Two US senators, Sheldon White house and Chuck Grassley, have initiated a bipartisan investigation into the involvement of private-equity firms in the nation’s health care. The inquiry focuses on assessing the profits generated by these firms through complex financial arrangements and determining whether these deals have had adverse effects on patients and clinicians.
The investigation began when Grassley requested information from Apollo Global Management, a private-equity giant that owns Ottumwa Regional Health Center in southeast Iowa. The facility gained attention when a male nurse assaulted sedated patients in 2021 and 2022, leading to the nurse’s eventual overdose.
With White house joining the investigation, the scope expanded to include private-equity deals affecting two hospitals in Rhode Island. The transactions involve Prospect Medical Holdings, an operator of 16 safety net hospitals. Senate investigators are particularly interested in deals involving Prospect Medical’s ownership of Our Lady of Fatima Hospital and Roger Williams Medical Center.
The senators expressed concerns about private-equity firms prioritizing profits over patient care, often leading to facility closures, compromised care, and staff reductions. Private-equity firms have increasingly ventured into health care over the past decade, spending $1 trillion on acquisitions, including hospitals, nursing homes, and other health-care businesses.
Studies show that private-equity firms’ involvement in health care is associated with significant cost increases for patients and a lower quality of care. The senators’ letters to the involved parties emphasize the potential negative outcomes for both frontline medical providers and patients due to private-equity ownership.
The investigation seeks to shed light on deals involving Lifepoint Health, owner of Ottumwa Regional, and its owner, Apollo Global Management. Additionally, letters were sent to Prospect Medical, Leonard Green & Partners, and Medical Properties Trust, seeking information about complicated financial arrangements that allowed firms to extract money from hospital systems.
Private-equity deals in health care have been criticized for burdening acquired companies with debt, slashing costs to increase earnings, and potentially compromising patient care. The senators aim to address these concerns and evaluate the impact of private-equity ownership on the delivery of health care in the United States.
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