Private Equity Eats the Health Care System

Apr 14, 2025

Private equity companies and hedge funds destroyed Sears, Toys ‘R’ Us, Payless Shoes, RadioShack and many other retailers by buying them up and sucking out the money they needed to operate. These parasites have found a new target: health care.

In 2010, the same Cerberus Capital Management that helped destroy Chrysler bought six Catholic hospitals in Massachusetts. They founded a new for-profit hospital company, Steward Health. Then, the company sold the land the hospitals were located on, so they had to start paying rent. Steward used the money from the sales to buy up more facilities and run the same scam.

To pay rent on land they had long owned, the hospitals cut money from staffing, building repairs, and even cleaning sheets. Patient death rates for common conditions climbed sharply.

In May of 2024, Steward filed for bankruptcy, closed two hospitals, and announced plans to sell 31 others—but meanwhile, Cerberus walked away with a profit of 790 million dollars from the deal.

Private equity companies like Cerberus now own over 450 hospitals in the U.S. and oversee more than one third of staffing in U.S. emergency rooms. They’ve been buying up nursing homes and all kinds of specialized medical facilities.

Wherever they go, care gets worse. One study found that, after hospitals were acquired by private equity firms, Medicare patients were more likely to suffer falls and contract bloodstream infections. In some of them, patients were “forced to sleep in hallways, and doctors who spoke out were threatened with termination,” according to a former president of the American Academy of Emergency Medicine. Another study found that if private equity acquired a nursing home, its residents became eleven percent more likely to die.

That is 21^st century capitalism in a nutshell: making profit by destroying the basic services we all need.