STAT+: A private equity-owned hospital chain is becoming a nonprofit. Is it just a bailout for investors?
Other private equity-owned hospital chains have collapsed in recent years, so the stakes are high for Quorum.
Greg Kiser, CEO of Three Rivers Medical Center in Louisa, Kentucky, informed local officials about an imminent transformation at his hospital. The news brought a sense of relief to the mayor and county judge, as the hospital was a significant employer in the town. Kiser, who had been leading the hospital for 32 years, feared the worst when Quorum Health, a private equity-owned chain of rural hospitals, filed for bankruptcy in 2020. The hospital was on the verge of insolvency, dependent on hefty payments to its investors.
Quorum Health is now on the path to becoming a nonprofit organization, and this transformation will affect all 11 hospitals under its ownership. While similar transitions have occurred for individual private equity-owned hospitals, this is unprecedented for an entire chain to convert to nonprofit status. The shift brings several advantages, including tax benefits, discounted drugs through the 340B program, and the eligibility to apply for grants.
Above all, the change means that the cash generated will directly benefit patient care, rather than being directed towards private equity investors. For more information, continue reading STAT+.
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