Private equity and hospitals
Private equity and hospitals entail the acquisition of hospitals or medical groups with a negative effect on the quality of medical care.
As explained by The Texas Tribune:[1]
| â | Private equity has become an increasingly dominant force in American health care, snapping up physician practices, hospital chains and whole health care systems with the goal of turning a profit for investors. But itâs moved more slowly into academic medicine, which is built on a model of reinvesting at least some of its revenue into less profitable ventures, like education, research and development.
âThese partnerships with academic health centers and nonprofits are relatively new, and theyâre playing under the radar,â said Eileen OâGrady, healthcare director at Private Equity Stakeholder Project, an industry watchdog. âIt allows a private equity firm to penetrate a market that has historically not been available to PE, and to do so with, I would argue, less financial risk.â |
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Missouri
"Noble Health, a private equity-backed startup whose managers had never run a hospital," acquired two hospitals in rural Missouri. "One year [after an acquisition on March 2012], facing staggering debt and a pile of lawsuits, Noble closed the hospital and another one it owned in neighboring Callaway County."[2]