Bipartisan Senate report slams private equity's "detrimental effects" on hospitals [View all]

Source: CBS News

Updated on: January 7, 2025 / 1:00 PM EST


Two private equity firms' efforts to wring profits out of hospitals in underserved communities put patients in danger, according to a new report released Tuesday by a powerful Senate committee. The 162-page report by the Senate Budget Committee comes as Americans continue to express outrage over the role of corporations in the U.S. healthcare system, following the December killing of the CEO of the nation's largest health insurer. And its findings add to a chorus of lawmakers trying to address the detrimental impact of private equity ownership on critical U.S. hospitals — a subject that has been the focus of a two-year CBS News investigation.

"Private equity has infected our health care system, putting patients, communities, and providers at risk," said Sen. Sheldon Whitehouse, a Democrat from Rhode Island who led the investigation with Sen. Chuck Grassley, a Republican from Iowa. "As our investigation revealed, these financial entities are putting their own profits over patients, leading to health and safety violations, chronic understaffing, and hospital closures," Whitehouse said.

In September, another Senate committee took the extraordinary step of voting to hold Ralph de la Torre, the CEO of Steward Healthcare, in contempt of Congress when he refused to appear after receiving a subpoena. CBS News has documented how he and private equity investors extracted hundreds of millions of dollars from the company prior to it declaring bankruptcy last May.

The Senate's latest investigation unearthed thousands of documents detailing the financial maneuvers of two private equity firms: Leonard Green & Partners and Apollo Global Management. Investigators concluded that the private equity's financial model may pose "a threat to the nation's health care infrastructure, particularly in underserved and rural areas."

Read more: https://www.cbsnews.com/news/senate-report-private-equity-hospitals/