(Bloomberg) -- Private equity’s stewardship of hospitals is again coming under scrutiny with the launch of a new bipartisan Senate investigation. 

Sheldon Whitehouse, the Rhode Island Democrat who chairs the Senate Budget Committee, and Chuck Grassley, an Iowa Republican and its ranking member, contacted executives at firms including Leonard Green & Partners and Apollo Global Management, saying they’re seeking answers on “questionable financial transactions that may have impacted quality of care for patients in hospitals under private equity ownership,” according to a Thursday statement. 

“It’s now a familiar story: private equity buys out a hospital, saddles it with debt, and then reduces operating costs by cutting services and staff— all while investors pocket millions,” Whitehouse said in the statement. “Before the dust settles, the private equity firm sells and leaves town, leaving communities to pick up the pieces.” 


State and local governments are scrutinizing and considering new curbs on private equity ownership, including efforts to limit sales of hospitals’ underlying real estate that require them to pay rent on top of already-escalating expenses. Private equity owns almost 400 of the approximately 5,100 hospitals – or about 30% of all for-profits – in the US, according to the Private Equity Stakeholder Project, including more than 100 in rural areas. 

Read More: Private Equity Hospital Flips Fail as Labor Costs, Rates Surge

Leonard Green and Apollo didn’t immediately respond to calls seeking comment. 

The probe builds on a previous inquiry from March, when Grassley demanded information from Apollo and related parties on events at Ottumwa Regional Health Center in his home state after nine patients were sexually assaulted there. Despite responses, the senators said in a Dec. 6 letter to Apollo Chief Executive Officer Marc Rowan, “your company has failed to provide full and complete answers.” 

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