The human cost of PE’s healthcare boom

Douglas Sacha/Getty Images

Private financiers have cannonballed into the medical space in recent years because—as your insurance company will never admit to you—healthcare is a highly lucrative business in the US, representing 18% of annual GDP as of 2024. To cash in, PE has invested more than $1 trillion in healthcare companies over roughly the past decade, in some cases providing needed resources to strained hospitals and other medical facilities. But since the goal is to juice investors’ returns, private equity is also notorious for doing almost anything in an attempt to turn a profit for owners. That often includes layoffs, which can have lethal effects in an industry tasked with saving lives: After acquisitions, PE-owned hospitals saw a 13% increase in emergency department deaths (compared to similar, non-PE facilities), most likely because full-time staffing at these hospitals fell by 11.6% on average, according to a recent study coauthored by Harvard researchers. The findings track with previous studies linking staff shortages to higher rates of infections at PE-owned inpatient wards and more deaths at PE-owned nursing homes. Many nurses say they’re stretched too thin to properly treat critically ill patients, and reports of dangerous supply shortages abound. In one highly publicized case, a woman died after giving birth at a PE-owned hospital that couldn’t stop her internal bleeding because the necessary supplies were repossessed for nonpayment, the Boston Globe reported two years ago. That hospital was owned by Steward Health Care, a PE-owned company that was the largest private for-profit hospital network in the US before collapsing into bankruptcy in 2024. That year, PE-backed companies accounted for seven of the eight largest bankruptcies in healthcare, according to the Private Equity Stakeholder Project. Closures affect non-PE facilities, too, since they’re often forced to take on additional patients when a nearby hospital shutters. Some states are taking action. Last year, Oregon barred anyone but healthcare professionals from owning a controlling stake in healthcare businesses. Zoom out: Private financiers have similarly chased a boom in pet spending. At corporate-owned clinics, some vets have spoken of pressure to squeeze in more appointments. More morbidly, staffing cuts caused freezers of deceased pets to pile up at some PetSmart stores after the company was bought by a PE firm in 2015, Vice later reported.