Private Equity Decimation of Hospitals Highlights Harmful Investment Impact
TL/DR –
A report by US Senator Chris Murphy (D-Conn) has highlighted the destructive impact of private equity investment on hospitals in his home state of Connecticut and across the US. According to the report, when three Connecticut hospitals were bought by Prospect Medical Holdings, owned by private equity firm Leonard Green & Partners, the firm started avoiding spending money, leading to a lack of resources for patient care. The report also emphasized that private equity’s detrimental impact on healthcare is not restricted to Connecticut, but is a global phenomenon, with private equity investment driving instability in the sector and harming patient care.
US Senator’s Report Sheds Light on Private Equity’s Negative Impact on Healthcare
A recent report by US Senator Chris Murphy (D-Conn) brings attention to the destructive impact of private equity investment on hospitals. The report focused on three Connecticut hospitals, showing how their purchase by Prospect Medical Holdings, owned by Leonard Green & Partners, led to severe decay in patient care quality.
Prospect Medical Holdings’ Neglect
According to the report, Prospect Medical Holdings avoided spending, which resulted in insufficient resources for treatment, surgery, and building maintenance. This neglect ultimately led to increased patient readmissions and building damages, including collapsing ceilings.
Land Sale Adds Insult to Injury
The situation worsened when Leonard Green & Partners sold the hospital land to a real estate investment firm. The firm then leased the land back to Prospect at high rates, leaving Prospect saddled with “nothing but debt and destruction.”
Private Equity’s Disastrous Impact: A Common Issue
Murphy’s report emphasized that the destructive effect of private equity isn’t limited to Connecticut. For example, the CEO of private-equity backed Steward Healthcare failed to testify on the company’s poor management of a now bankrupt hospital system in 2024. Also, a 2025 report by the Private Equity Stakeholder Project (PESP) outlined the role of private equity in the bankruptcy of Genesis Healthcare, once the largest skilled nursing operator in the US.
Private Equity’s Influence on Global Healthcare
Private equity’s interest in healthcare is a global phenomenon. More information about private equity’s involvement in public services can be found on the NHSforsale site. Briefly, private equity companies prioritize making profits over the wellbeing of a company, its employees, clients, and the communities where they are based.
Private Equity Investment Threatens NHS
Within the UK’s National Health Service (NHS), private equity has sought involvement. Since the Covid pandemic, the government has shown willingness to spend on private sector healthcare services, attracting private equity. These investments range from GP services and ambulance services to staffing agencies.
Private equity’s involvement in the NHS can be curbed by refraining from awarding contracts to private companies.
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