings.

“Private equity’s track record in health care is so consistently bad that regulators should ban new private equity purchases in the health sector and impose stringent oversight on the health resources private equity already owns,” she says.

As early as 2007, a New York Times investigation found that residents were worse off at nursing home chains acquired by large private investors, including PE firms. More recently, economist Atul Gupta showed in 2021 that private equity acquisitions of U.S. nursing homes over a 12-year period increased deaths among residents by 10%—the equivalent of an additional 20,150 lives lost. 

Two years later, a landmark review in The BMJ analyzed 55 studies across eight countries, primarily in the U.S. It detailed how PE ownership in health care was most often associated with higher costs to patients or payers and “mixed to harmful” impacts on quality of care.

Now, new peer-reviewed research reinforces these findings and reveals a troubling pattern, especially in the absence of effective regulation and oversight: Patients treated at PE-owned facilities, whose numbers have skyrocketed, continue to experience worse or mixed outcomes—from higher mortality rates to lower satisfaction—compared to those treated elsewhere. 

This includes an update to the BMJ review, which confirmed the negative impacts of private equity ownership on health outcomes and care quality. Relatively few articles cited any positive impacts—and even those also indicated negative ones, the authors say. 

In fact, no study to date has found significant improvements to health care quality, efficiency, costs, or access as a result of private equity’s entrance into health care, according to a March 2024 report in the Stanford Law Review. 

“The drive for quick revenue generation threatens to increase costs, lower health care quality, and contribute to physician burnout and moral distress,” they say. “PE’s push for rapid revenue growth and quick exits generally means that PE is not adding value to patient care.”

Sacrificing care for cash?

Private equity firms typically acquire companies and sell them for high returns within three to seven years—a quick turnaround that often involves restructuring, such as cutting costs and targeting specific services to raise prices. It can result in merging or selling health care businesses and their assets, which can severely deplete medical resources and undermine care quality and access for those in need, studies show. 

PE ownership has also been shown to negatively impact physicians, who may lose independent control over clinical decisions, and the future generation of medical trainees, who face job loss and financial instability.

Bankruptcies, too, like Steward Health Care, have shuttered PE-owned hospitals in several states—jeopardizing not just individual patients, but entire communities’ access to care. For instance, the April 22 closing of Rockledge Hospital in Florida left more than 60,000 people without an emergency room, while two other hospitals will be closed in Pennsylvania’s fifth most populous county.

At least two nursing home companies owned by private equity firms and a private equity firm that itself owned nursing homes have filed for bankruptcy in recent years, according to a report released last week [April 23] by the Private Equity Stakeholder Project (PESP).

“Private equity firms are continuing to buy up nursing homes, and use profit-seeking strategies that can put residents at increased risk,” said Michael Fenne, a senior research and campaign coordinator with the nonprofit watchdog organization. “These buyouts often result in unnecessary debt and reduced operating budgets for the nursing homes, and a shift away from a focus on well-being for residents.”

No study to date has found significant improvements to health care quality, efficiency, costs, or access as a result of private equity’s entrance into health care.

Or consider Hahnemann Hospital, which served low-income Philadelphia residents for nearly two centuries before closing its doors, as researchers note in a new Health Policy study [May 2025] on private equity expansion and impacts. 

“Hahnemann’s assets were sold, with the profits going to investors, and the hospital became more and more indebted. It declared bankruptcy and closed within two years of the PE purchase,” the authors say. “The closure made access to care difficult for Hahnemann’s patients, nearly all of whom had public insurance or were uninsured.”

Another study, published last year [July 2024] in JAMA, found hospital assets decreased by 24% in the two years after private equity purchases, leaving facilities less equipped to care for patients, not more. The loss of land, buildings, major hospital equipment, and information technology—equivalent to $28 million in total assets per hospital—means fewer resources for effective patient care, experts say. 

“It’s a very striking finding and should change the way people think about private equity in hospitals. The PE firms say, ‘We bring new capital into hospitals.’ It turns out that’s not quite true,” Woolhandler, a co-author of the study, told NBC News. “There are real dangers to the health care that people get if you deplete all the capital from a hospital.”

Conflicting short- and long-term interests at play

Healthcare is attractive to private investors because of its high revenue potential, fragmented markets, aging population, and insurance reimbursements. 

