Private equity owns less than 4% of U.S. hospitals, study finds

New research from the Olin Business School at Washington University in St. Louis finds that private equity owns a small share of U.S. hospitals, despite heavy political and public scrutiny of the sector. The study, "Three Facts About Private Equity in the U.S. Hospital Sector," published in Health Affairs Scholar, reports that fewer than 4% of U.S. short-term acute care hospitals were owned by private equity firms in 2024, and that most Americans live in hospital markets without a private equity-owned hospital. The research was co-authored by Ryan C. McDevitt of WashU Olin and researchers from Duke University, the University of California, Berkeley, the University of Illinois Urbana-Champaign and Indiana University, with Mark Naslund, a graduate student in WashU Olin's economics doctorate program, also named as a co-author.

The researchers identified 556 short-term acute care hospitals acquired through 139 private equity deals between 2000 and 2024. Private equity's share peaked at just under 7% in 2011, driven by the 2006 acquisition of Hospital Corporation of America (HCA), then the nation's largest for-profit hospital chain. Excluding HCA, private equity ownership grew gradually from nearly zero in 2000 to about 2% in 2011 and has since fluctuated between 2% and 4%. In 2024, private equity firms held 3.5% of short-term acute care hospitals, representing 2.5% of hospital beds and 1.8% of inpatient discharges. The data do not cover specialty facilities, physician practices, post-acute care providers or other health care sectors.

Ownership is frequently temporary. About two-thirds of acquired hospitals changed hands again within five years, and only one hospital stayed with its original private equity owner for 15 years. Among observed exits, initial public offerings accounted for 36%, though that figure was driven overwhelmingly by HCA. Sales to another private equity firm represented 28%, and non-private equity buyers, including publicly traded hospital systems, nonprofit and local government entities, real estate investment trusts and other for-profit operators, accounted for 24%. Bankruptcy and closure were uncommon, at 7% and 5% of exits, respectively, according to the authors.

Private equity ownership is also concentrated geographically, with the strongest presence 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, and more than three-quarters lived in regions where such hospitals made up less than 5% of short-term acute care hospitals. No hospital referral region has been entirely private equity-owned, and only Texarkana, Arkansas, had a private equity majority at any point during the study period.

The findings arrive as Democratic lawmakers have introduced the Stop Corporate Takeovers of Physicians Act, which would bar private equity firms, health insurers and other for-profit corporations from owning medical practices. McDevitt cautioned that the study does not determine whether private equity ownership improves or worsens patient care, arguing that market concentration, payment incentives, transparency and patient choice also shape outcomes. He pointed to his prior dialysis research as an example, where concentrated markets and Medicare payment incentives were associated with worse outcomes. The authors have made their data publicly available and invited other researchers to use it.