Private equity dismantled West Suburban Medical Center and other area hospitals

The shutdown of West Suburban Medical Center in Oak Park is the latest disruption in Chicago’s safety-net system. It follows the closure of Weiss Memorial Hospital last year and the 2019 shutdown of Westlake Hospital in Melrose Park. All three hospitals share a common history: Each was owned at one time by Pipeline Health, a private equity-backed hospital chain.

Pipeline acquired the hospitals in 2019, and its ownership employed financial strategies that weakened these facilities over time, including monetizing hospital assets. Today, Weiss and Westlake are closed; West Suburban Medical Center, now owned by other groups, announced in March it was closing temporarily (some outpatient clinics began treating patients last week).

Chicago’s experience reflects a broader national trend in private equity ownership of hospitals. Private equity has become a significant force in hospital ownership, with approximately 488 hospitals owned by private equity firms as of April 2025, our research shows. That represents about 8.5% of all private, or non-government, hospitals and more than 22% of for-profit hospitals. At the same time, investment activity continues to grow. In 2025 alone, there were more than 1,000 private equity-backed health care deals across the country.

That expansion has coincided with rising financial distress. Private equity firms were involved in 44% of the largest health care bankruptcies in 2025, a disproportionate share given the size of the industry.

The collapse of Steward Health Care, a multistate hospital system, illustrates the scale of the problem. When Steward filed for bankruptcy in 2024, it reported more than $9 billion in liabilities, including $6.6 billion in long-term lease obligations tied to real estate deals.

The financial approach behind these outcomes follows a familiar model. Private equity firms typically use debt to acquire hospitals and then seek to generate returns within a relatively short time frame. That approach often involves cutting costs, increasing revenue and extracting value through fees and dividends. In some cases, hospitals’ real estate is sold to generate immediate cash, leaving the operating entity responsible for ongoing lease payments.

Big returns for investors; debt for hospitals

The Steward case demonstrates how this model can unfold. A $1.2 billion real estate transaction generated significant returns for investors, while leaving hospitals responsible for substantial rent obligations that continued to weigh on their finances. A similar pattern occurred at Prospect Medical Holdings, where investors extracted approximately $658 million in dividends and fees before selling hospital real estate for $1.4 billion through a sale-leaseback transaction. These strategies reduce financial flexibility and make it harder for hospitals to withstand operational or financial disruptions.

The same pressures are visible in Chicago. Westlake closed following a controversial bankruptcy process. Weiss shut down after years of financial strain and asset sales (Pipeline sold the hospital to Resilience Healthcare in 2022). West Suburban has now halted services, leaving patients to seek care elsewhere. The details differ in each case, but the trajectory is consistent. Similar pressures have emerged at other private equity-owned hospitals in Chicago, including recent closures of Apollo Global Management-owned Kindred facilities, where mounting debt and an unsustainable financial structure led to layoffs and service consolidation.

Policymakers across the country have started to respond. As of early 2026, lawmakers in 25 states have introduced at least 79 bills addressing private equity ownership in health care. These proposals focus on increasing transparency, strengthening oversight of transactions, and limiting practices that can destabilize providers.

Illinois lawmakers have introduced measures aimed at increasing oversight of private equity involvement in health care, including House Bill 5301 and Senate Bill 3770, which would give the attorney general authority to review and potentially block certain transactions. However, both bills are currently stalled in the General Assembly following key legislative deadlines, leaving stronger oversight proposals effectively sidelined, a disservice to people across Illinois who rely on these hospitals for care.

Another proposal, House Bill 5000, continues to move forward and would expand notification requirements to the attorney general for health care transactions, including those involving private equity. While that added transparency is a step forward, the bill does not provide the authority to stop harmful deals before they happen.

House Bill 5301 and Senate Bill 3770 would have provided that authority. Illinois needs this level of oversight to address a key gap in current review, where financial decisions that affect hospital stability are often not fully evaluated before deals are completed.

Chicago has already seen the consequences of that gap. The three hospitals connected to the Pipeline Health chain have now experienced closures or service disruptions within seven years. For the communities they served, the effects are immediate: reduced access to care, lost jobs for health care workers and increased strain on the remaining hospitals in the region.

Private equity will continue to play a role in health care. The question is whether that role will be subject to meaningful oversight. Without stronger safeguards, the pattern seen at Westlake, Weiss and West Suburban is likely to repeat. Illinois has an opportunity to act before more hospitals follow the same path.

Matt Parr is communications director at the Private Equity Stakeholder Project, a nonprofit that researches the impact of private equity investment in health care and other essential services. He lives in Chicago.