PESP flags growing private equity-nonprofit healthcare joint ventures

Private Equity Stakeholder Project research says nonprofit joint ventures have become a key expansion tactic for private equity-backed healthcare companies across hospitals, hospice, rehab and other sectors. The report says hundreds of facilities are now tied to these deals, raising new questions about federal and state oversight.

Why it matters: - Private equity-backed healthcare companies are using nonprofit joint ventures to expand without relying only on traditional buyouts. - The model can shift control, management authority and financial risk in ways that may not fit older oversight rules. - The report says that matters for patients, workers and public regulators because the deals now touch hospitals, hospice, home health, behavioral health and rehabilitation care.

What happened: - The Private Equity Stakeholder Project released a report on July 7, 2026, in Chicago, finding that nonprofit joint ventures have become an increasingly important strategy for private equity-backed healthcare companies. - PESP documents hundreds of healthcare facilities tied to private equity-nonprofit joint ventures. - PESP says the business model has received far less public attention than traditional private equity acquisitions. - Jim Baker, PESP's executive director, said private equity has increasingly relied on joint ventures with nonprofits to expand its presence in healthcare.

The details: - The report says private equity-backed healthcare companies are using joint ventures with nonprofit health systems across multiple sectors, including hospitals, rehabilitation facilities, ambulatory surgery centers, hospice, home health and behavioral health. - PESP says these partnerships can help companies enter new markets, access referral networks and patient populations, share financial risk and pursue growth under different regulatory conditions than acquisitions. - The report says the main IRS guidance governing nonprofit-for-profit healthcare joint ventures dates to 1998 and 2004. - PESP argues that guidance predates many of today's large private equity-backed healthcare platforms. - The report says state lawmakers are increasingly scrutinizing private equity ownership through laws focused on acquisitions, control and disclosure. - PESP raises questions about whether those rules adequately address joint ventures that can transfer significant management authority or operational control without a traditional ownership change. - The report examines joint ventures involving Lifepoint Health, Compassus, Ardent Health Services and Ascension. - LifePoint Health owns the majority, or 61%, of its hospitals through joint ventures with nonprofit and other healthcare providers. - Duke LifePoint, LifePoint Health's largest partnership, owns 16 hospitals across four states. - Duke LifePoint is 97% owned by Apollo-owned LifePoint Health despite carrying the Duke name. - PESP says these structures show how private equity-style financial practices, including sale-leasebacks and management agreements, can extend into nonprofit health systems.

Between the lines: - The report adds a new lens to the policy debate around healthcare consolidation. - Traditional private equity hospital failures, including Steward Health Care, Prospect Medical Holdings and Pipeline Health, have already pushed regulators and lawmakers to look harder at ownership models. - PESP is arguing that nonprofit joint ventures may be another route for private equity firms to extract profits from healthcare systems and critical infrastructure. - The report also says federal oversight may be weaker now because staffing reductions have cut IRS enforcement capacity in divisions that handle complex corporate structures. - Healthcare workers in these joint ventures are also raising concerns. A hospice nurse at the Providence at Home with Compassus joint venture told a Washington State board, “Constantly having to fight to give complete and dignified care should not be a regular part of my job.”

What's next: - PESP says policymakers should better understand how these partnerships are structured, how they operate and whether current oversight reflects today's private equity healthcare strategies. - The report is likely to feed further debate in Washington and in state capitals over disclosure, control and accountability in healthcare deals. - The full report is available here.