Greedy rich predators abscond with emergency money meant for Covid-19

Apollo Global Management converted $1.64 billion in COVID stimulus grants and loans collected by LifePoint Health, a rural hospital company that it owns, by selling the medical business from one of its private equity funds (Apollo Investment Fund VIII) to another fund managed by Apollo (Apollo Investment Fund IX).

With 87 hospitals in 29 states, LifePoint Health derived more than 55 percent of its revenues from government health programs Medicare and Medicaid but is has come under fire in recent years for aggressive policies that prioritize profit over patient care.

There is cause for concern when so much government money is pouring into these giant corporations while very little service improvement is coming out of them.

“As long as private equity firms are incentivized to assume risk to create short-term, substantial profits in the healthcare sector, we’re going to continue to see cases like this,” said the deputy chief of the civil division in the U.S. Attorney’s Office for the Eastern District of Pennsylvania.

Private equity deals in the U.S. health care sector surpassed $100 billion in 2018, compared with less than $5 billion in 2000. Not only is it a nearly $4 trillion industry with significant federal government support, but America’s health care industry has also proven to be a reliable profit driver that is susceptible to fraud.

“What is striking about the transfer of LifePoint from Apollo Fund VIII to Fund IX and LifePoint’s acquisition of Kindred is that both represent large transfers of wealth to private equity firms just months after LifePoint received $1.6 billion in federal stimulus and while many LifePoint hospitals are struggling with surges in COVID-19 cases,” said Private Equity Stakeholder Project, which authored a report on some disturbing business practices.

In June 2021 LifePoint announced that it is acquiring Kindred Healthcare, long-term acute care (LTAC) hospital and acute rehabilitation company that is owned by private equity firms TPG Capital and Welsh, Carson, Anderson & Stowe (WCAS).

As of March 2018, Kindred had approximately 38,300 employees in 45 states and about $3.4 billion in annual revenues.

LifePoint Health and Kindred Healthcare announced plans in October to establish a new company operating under the name ScionHealth, which will consist of 79 hospital campuses in 25 states, including Kindred’s 61 long-term acute care hospitals and 18 of LifePoint’s community hospitals and associated health systems.

Upon the completion of regulatory approvals and satisfaction of customary closing conditions, the acquisition of Kindred and the launch of ScionHealth are expected to be completed by the end of the year.

LifePoint has no facilities in new Jersey but Kindred operates hospitals in Passaic, Dover, Rahway and Madison.

Apollo is the 4th largest private equity firm in the world, with $471.8 billion total assets under management, $47.6 billion in cash available, and a net income of $4.7 billion during the twelve months ending June 2021.

“In the first half of 2021, private equity firms had their busiest six months ever, announcing 6,300 deals worth $513 billion,” said Jim Baker, executive director of the Private Equity Stakeholder Project.