For over two decades, Dr. Heather Prendergast has worked in Chicago emergency rooms. She has witnessed the devastating impact when a hospital shuts down in a community that relies on it. Ambulances travel farther, wait times stretch, and patients arrive in worse condition because they couldn't get timely care. What she didn't foresee was that these closures would happen not because neighborhoods couldn't support a hospital, but because the hospital's assets might be worth more when stripped than when operating.
In March 2026, West Suburban Medical Center in Oak Park became the third safety-net hospital in Chicago to close abruptly. Weiss Memorial Hospital followed in 2025, and Westlake Hospital in Melrose Park in 2019. All three were once owned by Pipeline Health, a private-equity-backed chain that acquired them in 2019.
This pattern is repeating across the country. Approximately 447 hospitals are now under private-equity ownership, with about 25% serving rural areas. While private-equity firms generate roughly 7% of U.S. GDP, they accounted for 21% of all healthcare bankruptcies in 2024, including seven of the eight largest that year.
Steward Health Care, once the largest private for-profit hospital system, was bought by a private equity firm in 2010 and sold in 2020. Four years later, it filed for bankruptcy and closed its safety-net hospitals, leaving vulnerable patients without nearby emergency care and forcing longer transport times.
Safety-net hospitals disproportionately serve low-income, publicly insured, and diverse populations. According to America's Essential Hospitals, 75% of their patients are uninsured or on Medicaid/Medicare. These facilities are often the sole source of high-acuity care in their communities, seeing twice as many emergency visits on average. Their reliance on public financing makes them financially fragile and prime targets for leveraged buyouts, sale-leasebacks, and closures.
The corporatization of healthcare has come at a steep cost. While private equity may enrich investors, it jeopardizes patients, communities, and providers. A bipartisan Senate Budget Committee investigation, reviewing over a million documents, concluded that private-equity firms "extracted huge profits from hospitals, while increasing their debt and allowing patient care and safety to decline," sometimes directly forcing closures.
Research backs this up. A 2023 JAMA study found a 25% increase in preventable adverse events after private-equity acquisition, including a 38% rise in central-line infections and a doubling of surgical-site infections. A more recent study in the Annals of Internal Medicine linked such ownership to staffing cuts and a 13% increase in emergency room deaths. Additionally, a July 2024 study found hospital assets fell by 24% on average within two years of purchase—about $28 million per hospital in vanishing infrastructure.
These outcomes are not inevitable; they result from a specific financing model. Lawmakers in 25 states, including Illinois, have introduced at least 79 bills addressing private-equity ownership of medical facilities, with several enacted. This comes as a larger threat looms: federal Medicaid restructuring passed in 2025 is projected to cut roughly $1 trillion in federal Medicaid spending over the next decade, with provisions hitting Illinois starting January 2027. Safety-net hospitals, which serve the highest share of Medicaid patients, will bear the brunt.
Safety-net hospitals are not distressed assets waiting to be flipped. They are often the difference between catching a stroke in time or not, stabilizing a gunshot wound in minutes or not, and a neighborhood caring for its own versus driving miles for care. Private equity promises efficiency, but the question remains: efficient for whom?
