Private Equity and Hospitals, ER’s and Nursing Homes – A Disaster in the Making and Covid-19

PeaceHealth St. Joseph Medical Center in Bellingham, Wash.
PeaceHealth St. Joseph Medical Center in Bellingham, Wash.Google Maps

Private equity firms now control many hospitals, ERs and nursing homes. Is it good for health care?

In March, as the coronavirus gripped the nation, veteran emergency room doctor Ming Lin was growing concerned. Lin felt his facility, PeaceHealth St. Joseph Medical Center in Bellingham, Washington, was unprepared for the pandemic, so he went to his superiors for help.

Frustrated by their response, Lin took to social media, criticizing the hospital’s operations in a series of posts.

Days later, the hospital removed Lin from the rotation in the emergency department. He had worked at PeaceHealth for 17 years.

Under typical medical industry practice, Lin’s case would have been subject to peer review, experts said. But Lin’s employer wasn’t PeaceHealth. It was TeamHealth, a physician practice and staffing company that provides the hospital with emergency room services. TeamHealth is owned by Blackstone Group, a finance giant.

When a private staffing firm teams up with a hospital, the right to due process can disappear. Lin’s case was never heard.

“One of the objectives is to point out any deficiencies in the system that may harm the patient,” Lin told NBC News. “Because private equity has taken over health care, it has made that difficult.”


Mark Reiter is residency program director of emergency medicine for the University of Tennessee and past president of American Academy of Emergency Medicine, an advocacy group for practitioners. “Private equity-backed health care has been a disaster for patients and for doctors,” he told NBC News. “Many decisions are made for what is going to maximize profits for the private equity company, rather than what is best for the patient, what is best for the community.”

Representatives of every firm identified in this article declined to respond to broad criticisms of private equity in the health care arena.

As for PeaceHealth St. Joseph Medical Center, spokeswoman Bev Mayhew said it removed Ming Lin from the emergency department rotation because “his actions were disruptive, compromised collaboration in the midst of a crisis and contributed to the creation of fear and anxiety among staff and the community.” She said his case wasn’t subject to peer review because he still has privileges at the hospital.

A TeamHealth spokesman said it continues to employ Lin and had offered to place him “in another contracted hospital anywhere in the country.”

‘Physician Extenders’

Private equity firms have targeted health care investments for an array of reasons, most having to do with their potential profits.

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