Private equity firms are expanding their healthcare reach by forming joint ventures with nonprofit health systems, according to a new report from the Private Equity Stakeholder Project (PESP).
It's been well reported that private equity has moved to acquire physician groups, specialty practices, nursing homes, and other healthcare entities, but nonprofit joint ventures have gone under the radar, the report suggests.
It documents more than 500 healthcare facilities operated through these nonprofit joint ventures, and notes that this is an undercount because it's based solely on publicly identifiable arrangements.
It might be a surprise to consumers that a private equity entity may have as much as a 49% or even a 97% ownership of a big-name nonprofit hospital, Ryan Leitner of PESP told MedPage Today.
"What we can say with great certainty is that when these joint ventures are formed ... the private equity-backed company has a motivation and even an obligation to investors to make a profit," Leitner said. That takes away resources for patient care, such as healthcare worker pay or investment in equipment.
