Housing rights activists and tenants protest evictions and poor apartment conditions outside the office of owner Broadway Capital on April 25, 2022, in Chelsea, Massachusetts.
Brian Snyder | Reuters
For years, Conemaugh Health System, a chain of hospitals in central and western Pennsylvania, was a nonprofit entity that served small towns such as Johnstown, Hastings, Meyersdale and Roaring Springs. Services are provided to patients in the community. Today it is a for-profit system owned in part by Apollo Global Management, one of the largest private equity firms in the United States.
Three patients said care at the health system has declined since a 2018 ownership change involving a hospital chain called LifePoint Health. One of them is Paul Ricci, 53, who works in a home for the mentally retarded and edits Johnston’s Allegheny Independent Media in his spare time, “A non-fluff website He calls it news and analysis from the Allegheny region of Pennsylvania. Recently, he and his father experienced overnight waits at the emergency room, where it was difficult to reach someone who could answer billing questions.
He told NBC News that the involvement of a large New York City-based private equity firm in Conemaugh was not widely known when it happened. “There are the same people in the hospital,” he said. “I didn’t know care would be different.”
Like many American consumers, Rich came to understand The Impact of Private Equity Firms Like Apollo on Healthcare. Over the past decade, these companies have spent $1 trillion acquiring health care companies across the country, often burdening them with debt and hoping to sell them at a profit within three to five years. Critics say the profit motive in acquiring nursing homes, hospitals, doctor’s offices and health care staffing companies conflicts with diligent patient care, and the companies and their acquisitions are under intense scrutiny from the government. legislatorantitrust Executor and patients.
For example, LifePoint Health is one of two topics Senate inquiry Focus on whether financial transactions like this company May harm patient. Apollo and LifePoint said they welcomed the review. Conamo did not respond to an email seeking comment.
In recent years, private equity firms have taken over much of the nation’s economy, well beyond health care. The purchases involved supermarkets, child care, senior living centers, fast food restaurants, rental housing and pet care providers. Consumers often don’t know that private equity firms own the companies they patronize because the companies don’t put their names on the nursing homes, hospitals, veterinary clinics and apartment buildings they own.
But these companies can be spread across a wide range of industries—NBC News, for example, recently estimated that 40% of emergency departments nationwide are run by staffing firms owned by private equity firms. Scholars say private equity-backed companies could own 40% of the nation’s single-family homes by 2030, according to a recent MetLife forecast, and such purchases are already driving up housing costs for local renters in many areas. .
New research on private equity stakeholder projects Non-profit organizations The organization advocates for greater transparency and regulation of the industry and aims to help consumers, lawmakers and regulators identify the dominance of private equity firms in four key sectors of the economy: health care, housing, jobs and pensions. This analysis is called the Private Equity Country Risk Indexdetails private equity participation in these areas in all 50 states.
For example, Arizona and Georgia rank high for housing risks associated with large private equity purchases of rental homes; New Mexico and West Virginia rank high for financier-led health care businesses. The study noted that the impact on workers and employment is greater in Alabama and Massachusetts, while Washington, Louisiana and Michigan have higher pension risks due to private equity investments.
Chris Noble, policy director for the Private Equity Stakeholder Project, said the index shows “the private equity threat in our backyard and gives state leaders the tools to protect the people they serve.” “By providing transparent data on the risks associated with private equity investments, we empower communities, working families and policymakers to advocate for change and protect their countries from the threats posed by unchecked private equity firms.”
More falls and infections
The American Investment Council, a lobbying group for the private equity industry, said its members’ acquisitions improve the industries in which they invest.This includes health care, it says. “Private equity investments consistently deliver high-quality, affordable health care to patients across the United States,” the committee wrote in a recent letter to federal regulators.
However, independent academic research shows that private equity ownership of nursing homes, hospitals and doctor’s offices can harm patients.one study Death rate among residents of nursing homes owned by private equity is 10% higher, study shows other showed that patients at the company’s hospitals experienced more adverse events, including more falls and more infections.
The new state risk index shows that only 3.2% of hospitals in Pennsylvania are controlled by private equity firms, far lower than the nearly 25% of hospitals in New Mexico controlled by private equity firms. But Pennsylvania hospital readmission rates after discharge are 5% higher than nationally Averageexpressed by risk index.
