Watchdog warns of risks to patients as private equity’s stake in US healthcare grows
Summary
A watchdog group called the Private Equity Stakeholder Project (PESP) warns that partnerships between private equity firms and nonprofit healthcare providers in the U.S. may create risks for patients, payers, and employees. Their report highlights over 500 such joint ventures and calls for stronger government oversight to protect the quality of care and nonprofit missions.Key Facts
- PESP identified more than 500 joint ventures between private equity firms and nonprofit healthcare providers, including hospitals and hospice care.
- Private equity firms have invested over $1 trillion in healthcare deals over the past decade.
- About 488 hospitals, or 8.5% of all private hospitals, are owned by private equity.
- Private equity investments often use debt and focus on short-term profits, which experts say may conflict with medical care goals.
- Nonprofit healthcare providers must legally prioritize their charitable mission over profits.
- The IRS allows joint ventures if nonprofits keep control and continue serving community health without focusing on profits.
- Some research links private equity ownership to increased medical errors, but experts disagree on the cause.
- PESP urges more government oversight to ensure that joint ventures follow nonprofit rules and protect patient care.
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