Opinion: The quiet rise of private equity in healthcare: What’s at stake?

Modern Healthcare – Wednesday, September 24, 2025
Opinion By Dr. Patrick O’Shaughnessy, president and CEO of Catholic Health of Long Island in New York

Private equity is quietly reshaping the U.S. healthcare system with little oversight, destabilizing hospitals, widening inequities and putting patients at risk. Everyone deserves to know what’s at stake.

Consider a patient who came through our emergency department: A frail, elderly woman who had been visiting a local urgent care clinic, one of the many privately backed centers cropping up across the New York metropolitan area. Those visits were brief, fragmented and disconnected from her medical history. Her worsening chronic conditions went unnoticed until she collapsed at home. By the time she reached us, she was in early-stage congestive heart failure and required immediate, life-saving intervention. This wasn’t care, it was a crisis. And it illustrates the dangers of a system built around profits rather than patients.

Private equity has been buying up healthcare entities at a rapid pace. In 2024, firms completed more than 1,000 healthcare deals, according to the nonprofit Private Equity Stakeholder Project. And the trend is far from slowing, with 2025 projected to bring more private equity expansion into healthcare. On paper, this looks like growth; in reality, it drains resources from communities.

Hospital consolidation is reshaping care delivery nationwide, raising concerns about patient access and community health. Under the federal Emergency Medical Treatment and Labor Act, all Medicare-participating hospitals with emergency departments must stabilize and treat anyone arriving at their ERs, regardless of ability to pay. This issue is compounded by the fact that most U.S. community hospitals are nonprofit. In New York, state law further restricts hospitals to nonprofit or government ownership.

Nonprofit hospitals take on obligations beyond treating everyone who comes through their doors. They must reinvest in community health, provide charity care to those who cannot afford it and train the next generation of clinicians. Unlike investor-owned facilities, their primary accountability is to patients and communities.

Private equity clinics operate differently. They accept patients with good insurance who need procedures in high-margin specialties such as cardiology, orthopedics and elective surgeries — the very service lines and procedures nonprofit hospitals rely on to offset the costs of essential but less-profitable programs like behavioral health, substance use treatment and emergency medicine.

When private equity siphons away these services, it destabilizes hospitals and undermines their ability to sustain vital programs our communities rely on. At the same time, privately backed practices can lure physicians with compensation packages that nonprofits cannot match.

These PE-backed providers do not run emergency departments, sustain pandemic response efforts or invest in public health. They have no obligation to their communities, and if the money isn’t there, they leave. When nonprofit hospitals eliminate services or close due to economic challenges, including the influence of private equity, they rarely reopen, often leaving entire communities without access to comprehensive, holistic care.

Some will argue that private equity brings efficiency or rescues struggling practices. That may be true for margins, but left unchecked, it cannot solve healthcare’s fiscal cliff — the point where rising costs and shrinking reimbursements threaten hospitals’ and health systems’ financial stability. Instead, private equity’s growing influence is reshaping the nation’s healthcare system in ways that risk putting financial considerations ahead of patient needs.

We need to close regulatory loopholes, ensure transparency and level the playing field so nonprofit hospitals can continue their mission. This is not about stifling innovation or competition. It’s about ensuring everyone has access to care when and where they need it. When the rules reward profits over patients, everyone loses, especially those with nowhere else to turn.

Let’s confront this reality before it’s too late.

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