STAT+: A private equity-owned hospital chain is becoming a nonprofit. Is it just a bailout for investors?

Tara covers the business of health care. Her stories focus on hospitals, doctors, and how their business practices affect patients — especially when private equity gets involved. She also writes about health insurance and ideas for improving our broken health system. You can reach Tara on Signal at tarabannow.70.When Greg Kiser gave the mayor and county judge a heads up about a change underway at his hospital, they responded with sighs of relief. One of the town’s biggest employers wasn’t closing. “They said, ‘Greg, we can’t make it without this hospital in our little town,’” said Kiser, who’s been CEO of Three Rivers Medical Center in Louisa, Kentucky — population less than 3,000 — for 32 years. It wasn’t an unreasonable fear. The hospital is part of Quorum Health, a private equity-owned chain of mostly rural hospitals that filed for bankruptcy in 2020 after years of funneling hefty payments to its investors. Now, it’s back on the brink of insolvency. Kiser’s news was good news, as he saw it. Quorum is in the process of converting to a nonprofit organization, bringing all 11 of its hospitals along with it. Individual private equity-owned hospitals have transitioned to nonprofit status before, but it’s unheard of for an entire chain to do so. The change promises tax advantages, discounted drugs through the 340B program, and the ability to apply for grants. Most importantly, cash generated would go to patient care instead of private equity investors. STAT+ Exclusive Story Already have an account? Log in This article is exclusive to STAT+ subscribers Unlock this article — plus in-depth analysis, newsletters, premium events, and news alerts. Already have an account? Log in View All Plans To read the rest of this story subscribe to STAT+. Subscribe