Policy Briefs
October 17, 2025
What Happens When Health Care Meets Wall Street?
Private Equity (PE) ownership of hospitals represents one of the most significant and consequential financial shifts in American health care over the last decade. While PE capital has historically been concentrated in physician practices, post-acute care and ancillary services, recent years have seen greater investments in acute care hospitals. Recent studies raise concerns about the long-term implications for patient safety, access to essential services and the sustainability of the hospital safety net.
Growth of PE in Acute Care
Between 2012 and 2022, PE firms invested more than $750 billion in health care acquisitions, with hospitals representing an increasing share of transactions. Currently, more than 8% of all private hospitals in the U.S. are owned by PE firms. Hospitals often targeted by PE include distressed community hospitals, small urban systems and rural providers with valuable real estate assets.
PE firms often seek to maximise profits by pursuing aggressive cost-containment strategies such as shuttering or minimizing unprofitable service lines, reducing staffing ratios and increasing prices—often with the plan to sell the hospital again for returns of at least 20% within three to seven years.
Concerning Patient Care Impacts
Clinical quality findings on PE-owned facilities are concerning. A 2023 study found that hospitals acquired by PE firms experienced a 25% increase in hospital-acquired adverse events such as falls, infections and ulcers, within the first three years of acquisition when compared to the control group. The study also noted differences in patient demographics, suggesting that PE firms target lower-risk populations. Medicare patients skewed younger, fewer patients were dually eligible for Medicare and Medicaid, and these hospitals had higher transfer rates to other acute care facilities.
Two studies looking at Emergency Departments found that PE-owned hospitals reported longer wait times and higher “left without being seen” rates compared to peer hospitals. The most recent study also found 13% higher mortality rates compared to non-PE-owned hospitals. Researchers attribute these trends to staffing cuts and diminished capacity to manage high-acuity patients. These studies also noted an 18% reduction in salaries for ED staff and 16% salary reductions for ICU staff in facilities acquired by PE firms.
Because many PE targets are safety-net-adjacent or sole-community providers, changes to service lines (e.g., obstetrics, behavioral health) ripple across regional access. With over one-quarter of PE-owned hospitals located in rural areas, experts warn that even small shifts in staffing ratios or closures can widen care deserts and increase travel times for emergent care.