For most patients, who owns the hospital is probably the last thing on their mind when they arrive in an emergency room. But a growing body of research suggests ownership can shape decisions involving staffing, spending, services, and even the conditions under which doctors and nurses provide care.
Private equity firms raise money from investors and use it to acquire businesses, improve their financial performance, and eventually sell those investments. In healthcare, that model has increasingly reached hospitals, physician practices, emergency medicine groups, nursing homes, and other providers.
Supporters say private capital can give healthcare organizations money and management expertise they might not otherwise have. Kelly Arduino, a healthcare management executive, pointed to technology as one area where investment can help.
“Private equity has made a tremendous amount of investments in health technologies,” Arduino said. “That’s where we would see the biggest success.”
Former Federal Trade Commission Chair Lina M. Khan has also acknowledged that investment itself is not necessarily the problem.
“Private investments can sometimes be an important source of capital, especially for small to mid-sized companies that can benefit from the access that this financing provides,” Khan wrote in 2024.
The concern is what can happen when the financial structure of a deal creates pressure to pull more money from a healthcare organization while simultaneously cutting costs.
According to a 2025 study published in the Annals of Internal Medicine, researchers examining private equity hospital acquisitions found that emergency department salary spending fell 18.2 percent and ICU salary spending fell 15.9 percent relative to comparable hospitals. Hospital-wide employment declined 11.6 percent. Researchers also found seven additional deaths per 10,000 emergency department visits after acquisition, while transfers to other acute care hospitals increased. The authors cautioned that unmeasured factors could have affected the results.
That matters because healthcare is unusually sensitive to staffing. Cutting administrative expenses at an ordinary company may affect convenience or productivity. Reducing hospital staffing can mean fewer people available to monitor patients, answer alarms, administer medication, assist someone at risk of falling, or notice subtle changes in a patient’s condition.
Another major Medicare study published in JAMA examined more than 660,000 hospitalizations at private equity-acquired hospitals and found a 25.4 percent increase in hospital-acquired conditions after acquisition compared with matched control hospitals. The increase was driven largely by falls and central line-associated bloodstream infections.
The pressure can also reach physicians.
“I think where private equity has struggled the most is in dealing with a lot of professional services providers. So that would be physician practices,” Arduino said.
Robert Andrews, CEO of the Health Transformation Alliance, described how productivity demands can change a doctor’s day.
“The doctor who’s had four or five appointments per hour … now has seven,” Andrews said.
For patients, that can translate into shorter visits and less time for questions or complicated symptoms. For physicians, Andrews said, the pressure can erode the independence that traditionally comes with practicing medicine.
“They feel like their professional autonomy has been robbed from them,” he said.
Anesthesiologist Dr. Patricia Martin described the tension even more sharply.
“They’re not in the business of providing the best medicine. They’re in the business of providing good-enough medicine for the largest number of people,” Martin said.
Private equity is not the only force driving consolidation, staffing pressure, or physician burnout in American healthcare. Hospitals across ownership models face reimbursement challenges, labor shortages, rising supply costs, and intense financial pressure.
Arduino cautioned against blaming every struggling hospital on its investors.
“When I look at the hospitals that have struggled or failed, it’s not a function of private equity. It’s a function of long-term mismanagement, operational challenges, disconnected systems, and poor reimbursement,” she said. “The hospital business is super hard.”
Still, debt can make an already difficult business more fragile. Private equity acquisitions frequently rely on borrowed money, and in leveraged transactions the acquired healthcare company can ultimately be responsible for servicing significant debt.
A 2025 JAMA Health Forum study examining hospitals that had already passed through private equity ownership found concerning financial outcomes when hospitals were later sold to another private equity firm, although researchers emphasized the relatively small number of hospitals studied.
Asset sales create another risk. A hospital can sell its land or buildings to an outside real estate company and then lease the property back. The transaction produces immediate cash, but the hospital gives up property it once owned and assumes a continuing rent obligation.
Steward Health Care became the most visible warning about how complicated those financial arrangements can become. Steward filed for bankruptcy in May 2024 after operating hospitals across several states. A bipartisan Senate investigation subsequently examined management decisions, hospital finances, property transactions, staffing, and patient care.
The Steward experience does not establish that every private equity-owned hospital will suffer the same fate. It does illustrate what can be at stake when a hospital loses financial flexibility. Unlike an ordinary company, a hospital cannot simply reduce service without consequences for communities that may depend on its emergency room, maternity ward, trauma services, or intensive care unit.
Khan has similarly distinguished between different investment strategies.
“Some private equity firms take a more long-term view and focus on creating real operational improvements to generate value in ways that provide broader benefits.”
The question, then, is not simply whether investors should make money from healthcare. It is what financial incentives reward them for doing.
Andrews put the issue plainly: “If you incent primary care practices to rush people in and out the door, that’s what they’ll do,” he said. “If you incent them to spend time, understand what’s going on with the patient, and reward them when the patient’s healthier, that’s what they’ll do.”
For patients, those incentives are not an abstract Wall Street debate. They can influence how many nurses are working, how much time a physician can spend in an exam room, whether equipment gets replaced, whether essential services remain open, and whether a hospital has enough financial breathing room to survive the next crisis.
