Republished with full copyright permissions from The San Francisco Press.

Last week, Senators Sheldon Whitehouse (D-R.I.) and Chuck Grassley (R-Iowa) launched an investigation into the secretive world of private equity and its influence on healthcare, particularly focusing on the impact of financial transactions on patient care in hospitals owned by private equity firms.

Private equity investors have heavily invested in healthcare acquisitions, with reports from the American Hospital Association revealing that private equity firms account for a significant portion of physician practice acquisitions. This presence extends to rural areas, as private equity firms currently own a substantial number of hospitals in such locations.

The investigation centers around private equity firms and related entities, seeking to shed light on their financial activities and their potential effects on hospital operations, patient care, and staff retention. The senators have reached out to various organizations within the private equity healthcare sphere, including Leonard Green & Partners, Apollo Global Management, Medical Properties Trust, Prospect Medical Holdings, Lifepoint Health, and Ottumwa Regional Health Center, requesting documentation and information to uncover the true impact of private equity ownership on hospitals.

The senators’ concern is drawn from reports and studies that suggest private equity ownership may prioritize profit over provider retention and patient safety, resulting in increased costs and compromised care. The recent and particularly notable incident at Ottumwa Regional Health Center, involving a nurse practitioner’s assault on sedated patients, further prompts critical questions about the implications of private equity transactions on hospital operations and patient care.

This investigation is not limited to a specific geographic area, as private equity deals impacting hospitals in various states are under scrutiny. The senators aim to unravel the potential negative outcomes associated with private equity involvement in healthcare and hold accountable those involved in questionable financial practices.