Senate Budget Committee Digs into Impact of Private Equity Ownership in America’s Hospitals
Private financial transactions may be hurting patients nationwide
WASHINGTON, D.C. – Senate Budget Committee Chairman Sheldon Whitehouse (D-R.I.) and Ranking Member Chuck Grassley (R-Iowa) today opened a bipartisan investigation into the effects of private equity ownership on our nation’s hospitals. Senators Whitehouse and Grassley sent letters to the chief executive officers (CEOs) of Leonard Green & Partners, Prospect Medical Holdings, Medical Properties Trust, Apollo Global Management, Lifepoint Health, and Ottumwa Regional Health Center, a for-profit Iowa hospital. The senators are demanding answers regarding questionable financial transactions that may have impacted quality of care for patients in hospitals under private equity ownership.
Since coming under private equity ownership, many hospitals have experienced significant staffing reductions and substandard health care and have been stripped of valuable assets, including their real estate, leaving them saddled with debt. To assess the impact of these transactions and address their harmful effects, the senators are asking for documents and detailed answers about related-party transactions and the degree to which the private equity firms are calling the shots at these hospitals.
“As private equity has moved into health care, we have become increasingly concerned about the associated negative outcomes for patients,” Chairman Whitehouse said. “From facility closures to compromised care, it’s now a familiar story: private equity buys out a hospital, saddles it with debt, and then reduces operating costs by cutting services and staff—all while investors pocket millions. Before the dust settles, the private equity firm sells and leaves town, leaving communities to pick up the pieces.”
“When it comes to our nation’s hospitals, a business model that prioritizes profits over patient care and safety is unacceptable,” Ranking Member Grassley said. “The shocking events at Ottumwa Regional Health Center prompted me to ask tough questions about how financial maneuvers by private equity and related companies have negatively impacted the resources, and thereby the patient care, at our rural hospitals. Iowa residents, including those living in rural areas, shouldn’t have to settle for anything less than the highest quality of care. I look forward to working with Senator Whitehouse to get answers and ensure that our nation’s hospitals provide high-quality health care to the communities and patients they serve.”
This bipartisan investigation builds on a previous one launched in March 2023 by Ranking Member Grassley that sought information on the extent to which private equity ownership of an Iowa hospital contributed to a series of horrific events involving alarmingly mismanaged care. The companies failed to provide full and complete responses to Ranking Member Grassley’s questions, prompting additional oversight.
In recognition of their increasing concern about the growth of private equity in health care, Senators Grassley and Whitehouse are expanding upon that investigation to include companies that currently own or operate, or formerly owned or operated, hospitals in California, Pennsylvania, Rhode Island, and others.
Senators Whitehouse and Grassley’s letters are linked below:
- Whitehouse, Grassley Letter to Leonard Green & Partners, L.P., Prospect Medical Holdings, Inc. and Medical Properties Trust, Inc.
- Grassley, Whitehouse Letter to Medical Properties Trust
- Grassley, Whitehouse Letter to Apollo Global Management Inc.
- Grassley, Whitehouse Letter to Lifepoint Health Inc.
- Grassley, Whitehouse Letter to Ottumwa Regional Health Center
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