Although private equity participation in Pennsylvania’s health care sector has been relatively low, the state has experienced high-profile issues in recent years related to the industry’s acquisition of some hospitals.Take Crozer Health, an embattled four-hospital hospital system Located near Philadelphia and part of Prospect Medical Holdings. Prospect has 16 safety net hospitals — Those — which serve low-income patients typically covered by Medicaid — are located in four states and were backed by private equity firm Leonard Green & Partners between 2010 and 2021. Struggling under a heavy debt load, Crozer failed to pay its suppliers and shut down some services. Employees told NBC News; Prospect and Crozer are being sued by the Delaware County Foundation, a community foundation established in 2016 when Prospect acquired the health system.
Frances Sheehan is president and CEO of the foundation, which oversees Prospect’s management of Crozer to ensure it complies with the terms of the agreement. “We are the only entity that can hold Prospect accountable,” Sheehan said in an interview. “Prospect has made significant acquisitions of health systems in Rhode Island, Connecticut, Pennsylvania and California, with the goal of draining as many resources as possible from the systems under the guise of turning around the health systems.”
Leonard Green and Prospect’s minority investors reportedly withdrew $650 million in dividends and fees before selling the company in 2021, even as Crozer’s performance declined. Research Provided by the Private Equity Stakeholder Project. Prospect Medical is also one of its companies investigation Sen. Sheldon Whitehouse, D-R.I., said, according to NBC News.
“Everyone wants Prospect to leave and give us a chance to rebuild,” said Peggy Malone is a behavioral health nurse at Crozer-Chester Medical Center and president of the Crozer-Chester Nurses Association.she has testify She served in the Senate for 36 years and understands the impact Prospect has had on her hospital.
“The plaster was crumbling, the air conditioning didn’t always work, the supplies were of poor quality and the equipment was broken,” she said. “It was a very vibrant hospital – it’s really heartbreaking to see it disappear.”
A spokesman for Crozier did not respond to a request for comment. Prospect paused litigation with the Delaware County Foundation in February by agreeing to try to sell Crozer to a nonprofit in the coming months.
Neither Prospect nor Leonard Green responded to requests for comment.
“asphyxia”
In recent years, private equity-backed companies and other large corporate landlords have taken over more single-family homes in metro Atlanta’s five core counties than anywhere else. Tyler SheltonAssistant Professor of Earth Sciences at Georgia State University. He conducted extensive research on large corporate landlords and found that in Fulton County alone, the inventory of single-family homes owned by these landlords more than doubled from 3,169 units in 2018 to 6,429 units in 2023.
“This is a problem of crowding out potential homebuyers, and the impact on tenants includes raising rents, filing for evictions as quickly as possible, and generally neglecting maintenance in a variety of ways,” he said in an interview. “Georgia The state’s landlord-tenant laws are arguably the worst of any state in the United States. Formal protections are largely absent from the law. The municipalities don’t have any control over this, which is why these companies invest here. ”
Alison Johnson, an Atlanta tenant, said rents in Atlanta have increased significantly. Housing Justice Allianceis an Atlanta nonprofit organization that organizes tenants and provides eviction defense services. “They had us by the throat,” she said. “They buy so many homes here, they can manage the market. They can tell us what the rents are in the areas where they absorb all the housing.”
The PESP State Risk Index shows that about 17% of homes in Georgia are purchased by medium, large and very large investors, a 62% increase since 2018. Arizona and Nevada also attract private equity and corporate landlords. The index shows that about 13.8% of homes in Arizona were purchased by these investors, a 79% increase from 2018. The holdings of these Nevada investors have increased by 83% since 2018; their holdings now stand at 13.1%.
The PESP State Index reports that Massachusetts ranks high when it comes to the impact of private equity on employment, with these financiers employing 9% of the private sector workforce. Since 2018, this number has increased by nearly 20%. Massachusetts is also among the 10 states with the highest number of employee deaths or hospitalizations among private equity-controlled employers (91 between 2018 and 2022) as a share of the total private-sector workforce.
“The Private Equity Stakeholder Project’s new Country Risk Index is a powerful tool in holding private equity accountable,” Sen. Elizabeth Warren, D-Mass., said in a statement. “Together we are tackling this multi-trillion-dollar behemoth, It’s hurting working people and sucking money away from other parts of the economy.”