Q&A: Private Equity’s Harmful Impact on Patient Care

Q&A: Private Equity's Harmful Impact on Patient Care

With U.S. Sen. Chuck Grassley

Q: What prompted your bipartisan investigation into private equity's stake in hospital ownership?

A: In the last Congress, I launched a bipartisan inquiry to dig into the impact that private equity ownership of hospitals has had on patient care and rural health care. Specifically, my concerns were prompted following a tragic incident at Ottumwa Regional Health Center, the general acute care hospital in Iowa under private equity (PE) ownership. A male nurse practitioner assaulted incapacitated female patients in 2021 and 2022, before he died from an overdose in the hospital. Evidence of the horrible crimes came to light following an investigation of his death by local law enforcement. Sen. Sheldon Whitehouse, then-chairman of the Senate Budget Committee, teamed up with me to conduct a 13-month investigation of private equity ownership of hospitals.

As Iowa's senior U.S. Senator, I wanted to get to the bottom of the shocking events that undermined confidence in the delivery of care at the local rural hospital in this Iowa community and find out the extent to which adverse impacts stemming from private equity ownership were occurring across the country. Our inquiry sought to collect the facts and shine a light on the often-complex financial arrangements surrounding private equity's ownership of local hospitals. Transparency brings accountability. For nearly two decades, I've leveraged my leadership platforms in the U.S. Senate to push for accountability from large private equity firms and their investments in the U.S. health care system, including the nation's nursing homes. Stemming from my oversight of long-term care facilities when I chaired the Senate Special Committee on Aging, I pushed bipartisan legislative reforms to empower consumers with better information and require public reporting on nursing home ownership and performance, as well as and stiffer penalties to encourage compliance with federal quality standards. Since Nursing Home Compare launched in 1998, I've continued pushing the federal bureaucracy to improve the effectiveness and utility of the website. In 2023, I also urged the Biden administration to implement long overdue rules requiring transparency at long-term care facilities. Foot-dragging by the federal bureaucracy allows private equity stakeholders to continue weaving tangled webs of financial arrangements. And that allows them to evade accountability.

Q: What did your investigation expose?

A: For starters, my investigation thoroughly scrutinized the fall-out and broken promises the Ottumwa community has felt by the impact of private equity ownership on its local health care system. For example, wait times at Ottumwa Regional Health Center went up as patient experience went down. The quality and availability of care dropped significantly, pushing patients to travel longer distances to access health care when they have a hospital in their backyard. Our 162-page report details the harmful impact private equity has had on patients, providers and the entire community. For instance, Apollo-owned Lifepoint Health and its PE-owned predecessors failed to fulfill seven promises first made to the Ottumwa community when the hospital was acquired by private equity owners in 2010, including hospital growth, physician recruitment, charity care, patient satisfaction and more. Our investigation revealed Apollo has made millions in profits while patients and the community have suffered. Lifepoint Health pays Apollo $9.2 million annually to cover management fees while Ottumwa suffers fall-out from operational mismanagement at the hospital, such as inadequate staffing, poor patient experience, lack of specialty services, insufficient care capacity, poor building maintenance and insufficient investment. Throughout my public service, I've found sunshine is the best disinfectant. I'll continue pushing for transparency and needed reforms to ensure our health care system, including in communities like Ottumwa, serves the needs of Iowans and all Americans.

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