News from the Wall Street Journal and STAT News revealed the growing trend from private-equity firms exerting their power in the U.S. health care system – and boosting their profits. The articles underscore how private-equity firms are expanding their reach into hospitals and traveling nursing programs across the country – and cashing in.
Add this to the list of reasons why the protections for American patients and families recently implemented through the No Surprises Act will be more important than ever going forward, particularly as private-equity firms and out-of-network providers try to undo essential patient safeguards to shield their own profits by fighting the protections in the courts.
From STAT: Private-equity firms are cashing in on the travel nursing business that has boomed during the pandemic
- “The demand for nurses has made so-called travel nursing a lucrative business — and private-equity firms have taken notice. Some firms, like Leonard Green & Partners and Ares Management, have longtime investments, and others want in on the action, too. Since the beginning of 2021, at least eight private-equity firms have bought at least seven staffing agencies, according to a STAT analysis.”
- “In roughly the first eight months of 2021, the investment bank Capstone Partners estimated there were 30 mergers and acquisitions of health care staffing companies.”
- ‘“This is about our suspicion that there is a Wall Street angle here with private equity buying up these employment agency firms and then exploiting the public health crisis,’ Rep. Peter Welch (D-Vt.) told STAT in an interview.”
To read the full article, click here.
From WSJ: How a Small Alabama Company Fueled Private Equity’s Push Into Hospitals
- “Private-equity firms have been buying hospitals in increasing numbers over the past decade.”
- “Medical Properties Trust Inc. was willing to buy the bricks and mortar, and lease the facilities back to the hospital operators. That provided financing for the deals and helped some of the private-equity firms take money out of their investments.”
- “The real-estate investment trust, or REIT, offered investors an appealing story: It had long-term leases with tenants that provide essential services, and it paid a lucrative dividend.”
- “Yet as the company grew fast and bought more properties, it faced large losses at its biggest tenant, financial filings show.”
- “Steward Health Care System LLC accounted for 30% of the company’s revenue in 2020, according to a filing by MPT with the Securities and Exchange Commission. Steward lost more than $800 million between 2017 and 2020, its financial statements show, with Covid-19 adding to its financial challenges.”
- “Since the pandemic began, MPT has struck a series of deals involving Steward and its chief executive that together resulted in hundreds of millions of dollars flowing from MPT to Steward.”
- “Former MPT employees familiar with the company’s transactions said they saw deals with Steward as a way for MPT to provide it with cash as it notched losses, which in turn helped Steward make its rent payments and kept MPT growing.”
To read the full article, click here.
To learn more about the importance of No Surprises Act’s consumer protections, click here
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