Private equity firms, in particular, have invested more than $1 trillion in nearly every corner of the U.S. healthcare sector over the last decade. Most recently, Walgreens Boots Alliance announced its $10 billion purchase by the PE firm Sycamore Partners.

Today, private equity groups own an estimated 488 U.S. hospitals along with tens of thousands of physician practices, urgent care centers, addiction clinics, and nursing homes, according to PESP. That includes 8.5% of all private hospitals and 22.6% of all proprietary for-profit hospitals.

In some areas, PE firms control more than half of emergency room staffing, and they own nearly one-third of hospices with the lowest spending on direct patient care, the organization says. 

Nearly a quarter (22.6%) of private equity-owned facilities are psychiatric hospitals, with PE companies increasingly acquiring hospices and companies providing services for people with intellectual or developmental disabilities (IDD). PE firms have also been acquiring specialty companies providing home care, dental care, mental health, dermatology, and vision services.

“When private equity takes over a hospital, things generally get worse for patients.”

But a model aimed at short-term financial benefits may not fulfill the need to deliver long-term, patient-centered care, especially for vulnerable populations, recent studies and reports suggest. 

Evidence pinpointed in a multiagency federal report issued in January [2025] by the Department of Health and Human Services suggests that PE firms pursue cost-cutting too quickly, leading to patient safety issues and reductions in quality.

A bipartisan Senate Budget Committee report released that same month [January 2025] cites more than a million documents to show how two private equity firms extracted huge profits from hospitals, while increasing their debt and allowing patient care and safety to decline. In some cases, the report shows, facilities were forced to close.

The findings “call into question the compatibility of private equity’s profit-driven model with the essential role hospitals play in public health,” the report concludes. “The consequences of this ownership model—reduced services, compromised patient care, and even complete hospital closures—potentially pose a threat to the nation’s health care infrastructure, particularly in underserved and rural areas.”

Recent studies build on evidence of harmful patient impacts

Research published since the 2023 BMJ review backs that up. Consider:

• Medicare patients at PE-owned hospitals had a 25% increase in hospital-acquired conditions, mostly due to a 27% rise in falls and nearly a 38% increase in central line-associated bloodstream infections. Surgical site infections also doubled in PE-owned hospitals, despite an 8% reduction in the number of surgeries. “Private equity acquisition of hospitals, on average, was associated with increased hospital-acquired adverse events despite a likely lower-risk pool of admitted Medicare beneficiaries, suggesting poorer quality of inpatient care,” the authors say. “These findings heighten concerns about the implications of private equity on health care delivery.”
• Private equity-owned hospitals had lower overall ratings, fewer patients willing to recommend them, and worse medical staff responsiveness. The gap in satisfaction grew steadily over time, especially by the third year after the buyouts. The researchers noted that poor patient experiences can signal deeper problems, including patient safety, and may be due to structural changes made by PE firms.  “When private equity takes over a hospital, things generally get worse for patients,” Dr. Rishi Wadhera, an associate professor at Harvard and co-author of the study, told WBUR in January. “There really is an urgent need for greater transparency, monitoring and regulatory oversight.”
• Medicare patients who had lung surgery (resection) at private equity-owned hospitals were more likely to suffer serious complications, stay longer, and die within 30 days of surgery. More patients also had to be readmitted within 30 days.  “Collectively, these findings suggest that the higher rates of adverse outcomes at private equity–owned hospitals may be driven by changes to hospital resources and infrastructure, characteristic of private equity acquisition that relates to poorer quality of surgical care,” the researchers say.
• More than 9,400 Medicare patients who underwent complex esophageal surgery (esophagectomy) at PE-owned hospitals had significantly higher 30-day death rates, more and more serious complications, and were more likely to die after complications occurred, compared to non-PE-owned health centers. Lower-quality surgical care may be influenced by PE ownership negatively impacting the number of complex surgeries performed, the nurse-to-patient ratio, and teaching hospital status. “Second, worse postoperative outcomes for patients undergoing esophagectomy at private equity–acquired institutions call into question the appropriateness of whether these institutions should provide high-complexity surgical care,” the authors say.
• PE-owned home health agencies (HHAs) were better at starting patient care quickly and improving short-term outcomes like walking and bathing. However, they did worse in critical areas related to long-term outcomes like quickly following doctor-recommended medication actions, preventing hospital readmissions, and helping patients transition safely back home—raising concerns about the sustainability of long-term care quality, the researchers say. “Policymakers must carefully monitor the influence of PE ownership to ensure that improvements do not come at the expense of patient well-being,” they say.

