Private equity is expanding its reach into troubled hospitals, and more than a third of those it owns serve struggling, rural populations.
That’s according to a report released Wednesday amid questions as to whether private equity’s growing involvement benefits or harms a sector still grappling with higher costs and staff shortages, Bloomberg reports. At least 386 US hospitals are now private equity-owned, according to a new tracker from advocacy group Private Equity Stakeholder Project, with stewardship concentrated among a few firms including Apollo Global Management and its systems LifePoint Health and ScionHealth.
Private equity has drawn plenty of attention in a variety of industries for its short-term horizon and its playbook of cutting costs, adding debt and taking out cash to pay investors.
But health care isn’t a typical business. Hospitals are heavily regulated and get a significant amount of their income from government programs that don’t pay as much as private insurers. That’s especially true for rural hospitals, where declining and aging populations are heavily dependent on Medicaid and Medicare coverage and staff shortages are particularly dire. Read more.
