Private equity can affect people through the businesses it buys, including healthcare providers and employers—but the evidence does not show that every private-equity investment harms every patient or worker. A 2023 review of 55 studies found the clearest recurring association in healthcare was higher costs for patients or payers; findings on care quality ranged from mixed to harmful. Evidence about workers is more complicated, and hospital-system consolidation should not be mistaken for private-equity ownership.
What private equity can change for patients and workers
Private-equity firms invest in companies, often with the intention of improving their value and eventually selling their stakes. When the acquired business provides healthcare or employs people, changes in financing, staffing, services, or ownership can matter well beyond investors. But the effects depend on the sector, the company, the transaction and the outcome being measured.
A 2025 review article describes strategies discussed in the literature: placing debt on an acquired facility or practice, reducing labor costs, shifting services toward more lucrative offerings, changing coding in ways that may raise prices, consolidating operations, closing facilities, or selling them. These are possible mechanisms reported in the literature—not a checklist of actions taken by every firm, nor proof that any one strategy caused a particular patient or worker outcome.
What the healthcare evidence says about costs and quality
A 2023 systematic review in The BMJ examined 55 studies, most of them about U.S. healthcare operators. Nursing homes were the most frequently studied setting. Across the outcomes assessed, private-equity ownership was most consistently associated with increased costs to patients or payers. Findings on quality were mixed to harmful; some studies reported lower nursing-staff levels or a shift toward a lower nursing skill mix.
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That is a pattern across studies, not a universal result or a guarantee about any particular provider. The review also cautioned that risk of bias and the concentration of research in the United States limit how confidently the findings can be applied. A price change, a staffing measure and a clinical-quality measure are different outcomes; evidence about one does not automatically establish the others.
What is known about nursing homes
The U.S. Government Accountability Office estimated that 5% of approximately 14,800 Medicare-enrolled nursing homes had private-equity owners in 2022. That estimate used Centers for Medicare & Medicaid Services ownership data supplemented with other sources: CMS data alone did not identify private-equity owners.
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Ownership data had gaps. GAO found that many facilities did not list all their owners, so the estimate should not be read as a complete federal census of private-equity ownership. It is a 2022 estimate for Medicare-enrolled nursing homes, not a rate for all U.S. nursing homes or healthcare providers.
Why hospital-affiliation statistics are not private-equity statistics
Physician practices have also become more connected to larger healthcare organizations, but that trend cannot simply be attributed to private equity. GAO reported that at least 47% of physicians were employed by or affiliated with hospital systems in 2024, compared with less than 30% in 2012. Those figures measure hospital-system affiliation, not private-equity ownership.
GAO said hospital-system consolidation can increase spending and prices, while evidence on quality varies and effects on access are unclear. It found less evidence about private-equity-specific effects in physician practices. Without distinct evidence about the owner and transaction, hospital-system trends should not be presented as proof of private-equity effects.
What the evidence says about workers
A June 2025 U.S. Census Bureau Center for Economic Studies working paper complicates a uniformly negative account of private equity and employment. Using transaction information linked to matched employer–employee data, its authors reported no evidence that private-equity-backed firms varied wages or employment according to proxies for local labor-market power. They also reported that wage losses were similar for managers and top earners.
The paper instead found downsizing at less productive plants and reallocation of higher-wage workers to more productive plants. The authors interpreted the post-buyout wage and employment patterns as consistent with productivity incentives and monitoring. This is one working paper’s result, not evidence that every worker, firm or industry has the same experience, or that job losses are immaterial to affected communities.
How to read the headline claim
The available findings do not establish one statistic for private equity’s effect on all Americans across healthcare, housing, employment, pensions and other parts of life. The evidence is strongest and most concentrated in healthcare, where the recurring cost association and mixed-to-harmful quality findings warrant scrutiny, but study limitations matter. Worker evidence is sector- and study-dependent, and the Census Bureau paper provides a counterpoint to a one-sided conclusion.
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When assessing a claim about a particular deal or company, check what it actually concerns:
- Sector and service: A nursing home, physician practice and manufacturing plant do not face the same risks or measures of success.
- Owner and transaction: Private-equity ownership is not interchangeable with hospital-system affiliation or other forms of corporate consolidation.
- Outcome: Prices, staffing, care quality, access, wages and employment are separate questions.
- Time and population: Findings tied to a particular year, region or group should not be generalized beyond it.
- Study design and data: Consider whether the result is an association or causal finding, how complete the ownership information is, and what limitations the authors identify.
What federal scrutiny does—and does not—show
In March 2024, the Federal Trade Commission, Department of Justice and Department of Health and Human Services opened a public inquiry into private-equity and other corporate transactions in healthcare. The agencies sought input on effects involving patients, workers, quality, affordability and competition across areas including hospitals, nursing homes, hospice, primary care, dialysis, home health and behavioral health, including transactions outside ordinary merger-reporting review.
FTC Chair Lina M. Khan said at the inquiry’s launch, “When private equity firms buy out healthcare facilities only to slash staffing and cut quality, patients lose out.” That statement expressed the FTC’s concern in announcing the inquiry; the announcement itself was not an adjudicated finding that every private-equity acquisition has those effects or is unlawful.
Further reading
For a broader account of the subject, Simon & Schuster lists These Are the Plunderers: How Private Equity Runs—and Wrecks—America by Gretchen Morgenson and Joshua Rosner. The publisher describes the book as covering private equity’s history and effects on workers, healthcare costs, nursing homes, towns and public pension returns; that description is the publisher’s, not independent validation of every claim in the book.
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