In Brief
- Study finds private-equity ownership remains limited nationally, with most investors exiting hospital investments within five years.
- Research is the first to provide a clear picture of private equity’s footprint in the hospital sector.
- Findings don’t determine whether private-equity ownership improves or worsens patient care.
One of the most contentious issues in healthcare today is private-equity investment. Over the past two decades, private-equity firms have acquired hundreds of U.S. hospitals, leading to concerns about how these ownership structures affect patient care, staffing levels, access to care and long-term stability. Recently, Democratic lawmakers introduced the Stop Corporate Takeovers of Physicians Act, which would prohibit private-equity firms, health insurance companies and other for-profit corporations from owning medical practices, among other things.
However, new research from Olin Business School at Washington University in St. Louis shows private equity only accounts for a small share of the nation’s hospitals. The study finds that fewer than 4% of U.S. short-term acute care hospitals were owned by private equity firms in 2024, and most Americans live in hospital markets without a private equity-owned hospital.
“Three Facts About Private Equity in the U.S. Hospital Sector,” published in Health Affairs Scholar, also finds that private-equity ownership typically lasts less than five years, with hospitals frequently sold to other investors or traditional healthcare operators.
Ryan C. McDevitt, a professor of economics at WashU’s Olin Business and Bursky School of Public Health, co-authored the study with researchers from Duke University, the University of California, Berkeley, the University of Illinois Urbana-Champaign and Indiana University.
“Good public policy must start with reliable data,” McDevitt said. “Our research is the first to provide a clear picture of private equity’s footprint in the hospital sector, where incomplete and inconsistent transaction records have complicated efforts to measure the industry’s reach.”
Drawing on six commercial databases, the team of researchers created a standardized framework for deal identification and data linkage, which they say will enable future scholarship to investigate how private-equity investment might influence long-term clinical and operational trajectories of U.S. hospitals.
“Private equity cannot be treated as a monolith. Different deal structures, investors and deal timings can all play different roles in downstream outcomes,” said study co-author Mark Naslund, a graduate student in WashU Olin’s economics doctorate program. “Our data is detailed enough to start untangling those differences.”
The new research establishes three basic facts about private equity ownership of U.S. hospitals: its national market share remains small; ownership frequently changes within a few years; and its geographic reach is limited.
Fact 1: Private equity owns relatively small share of hospital market
Altogether, researchers identified 556 short-term acute care hospitals acquired through 139 private-equity deals between 2000 and 2024. PitchBook, Irving Levin Associates, Preqin, Capital IQ, FactSet and SDC Platinum databases tracked the transactions.
According to the data, private-equity ownership peaked at just under 7% of U.S. short-term acute care hospitals in 2011. The 2006 acquisition of Hospital Corporation of America (HCA), then the nation’s largest for-profit hospital chain, drove a five-year sharp increase in private-equity ownership. When HCA went public again in 2011, the percent of private equity ownership dropped.
Removing HCA from the dataset reveals that private-equity ownership grew gradually from nearly zero in 2000 to about 2% in 2011. Since then, its share has fluctuated between 2% and 4%. In 2024, private equity firms owned 3.5% of short-term acute care hospitals, representing 2.5% of hospital beds and 1.8% of inpatient discharges.
Notably, researchers only tracked private-equity transactions for short-term acute care hospitals. The data to do not speak to private-equity ownership of specialty facilities, physician practices, post-acute care providers or other healthcare sectors.
Fact 2: Private equity ownership is often temporary
Following transactions over time showed that about two-thirds of acquired hospitals changed ownership again within five years of an initial acquisition. Only one hospital in the dataset remained under its original private-equity owner for 15 years.
Among observed exits, initial public offerings accounted for 36% of exits, although that figure was driven overwhelmingly by HCA. Sales to another private-equity firm represented 28% of exits. Non-private equity buyers — publicly traded hospital systems, nonprofit and local government entities, real-estate investment trusts and other for-profit operators — accounted for 24% of sales. Bankruptcy and closure remain uncommon, representing 7% and 5% of exits, respectively, according to the authors.
The findings underscore why researchers examining the consequences of private-equity acquisitions need to track what happens after a transaction, not just who initially buys a hospital, McDevitt said.
Fact 3: Private-equity ownership is concentrated
Finally, the data revealed that private-equity ownership is concentrated in a small number of local markets rather than spread evenly across the country. Private-equity ownership was most prevalent in the mountain west, desert southwest and upland south regions.
In 2023, more than two-thirds of Americans lived in hospital referral regions with no private equity-owned hospital. More than three-quarters lived in regions where private equity-owned hospitals accounted for less than 5% of short-term acute care hospitals.
Finally, no hospital referral region has ever been entirely owned by private-equity firms. Only one region, Texarkana, Arkansas, had a private-equity majority at any point during the study period, the authors noted.
What the findings mean for healthcare policy
The study provides a foundation for a more precise debate about private equity’s role in healthcare, but it does not determine whether private-equity ownership improves or worsens patient care, McDevitt cautioned.
“Ownership alone does not explain the quality of care patients receive. Market concentration, payment incentives, transparency and the ability of patients to choose among providers also influence how healthcare organizations operate,” McDevitt said.
According to McDevitt, policymakers should focus on the factors that drive healthcare outcomes rather than treating private-equity ownership as inherently harmful. Limiting market concentration, improving pricing transparency and making quality and outcomes data easier for patients to understand are three examples of policies that would benefit patients, he said.
McDevitt’s previous research on the dialysis industry highlights how concentrated markets and Medicare payment incentives have contributed to worse outcomes. Here, market structure and incentives may matter more than ownership labels. The goal should be accountability and better patient care, he said.
McDevitt and Naslund hope this study opens the door to future research and discussions about the role of private equity in healthcare.
“Our data is publicly available, as are full details of how we built it. We invite other researchers to use our data in transparent and replicable ways,” Naslund said.
Funding: The paper received research support from Duke University Office of the Provost, Washington University in St. Louis and the American Investment Council, which advocates on behalf of private-equity firms. However, these entities did not review, approve or endorse the research work.
