The letters were sent out to Apollo Global Management, US Acute Care Solutions, Lifepoint Health, Blackstone, TeamHealth, KKR & Co., and Envision, seeking information on emergency department staffing, and corporate practices.
The letters warn that a lack of proper emergency room management could leave the nation vulnerable to mass casualty events, terrorist attacks, or another pandemic.
Private Equity Firm Healthcare Concerns
Private equity firms are investment management companies, and many buy healthcare facilities using mostly borrowed money and some raised by investors. The borrowed money becomes debt against the newly acquired facility, which must then generate enough revenue to pay off the debt. To do this, they usually cut operation costs, reduce staff, perform more costly procedures, and charge higher health care fees to patients, despite the implications these changes may have on patient health.
In a study published late last year in JAMA Network Open, researchers reported that patients receiving care in hospitals owned by private equity firms face an increased risk of falls, infections and other health complications, and were hospitalized for longer periods of time than patients admitted to privately owned hospitals.
Another study, published in 2021, found that nursing homes run by private equity firms faced similar problems, with increased Medicare costs, hospitalizations, and a potential lower quality of care.
Private equity nursing homes also charged residents 4% more, resulting in roughly $1,080 more in annual costs per patient, compared to other care facilities, the study found.
