The Negative Impact of Private Equity Ownership on Health Systems
A recent study conducted by the Private Equity Stakeholder Project brought to light the negative repercussions of Apollo Global Management’s ownership of two major American hospital systems, ScionHealth and Lifepoint Health. The report paints a concerning picture of the healthcare industry, detailing service cuts, layoffs, poor quality ratings, and regulatory investigations at hospitals owned by Apollo. This comes at a time when private equity hospital ownership is under amplified scrutiny, with both a Senate investigation and a Harvard Medical School-led study pointing to the negative impacts of private equity-backed companies on hospital safety.
Short-term Profits over Long-term Viability
Private equity firms, such as Apollo Global Management, are often criticized for their focus on short-term profit over long-term viability. This business approach can result in excessive debt, cost-cutting measures, worse patient outcomes, and deteriorating working conditions for employees. The report emphasizes these issues, particularly highlighting the impact on workers. Unionized nurses at Apollo-owned hospitals have raised concerns about patient care issues and staff shortages, adding to the growing concern about the impact of private equity ownership on healthcare.
Service Cuts, Layoffs, and Poor Quality Ratings
The study, titled ‘Apollo’s Stranglehold on Hospitals Harms Patients and Healthcare Workers,’ details the harm caused to the healthcare industry by Apollo Global Management’s ownership of Lifepoint Health and ScionHealth. Apollo owns approximately 220 hospitals across 36 states, with Lifepoint employing 50,000 workers and Scion employing approximately 25,000 workers. The acquisition of these health systems has led to service cuts, layoffs, poor quality ratings, and regulatory investigations.
Rising Scrutiny of Private Equity Hospital Ownership
There is a rising scrutiny of private equity hospital ownership, with a Senate investigation launched into the effects of private equity ownership on hospitals, specifically mentioning Apollo’s ownership of Lifepoint. A Harvard Medical School-led study also found that hospitals bought by private equity-backed companies are less safe for patients. This study was developed in conjunction with the American Federation of Teachers and the International Association of Machinists and Aerospace Workers, further emphasizing the concern and attention this issue is receiving.
Apollo Global Management’s Impact on the Healthcare Industry
Private equity investment in healthcare companies can carry substantial risk to patients and healthcare workers, as it may incentivize cost-cutting and risky behaviors that can harm patient care. The report comes amidst rising scrutiny of private equity hospital ownership, with a Senate investigation launched into private equity ownership of hospitals, specifically focusing on Apollo’s ownership of Lifepoint. A new study published in JAMA found an increase in adverse patient events at hospitals purchased by private equity firms. These findings highlight the urgent need for further investigation and possible regulation of private equity involvement in the healthcare industry.