Ellen Allen: The harms of private equity in health care (Opinion)

By Ellen Allen. Originally published August 21, 2025 in the Charleston Gazette-Mail. 

In West Virginia, the fear of health care costs weigh heavier than the mountains that surround us. Around 84% of West Virginians — and many of our Appalachian neighbors — report being worried about what it will cost them to get the care they need.

More than half of us have delayed or skipped care in the past year because of the price tag. An estimated 180,000 West Virginians are carrying medical debt, ranking us fourth-worst in the nation. This is not because we are sicker or lazier than anyone else, it’s because our health care system is being hollowed out by profit-driven interests.

Nowhere is this clearer than in the growing role of private equity in health care.

When Gov. Patrick Morrisey announced recently that West Virginia would sell four of its state-run, long-term care facilities to a New York–based real estate development and private equity–aligned firm, Marx Development Group (MDG), it wasn’t just a budget maneuver. It was a betrayal of our most vulnerable citizens.

The sale of Hopemont Hospital, Jackie Withrow Hospital, John Manchin Sr. Health Care Center and Lakin Hospital for $60 million may appear fiscally responsible on the surface, but the deeper cost is far higher.

When private equity enters health care, history shows cost-cutting follows. Staff are pared back, services are trimmed, and the focus shifts from care to margins. Public ownership ensures accountability; private profit motives don’t. A Medicaid watchdog study previously found that nursing homes under private equity ownership tend to have inadequate staffing levels and higher mortality rates – a warning sign West Virginia should heed now.

I know what happens when profit at all costs eclipses evidence-based health care concerns in assisted living homes or hospitals. I watched a large, and once proud regional medical facility in Mercer County fail, sending a downward cascade of economic woes throughout the area.

I also saw a private equity firm purchase an assisted living facility in Mercer County, invest what seemed like tens of thousands of dollars into physical upgrades, and at the same time cut staff. As a result, the remaining employees had to work harder. What was striking is that they rose to the challenge, but they should never have been forced to shoulder such a heavy burden just to provide proper care for our seniors.

West Virginia is particularly vulnerable. With 76% of nursing home residents relying on Medicaid, our most vulnerable neighbors are at the mercy of facilities where profit motives can determine who receives care. And with the average semi-private nursing home room here costing over $11,000 a month — twice the median household income — families cannot
simply pay out of pocket when private equity squeezes Medicaid patients out in favor of higher-paying ones.

In Pennsylvania, after private equity firm Prospect Medical Holdings acquired Crozer Health System, four hospitals closed within six years. When a gunshot victim was rushed to a now-shuttered ER, he died during the long drive to the nearest open hospital. In Iowa, when Cascade Capital Group bought 29 nursing homes, care ratings plummeted, abuse citations
rose, and fines skyrocketed to five times the national average.

West Virginia’s rural counties are already care deserts. These facilities are more than buildings, they’re lifelines. Closing them, or diminishing their capacity, threatens access in places where residents have nowhere else to go. West Virginians are resourceful, but they shouldn’t have to fend off privatization to get basic care.

The state’s own Department of Health Facilities, via a 2024 plan, envisioned working with Lument Securities to secure private capital while safeguarding operational continuity and quality of care. If the issue is broken infrastructure, then the answer is to repair and modernize, not cede control.

While private equity firms may inject capital and claim to improve efficiency, their emphasis on short-term profits can create a conflict of interest that ultimately jeopardizes the well-being and quality of care for Medicaid recipients in long-term care facilities. Government oversight and increased transparency are crucial to mitigating these risks and ensuring the protection of vulnerable populations.

West Virginia is at a crossroads: we can continue investing in the dignity and wellbeing of our elders, or gamble with profit-driven entities that answer to shareholders—not patients.

Public ownership isn’t about inefficiency — it’s about accountability. It’s about promise. Our state’s solemn duty is to provide care, not profit.