Probes Into Private Equity’s Healthcare Role Intensify

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Influential U.S. Senators are the latest to launch investigations into private equity’s increasing role in owning and operating everything from hospitals and health systems to physician practices and clinics.

In a letter last week to Ascension Illinois, a not-for-profit operator of 10 hospitals in the Chicago area, Sen. Chuck Grassley, an Iowa Republican and senior member of the Senate Finance Committee, said he wants to know how private equity is impacting patients, healthcare quality and outcomes.

Grassley’s investigation comes amid expanding probes by Congressional committees that include an investigation by U.S. Sen. Ed Markey, a Democrat from Massachusetts and chair of the Senate’s Primary Health and Retirement Security subcommittee, who has has “zeroed in on the hundreds of billions spent by private equity snapping up physician practices, hospitals, labs and nursing homes across the country,” the Washington Post reported last month.

The Grassley and Markey probes come less than three months after the Federal Trade Commission, the U.S. Justice Department and the Department of Health and Human Services in March launched a “cross-government inquiry on (the) impact of corporate greed in health care.”

In Grassley’s inquiry, which is grabbing headlines in Chicago, the senator is looking into Ascension’s decision to outsource hospitalists to a for-profit company known as SCP Health, which is backed by a “Canadian-private-equity-backed staffing firm,” the Senator’s letter to Ascension Illinois said.

“My office has received allegations that the staff outsourcing includes: medical directors, doctors, nurse practitioners, and physicians’ assistants,” Grassley’s letter said of positions that have been directly employed by Ascension.

“Whistleblowers have provided disclosures to my office with respect to proposed changes to staffing and procedures if SCP Health assumes control and the hospitalist function is outsourced,” Grassley’s letter said.

“If executed, these models could affect the patients’ quality of care, increase health care workers’ loads to unsustainable levels, and could raise questions on whether proper internal controls are in place with regards to protecting patient information and ensuring billing accuracy,” Grassley’s letter added. “I am concerned that if the staffing plans are executed as stated to my office, hospitalists would carry very high patient loads. For example, based on records provided to my office, SCP models would change the average number of patients that hospitalists see per day from between 16 and 19 to between 22 and 30.”

For its part, Ascension Illinois confirmed Friday it received Grassley’s letter and is cooperating with the Senator’s office.

“Delivering compassionate and timely care to the patients we serve is at the center of all we do,” an Ascension Illinois spokesman said. “On June 1, 2024, SCP Health, a clinical services provider for emergency medicine, hospital medicine and critical care, began providing hospitalist care for our acute hospitals utilizing the majority of providers currently serving in these facilities. We received Senator Grassley’s letter, and look forward to sharing information on how our arrangement with SCP Health will serve our patients, our community and our Mission.”

It remains unclear how the Senators investigations will proceed but Markey’s office has already developed legislation called the “Health Over Wealth Act,” that would impact private equity’s future involvement in healthcare if it becomes law.

“The goal of my Health Over Wealth Act is to protect patients and providers by mandating the private equity company set aside funding to protect access to care, removing tax breaks that incentivize companies to strip hospital assets, and giving a bigger voice to workers and patients to review and block seats that would impact patient care, access or safety,” Markey told the Washington Post in an interview.

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