The Senate Budget Committee, led by Ranking Member Chuck Grassley and Chair Sheldon Whitehouse, has launched a bipartisan investigation into the effects of private equity ownership on hospitals in the United States. In their inquiry, the committee has sent letters to the CEOs of several companies, including Apollo Global Management, Lifepoint Health, Medical Properties Trust, Leonard Green & Partners, Prospect Medical Holdings, and Ottumwa Regional Health Center, a for-profit hospital in Iowa.
The senators are seeking answers regarding questionable financial transactions that may have had an adverse impact on the quality of care provided in hospitals under private equity ownership. They are particularly concerned about staffing reductions, substandard healthcare, and the loss of valuable assets, such as real estate, that has left hospitals burdened with debt. Grassley and Whitehouse are demanding documents and detailed explanations about related-party transactions and the extent to which private equity firms exert control over these hospitals.
Ranking Member Grassley expressed his concerns about a business model that prioritizes profits over patient care and safety, stating, "When it comes to our nation's hospitals, a business model that prioritizes profits over patient care and safety is unacceptable." He cited the events at Ottumwa Regional Health Center, a hospital in Iowa, as the catalyst for his investigation. Grassley aims to ensure that rural areas, like Ottumwa, receive the highest quality of care and that financial maneuvers by private equity firms do not compromise patient resources.
Chairman Whitehouse echoed these concerns, highlighting the negative outcomes for patients that have been observed as private equity enters the healthcare industry. He described a familiar pattern where private equity firms purchase hospitals, burden them with debt, reduce operating costs by cutting services and staff, and then sell the hospitals for profit, leaving communities to deal with the aftermath.
The investigation was prompted by a series of disturbing events at Ottumwa Regional Health Center. In 2010, the formerly nonprofit hospital was sold to a private equity firm, and in March 2023, a nurse practitioner assaulted nine sedated female patients before fatally overdosing on the hospital's premises. Grassley's initial inquiry sought information on the hospital's financial stability and the potential contribution of related-party transactions to these alarming events. Unsatisfied with the responses received from the companies involved, Grassley decided to expand the investigation to include hospitals in California, Pennsylvania, Rhode Island, and others.
The Senate Budget Committee's investigation aims to shed light on the impact of private equity ownership in hospitals and address the concerns surrounding the prioritization of profits over patient care. Grassley and Whitehouse are determined to ensure that the nation's hospitals provide high-quality healthcare to the communities they serve.
To find out more, go to this link: https://www.budget.senate.gov/ranking-member/newsroom/press/senate-budget-committee-digs-into-impact-of-private-equity-ownership-in-americas-hospitals
