Private equity firms are buying up our health care system piece by piece–hospitals, nursing homes, hospice agencies, emergency rooms, specialty practices and more. Health care costs are rising, patient care is in jeopardy, and the federal government is doing nothing to stop private equity firms. Glenn Daigon reports for the Progressive Magazine that states are making it harder for private equity firms to buy health care companies.
As of June 2025, at least 15 states had passed laws to rein in private equity purchases of health care companies, including some red states. The states require that their attorneys general have the ability to review any private equity purchase of a health care group before the purchase can move forward. The attorneys general can then decide whether the purchase will promote the public good and, presumably, block the sale, when appropriate.
Indiana, Oregon and Maine are three of the states that have passed laws reining in private equity. Oregon’s law prevents private equity firms from having ultimate control over hospital hiring, staffing, work schedules and other management activities. Maine has temporarily stopped private equity purchases of hospitals.
Other states have not been successful in controlling private equity firms in the health care space. California’s legislature put forward legislation requiring more transparency and oversight of private equity purchases of health care companies. But, Governor Newsom vetoed the legislation.
When a private equity firm buys a health care company, it tends to act swiftly to take as much money out of the company as possible. Private equity might: force a hospital to cut the number of ER doctors; do little to prevent hospital-acquired infections; stint on protective supplies like masks and cleaning services. Private equity’s goal is to spend less on care and draw out more in profits before selling.
At the same time, private equity raises health care costs for patients. Not surprisingly, the National Institutes of Health reported poor health outcomes for patients and staff in private-equity owned hospitals. After private equity firms bought hospitals, patient falls, infections and other adverse events increased.
To be sure, many health care companies–hospitals, specialty practices, hospice agencies–find a private equity purchase irresistible. Private equity firms pay them a lot of money to turn over control of their operations. Their businesses get a much-needed cash injection, and they can release themselves of the burden of overseeing the administration of their businesses.
As a result, private equity firms now own about one in five for-profit hospitals. Private equity firms owned 5,779 physician practices in 2021, more than seven times the number of physician practices that were private-equity owned in 2012. As of 2019, private equity firms own eight percent of dermatology practices, seven percent of gastroenterology and urology practices, and five percent of ophthalmology practices.
But, not only is private equity jeopardizing patient safety and driving up health care costs, it is leading to health care bankruptcies. In 2024, out of the eight biggest health care bankruptcies, seven were companies that private equity firms owned.
Aditi Sen, Americans for Financial Reform’s managing director of research and campaigns, explains: “It’s not an investment, but an extraction. The profit-seeking that is built into this model is really going to go after cost-cutting as the primary strategy for generating those profits.” That leads to “increased mortality [and] lower quality care.”
Here’s more from Just Care:
- Private equity is destroying ER care
- Avoid private equity-owned hospitals
- Private equity takes advantage of older adults in long-term care homes in Britain
- Patient safety at risk in private-equity controlled emergency rooms
- Private equity buying up specialists and driving up health care costs
