In the spring of 2025, a bankruptcy judge in Texas approved the closure of the last two hospitals in Delaware County, Pennsylvania. Twenty patients were still inside Crozer-Chester Medical Center when the decision came down. The county of half a million people was left with no hospital at all. The chain that owned those hospitals, Prospect Medical Holdings, had been bought by a private-equity firm fifteen years earlier, loaded with debt, stripped of its real estate, and left to fail. The firm had already cashed out. The hospitals had not.
That sequence — buy, borrow, sell the land, pay the dividend, exit, collapse — is now the central fact of the American hospital market, and the reason private equity has become the most argued-about buyer in healthcare. As of April 2025, private-equity firms owned 488 hospitals in the United States, according to the Private Equity Stakeholder Project's tracker. A handful of firms hold most of them. Apollo Global Management owns Lifepoint Health and ScionHealth. Welsh, Carson, Anderson & Stowe owns Select Medical Holdings and Emerus Hospital Partners. One Equity Partners owns Ernest Health. Equity Group Investments owns Ardent Health Services. Webster Equity Partners owns Oceans Healthcare. Bain Capital owns Surgery Partners. The list is short, the portfolios are large, and the model is the same in each: buy hospitals, operate them for yield, and sell them on.
The model's critics have two case studies, and both are devastating. Steward Health Care, built by Cerberus Capital Management from a $900 million purchase of the Caritas Christi system in 2010, filed for Chapter 11 in May 2024 with 31 hospitals, about $1 billion in funded debt, and roughly $6.6 billion in lease obligations after selling its real estate to Medical Properties Trust. Prospect Medical Holdings, in which Leonard Green & Partners bought a controlling stake for $363 million in 2010, filed in January 2025. A Georgetown University case study put the dividends and fees Leonard Green collected at $658 million — including a $457 million dividend paid in 2018, the same year Prospect recorded a $244 million loss, and a $1.55 billion sale-leaseback of 14 hospitals to Medical Properties Trust in 2019 that left the chain paying about $100 million a year in rent. A U.S. Senate report later found Leonard Green's investors took $424 million out of Prospect, plus more than $13 million in fees. The Crozer-Chester campus sold at auction in October 2025 for $10 million.
The politics followed the money. Senator Chris Murphy's report on the Connecticut hospitals Prospect owned — Waterbury, Rockville General, and Manchester Memorial — documented the pattern in detail, and state officials in Connecticut proposed new rules on private-equity healthcare ownership after Prospect's filing. The argument is straightforward: hospitals are not ordinary businesses, because a hospital that closes leaves a community without emergency care, and a buyer that can extract value and walk away has no reason to stay. The counterweight is that the same states that now want to regulate private equity have no public money to run the hospitals themselves, and the alternative to a private-equity buyer is often no buyer at all.
Yet the buyers have not gone away, and the deal flow shows it. For-profit systems were sellers in 11 of the 46 hospital deals announced in 2025 — and buyers in only one. That is the shape of a market in which the big for-profit operators are shrinking their footprints while someone else, often a nonprofit system or a private-equity-backed operator, takes the assets. In 2026 the flow turned toward scale: Sutter Health and Allina Health announced a combination worth $26 billion in combined revenue in March; HealthPartners and Essentia Health announced a deal above $12 billion in combined revenue in the third quarter; Prisma Health and Erlanger Health System signed a letter of intent involving roughly $2 billion of investment; Rush University System for Health and Endeavor Health announced a 12-hospital, nearly $11 billion merger in October, with Endeavor pledging a $1 billion investment. Kaufman Hall counted 56 hospital deals in the first nine months of 2026, already more than all of 2025, and said the year could set a record for mega mergers — deals where the smaller party has more than $1 billion in annual revenue.
The non-hospital side of the market shows the same logic at work. In June 2025, Ascension — one of the largest nonprofit systems in the country — agreed to acquire AmSurg, an ambulatory surgery operator with more than 250 facilities across 34 states. The deal is a bet that the future of hospital economics sits outside the hospital: in surgery centers, outpatient clinics, and the procedures that pay better than an inpatient bed. A valuation firm that only knows how to price a hospital building will miss that bet. The work now covers the whole enterprise — the hospital, the surgery centers, the physician practices, and the real estate underneath them, each valued on its own terms.
The counterargument deserves its weight. Private equity is not one thing. Some firms buy struggling hospitals, invest in them, and sell them as going concerns; others strip them. The industry's defenders point out that the hospitals private equity buys are often the ones nobody else wanted — rural, safety-net, already losing money — and that a buyer with capital and operating discipline is better than a closure. There is truth in that: the Steward hospitals that found new owners in Massachusetts are operating today under Boston Medical Center, Brown University Health, and Merrimack Health, and the communities they serve still have emergency rooms. The question is not whether private equity should own hospitals. It is whether the price it pays — and the price it extracts — reflects the hospital's value to the community that depends on it, or only its value to the fund that owns it.
That distinction is where valuation earns its keep. A private-equity acquisition of a hospital is priced on EBITDA, on leverage, and on an exit multiple — the same arithmetic as any leveraged buyout, applied to an asset that cannot be moved, cannot be closed without a public fight, and cannot be valued without accounting for the payer mix, the Certificate of Need, and the physicians who may or may not stay. The firms that do that work well — the valuation practices, the M&A advisors, the diligence teams — are the ones both sides need, and they are the ones the next wave of deals will call first. The wave is not over. The buyers are still buying. The only open question is who prices the deals, and on what terms.
Sources: Private Equity Stakeholder Project, Private Equity Hospital Tracker (October 2026): 488 private-equity-owned U.S. hospitals as of April 2025; Apollo/Lifepoint/ScionHealth, Welsh Carson/Select Medical/Emerus, One Equity/Ernest Health, Equity Group/Ardent, Webster/Oceans, Bain/Surgery Partners, https://pestakeholder.org/reports/private-equity-hospital-tracker-fall2026/. Prospect Medical Holdings: Leonard Green $363 million (2010), $658 million dividends and fees (Georgetown/PESP case study), $457 million dividend and $244 million loss (2018), $1.55 billion sale-leaseback (2019), Chapter 11 January 12, 2025, Crozer closure April 2025, campus $10 million auction, https://www.beckershospitalreview.com/finance/private-equity-firm-drained-658m-from-safety-net-hospitals-in-3-states-report/ and https://en.wikipedia.org/wiki/Prospect_Medical_Holdings. Steward Health Care: Cerberus $900 million (2010), Chapter 11 May 6, 2024, 31 hospitals, $1 billion funded debt, $6.6 billion lease obligations, https://en.wikipedia.org/wiki/Steward_Health_Care. 2025 for-profit sellers: 11 deals as sellers, 1 as buyer, via HealthLeaders Media, January 2026, https://www.healthleadersmedia.com/ceo/hospital-ma-slumped-2025-financial-distress-policy-uncertainty-stalled-deals. 2026 mega mergers: Sutter–Allina $26 billion combined (March 17, 2026); HealthPartners–Essentia above $12 billion; Prisma–Erlanger ~$2 billion investment; Rush–Endeavor 12 hospitals, ~$11 billion, $1 billion investment pledge, via Becker's Hospital Review, October 14, 2026, https://www.beckershospitalreview.com/hospital-transactions-and-valuation/hospital-ma-on-pace-for-busiest-year-since-pandemic-as-megamergers-mount/. Ascension–AmSurg (June 2025, 250+ facilities, 34 states) via Becker's Hospital Review, February 2026, https://beckershealthcare.uberflip.com/i/1543326-hospital-review-february-2026/21.