Most private equity firms that buy U.S. short-term acute care hospitals sell them within five years, and PE-owned hospitals made up less than 4% of the market in 2024, according to a study published Sept. 10 in Health Affairs Scholar.
Researchers from Washington University in St. Louis, Duke University in Durham, N.C., the University of California, Berkeley, the University of Illinois Urbana-Champaign and Indiana University Bloomington ran the analysis. They used a public dataset of PE hospital acquisitions that combines six commercial deal databases and checks them against news releases, Securities and Exchange Commission filings and local news reports.
The dataset covers 556 short-term acute care hospitals bought in 139 PE deals between 2000 and 2024. Only majority-stake leveraged buyouts were counted. Specialty facilities, physician practices, post-acute providers, minority investments, joint ventures and management contracts were left out.
Here are five things to know from the study:
1. Most PE owners sell within five years. By year five, about 2 in 3 acquired hospitals had a new owner, and the typical ownership period was five years. Only one hospital stayed with its original PE buyer for the full 15 years.
2. The share of hospitals owned by PE peaked at just under 7% in 2011. That peak came mostly from the 2006 buyout of Nashville, Tenn.-based HCA Healthcare. After HCA’s 2011 IPO, the share fell below 3%. It has stayed between 2% and 4% ever since and has not grown since 2018.
3. In 2024, PE-owned hospitals made up 3.5% of hospitals, 2.5% of beds and 1.8% of inpatient discharges.
4. IPOs made up 36% of exits, but HCA accounts for more than 85% of those. The next most common exits were sales to another PE firm (28%) and sales to buyers outside PE (24%), such as for-profit and nonprofit health systems and REITs. Bankruptcy made up 7% of exits and closure 5%.
5. In 2023, more than 2 in 3 Americans lived in hospital referral regions with no PE-owned hospital. More than 3 in 4 lived in regions where PE owned less than 5% of hospitals. Only one region, Texarkana, Ark., ever had PE own more than half of its hospitals, peaking at 67%. PE ownership is most common in the Mountain West, the Desert Southwest and the Upland South.
The authors said their analysis describes ownership patterns only. It does not look at how PE ownership affects quality, cost or access to care, and research on those questions is still “active, and at times conflicting.” They also said PE options may be the only ones available for some service lines in certain markets, and that this should be studied further.
The study was funded in part by the American Investment Council, which advocates on behalf of private equity firms. The council had no role in the study’s design, analysis or interpretation and did not review it before submission, according to the authors.
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