Private equity firms are increasingly snapping up health-care providers in the U.S., which has profound implications for journalists on the health-care beat, according to a panel of experts hosted by the Society for Advancing Business Editing and Writing on July 8.
The panel, sponsored by the Commonwealth Fund, consisted of experts Erin Fuse Brown, a professor of health services, policy and practice at Brown University School of Public Health, Joseph Betancourt, the president of The Commonwealth Fund and a practicing internist, and Chris Cumming, a reporter at the Wall Street Journal. They spoke on the dangers of private equity in health care and how journalists can go about reporting the issue.
The American Medical Association reported that “6.5 percent of physicians characterized their practice as private equity-owned” in 2024. Overall, they noted that 43.3% of physicians work in private practices and 34.5% work in hospital-owned practices.
The Steward Health Care crisis — where a for-profit chain of hospitals filed for bankruptcy after reports by the Boston Globe discovered regulatory failures, inadequate staffing, and equipment shortages — brought light to this issue when its private equity led to the failure of two hospitals that served low-income and rural communities.
“The United States spends the most on health care and has the least to show for it,” Betancourt said. “We have the lowest life expectancy, highest infant and maternal mortality, largest burden of chronic diseases, the largest disparities by geography, by race, by gender. So that makes this all the more challenging, because you’re trying to not cast judgment. Fundamentally, I think we understand that investments are needed.”
What is private equity?
Private equity firms pool money from well-off investors and are typically closely held, meaning that, unlike listed companies, they are much less transparent about their strategies or even the identities of owners or investors in a fund. Brown said that private equity, when acquiring hospitals, is often based on a leveraged buyout, where the funding is “primarily by debt.”
These are usually done by investors through “endowments, sovereign wealth funds, wealthy individuals,” and retirement finances like pension funds, Brown said.
Due to the short investment period of private equity, typically from three to seven years, a private equity fund might “take riskier positions and make riskier management decisions,” Brown said.
Brown also said that strategies — such as cutting costs and staffing to increase revenue — by these general partners who make management decisions, can lead to patient care becoming more expensive.
She said that cutting these costs doesn’t help the patients or medical personnel within the area, but rather is beneficial for the investors. Another strategy is the “roll-up,” where a firm merges several small businesses into a larger company to reduce costs and boost shareholder value.
“A practitioner or a physician is part of a roll-up,” Brown said. “They may see that the sort of style of management and the operations change quite dramatically in that short period of time when private equity invests in their practice.”
In Brown’s words, she said that private equity is “the most extreme form of financialization.”
She said that, often, a hospital or nursing home’s best asset is its property.
“The private equity fund will often sell the real estate out from under the hospital, and then lease it back to the hospital at increasing lease payments, and that’s what caused the financial collapse, for example, of the Steward hospitals,” Brown said.
According to Harvard’s School of Public Health, the move by private equities to target the health care industry was a “natural next step.” The article notes that the “industry is worth nearly $5 trillion in the U.S., offering significant, dependable cash flow.”
“That leads to the financially precarious position for these healthcare entities in the future, so this process of extracting, whether it’s through building up the market power, extracting higher and higher prices,” Brown said. “These are all tried and true tactics.”
Due to the short-term actions by private equity investors, Brown said it doesn’t require the fund to know how to run a hospital for maximum benefit for patients and medical personnel, but rather for the best financial gain.
This has led to advocacy groups, like Take Medicine Back, to rally against corporate interests in health care.
How do reporters cover private equity in healthcare | Tips and tricks
Some advice from the panelists includes looking at medical facilities first instead of private equity, speaking to doctors, and relying on state agencies. These can all be helpful in navigating the industry.
“Private equity is a very difficult industry to cover, because very little about it is made public,” Cumming said.
The purpose of private equity, according to Betancourt, “is to identify areas that are high margin, build inefficiencies, and then try to extract resources.”
“The most valuable thing you can do in covering this as a reporter is to talk with doctors as broadly as you can,” Cumming said.
Cumming said he recommends speaking with medical professionals in emergency medicine. He said that they’ve dealt with issues related to private equity and are usually friendly with reporters.
Eisenberg recommends the Boston Globe’s story, “Inside Steward Health Care: A Boston Globe Spotlight Team report.”
The Boston Globe conducted its investigation by compiling documents from courts, flight records and SEC filings.
Brown said that there has been a push for more reporting at the state level of owners, investors, and related parties. As an example, he noted that the state of Massachusetts has opened a provider registry.
“If you live in a state where there’s an ownership transparency law that has been put in place,” Brown said. “Start to rely on your state government.”
States like New York also have implemented ownership transparency laws, such as its “New York LLC Transparency Act,” which will go into effect in 2026.
Brown also advises going from the ground up instead of top-down when reporting on private equities.
“Rather than starting at the top and trying to figure out which private equity funds are investing in which practices in my region,” Brown said. “Find the name of the platform practice … and then you’ll find, as the practice gets acquired by the U.S. Anesthesia partners, all the anesthesia groups that it acquired then get renamed U.S. Anesthesia Partners.”