“The consequences of this ownership model—reduced services, compromised patient care, and even complete hospital closures—potentially pose a threat to the nation’s health care infrastructure, particularly in underserved and rural areas.”

• Hospices owned by private equity firms or publicly traded companies (PTCs) had significantly worse scores in caregiver-reported satisfaction and communication. Not-for-profit hospices received the highest ratings. “These findings raise questions as to how patients are affected when PEFs and PTCs own hospices and suggest the need for greater transparency and accountability of hospice ownership,” say the researchers, who studied nearly 2,700 hospices.
• A December 2024 study of nearly 2,000 opioid treatment clinics nationwide showed one-third were PE-owned, with ownership highest (100% in three states) in the Midwest and South—often in low-income, mostly White areas. The researchers raised concerns about profit motives driving care decisions and possible inequities in access. “While investments might reflect area-level need, efforts to ensure that addiction treatment focuses on patient-centered care over profit-maximizing opportunities, such as selection of commercially insured patients, price increases, and non-guideline-based utilization, may be needed,” they say.
• PE-backed ownership in plastic surgery, especially in cash-only practices, has expanded rapidly—increasing by 4,300% in number and 7,630% in capital investment between 2000 and 2004. Many practices employ a cash-only model and few plastic surgeons, relying instead on aesthetic clinicians, who provide non-surgical treatments. “Although PE investment brings financial and operational advantages, it raises concerns about healthcare quality and equity,” the researchers say.
• And most recently, a study published this week [April 23, 2025] in Health Affairs, found that private equity–owned physician practices decreased access by nearly 20% to retinal detachment surgery. Early detection and timely surgical treatment are needed to prevent irreversible vision loss, but the average Medicare reimbursement is nearly $4,000 less than the cost of performing surgery, the researchers note. “These findings shed light on how PE acquisitions can affect the provision of services that do not present financial opportunities for investors,” they say. “As nearly 30% of retina specialists are affiliated with PE firms nationally, further investigation into PE’s impact on access for patients is warranted to determine whether PE acquisitions require patients to travel longer distances or have longer wait times, which could have serious effects on patient outcomes.”

Mounting calls for transparency and regulation

Governmental oversight of private equity ownership in health care remains limited. Regulatory gaps and legal loopholes, as well as complex ownership structures, prevent the Federal Trade Commission and state agencies from tracking many acquisitions or holding owners accountable.

For instance, the FTC reviews fewer than 10 percent of private equity–related healthcare investments because most deals don’t meet the minimum monetary threshold, according to a report published in November.

Proposed federal legislation, such as the Corporate Crimes Against Health Care Act, sponsored by U.S. Sen. Elizabeth Warren (D-Mass.), would create criminal violations and civil penalties for firms that take a controlling interest in healthcare organizations and cause patient harm, including prison terms and clawbacks of compensation. Another bill, the Health Over Wealth Act, sponsored by U.S. Sen. Edward J. Markey (D-Mass.), aims to boost transparency. Both remain stalled in Congress.

Several states, including Massachusetts, have introduced or passed laws requiring greater oversight and transparency around private equity-backed health care transactions. Some are looking to strengthen or expand the scope of Corporate Practice of Medicine (CPOM) laws that limit non-licensed healthcare providers from owning medical practices, employing doctors to provide care, or influencing physicians’ decisions.

Others, including researchers and public health advocates are calling for stronger transparency rules, ownership caps, and patient protections. Groups like Take Medicine Back, which was originally founded by emergency physicians, want a full ban on corporate control of medical practice.

Still, experts note that the moves are scattered and relatively new. Policymakers attempting to counter these threats can barely keep up, Erin C. Fuse Brown and Mark A. Hall write in their Stanford Law Review study: “Like a cloud of locusts, private equity moves so quickly that by the time lawmakers become aware of the problem and researchers study the effects, private equity has moved on to other investment targets.”