Private Equity Strategies in Nonprofit Health Care.

Abstract

Private equity firms exacerbate health inequity by driving hospital closures in historically underserved communities. Now nonprofit health systems seem to be adopting private equity practices to do the same. Drawing on a case study of one nonprofit hospital system that has adopted private equity business practices to acquire and close community hospitals, this article argues that nonprofit hospitals' adoption of private equity acquisition and closure practices sacrifices their missions, prioritizes profit, and works to the detriment of local communities. This article construes this set of practices as a breach of organizational ethics that must be addressed via policy changes, specifically by placing guardrails on closures and promoting responsible health care investments.