Private equity firms now control 11.9% of all private hospitals in the United States, according to new data from the Private Equity Stakeholder Project.
Clinical Implications of Private Equity Ownership
- Patient Safety Metrics: Peer-reviewed research indicates that facilities managed by private equity firms have demonstrated higher incidences of adverse events, specifically patient falls and hospital-acquired infections.
- Ownership Transparency: Identifying the ultimate parent company of a healthcare facility is increasingly complex due to joint ventures with nonprofit systems, which can sometimes obscure regulatory accountability.
Private Equity Influence Expands in U.S. Hospitals
The latest data indicates that private equity influence in the U.S. hospital sector is expanding. As of this week, 561 of the 4,714 Medicare-enrolled facilities tracked are backed by private equity, an increase from 488 facilities reported in March 2025. This consolidation is concentrated among a small number of investment firms. Apollo Global Management currently oversees 200 facilities through its subsidiaries, Lifepoint Health and ScionHealth, while Welsh, Carson, Anderson & Stowe manages 124.
The business model typically involves acquiring healthcare entities with the intent to optimize operations and divest for profit within a few years. However, this financial strategy has faced scrutiny following the bankruptcies of major systems such as Steward Health Care and Prospect Medical Holdings. These events have prompted increased attention from federal regulators and state legislatures.
Private Equity-Backed Facilities Show Higher Preventable Complication Rates
While some historical studies, such as a 2022 analysis, found no statistically significant difference in outcomes for myocardial infarction patients at private equity-owned versus non-private equity-owned hospitals, more recent data presents a different clinical picture. A 2023 study highlighted that patients in private equity-backed facilities experienced higher rates of preventable complications, including infections and falls.
| Metric | Private Equity-Backed | Non-Private Equity |
|---|---|---|
| Facility Star Ratings (3 stars or less) | Majority | Minority |
| Primary Focus Area | Rehab & Long-term Acute Care | General Acute Care |
| Infection/Fall Rates | Higher (2023 study) | Baseline |
State Legislatures Pass Measures to Increase Oversight
The oversight of these ownership structures remains fragmented. The Private Equity Stakeholder Project reported that they were only able to obtain comprehensive quality ratings for 17% of the private equity-owned hospitals in their tracker. The facilities with available data predominantly scored three stars or less on federal quality metrics, whereas non-private equity facilities generally maintained four to five-star ratings.
Following the financial instability of major health systems, 11 state legislatures have passed measures to increase oversight of private equity deals in healthcare. A 2025 Senate report addressed the impact of private equity on Prospect and Lifepoint Health, as federal investigators increase scrutiny of how private capital influences clinical care standards.
Consult a Doctor If You Observe Quality Concerns
Patients are not required to avoid private equity-owned hospitals, but they should be aware of the facility’s quality ratings when choosing a site for elective procedures or long-term rehabilitation.
If you are admitted to a facility and observe concerns regarding staffing levels, hygiene protocols, or unexplained changes in your treatment plan, you should consult with your primary physician or a patient advocate. If you experience a new infection or injury while in a clinical setting, request an immediate review by the hospital’s quality assurance department.
The Future of Hospital Governance
The intersection of private equity and public health remains an area of active investigation. As joint ventures between private equity firms and nonprofit health systems continue to rise—now accounting for 23% of private equity-owned hospitals—the challenge for regulators will be ensuring that these partnerships do not circumvent existing safety protections.
Whether these legislative efforts will effectively mitigate the risks associated with profit-driven hospital management remains an open question for the healthcare industry.
