Apollo, Private Equity, and the Public Risk in Healthcare

Private equity’s growing footprint in healthcare is no longer a quiet trend—it’s a structural shift with profound consequences. At the centre of this transformation sits Apollo Global Management, a $600+ billion behemoth with deep ties across hospitals, urgent care networks, and healthcare staffing agencies. Apollo is not an outlier—it’s a symbol of how PE has come to dominate key levers of the U.S. healthcare system. And that dominance raises a troubling question: what happens when the financial interests of one of the world's largest PE firms’ conflicts with the health of an entire population?

From Profit Engine to Public Exposure

Apollo’s strategy in healthcare follows the private equity playbook to the letter: leverage, consolidate, extract, exit. Through debt-financed acquisitions, it gains control over healthcare facilities, slashes operating costs, optimizes for margin, and prepares for resale. But when applied to healthcare—a system meant to serve rather than sell—this model produces externalities that ripple far beyond balance sheets.

In 2022, for example, Apollo-backed LifePoint Health merged with Kindred Healthcare to form a 60-hospital system with over 450 care sites. The financial engineering behind that deal included complex debt structures and “synergy” promises that often come at the cost of care delivery, staffing, or community engagement. When a firm like Apollo cuts nursing staff or closes rural clinics to boost EBITDA, it doesn’t just affect margins—it jeopardizes public health.

Healthcare as a Systemic Risk—Magnified by PE

We often think of systemic risk in terms of finance—banks that are “too big to fail.” But healthcare is arguably just as systemically critical. When PE-backed facilities collapse or underperform, the consequences cascade: workers lose access to care, local economies contract, emergency departments overflow, and chronic illnesses go untreated.

Apollo’s influence highlights how private capital can amplify that risk:

• Concentration Risk: With fewer independent providers, system redundancy shrinks. One firm’s misstep can destabilize an entire region’s care network.
• Financial Fragility: High leverage means less flexibility in downturns. Economic shocks or regulatory changes can trigger defaults, closures, or bankruptcies.
• Service Hollowing: PE firms often strip out low-margin services—like behavioral health or primary care—that are essential for long-term community wellness.

In other words, healthcare PE doesn’t just shift ownership. It shifts risk—from investors to patients, workers, and taxpayers.

Can PE Be Part of the Solution?

To be fair, PE’s resources and operational expertise aren’t inherently harmful. The real issue is misaligned incentives. Apollo and firms like it are built for short-term returns, while healthcare requires long-term resilience. The mismatch between investment horizon and public need is where systemic danger lies.

But what if we flipped the script?

If Apollo were held accountable not just for IRR, but for impact—staffing levels, readmission rates, rural access—then capital could be a force for good. That’s the promise of system-level investing and value-based care (VBC) models:

• System-level investing pressures PE firms to operate with public outcomes in mind, via ESG benchmarks, stewardship codes, and conditional capital.
• VBC ties provider compensation to long-term health outcomes, not short-term billing volume—making extractive strategies less viable.

Apollo, given its scale, could actually lead this shift. It has the capital, the network, and the visibility. What it lacks—at least publicly—is the commitment.

The Path Forward: Realigning the System

Regulation will be key. Disclosure requirements, debt limits, and antitrust enforcement can curb PE’s worst impulses. But equally important is capital redirection. Institutional investors—pension funds, endowments, sovereign wealth—must rethink how they deploy money in healthcare.

When these allocators ask not just what will this yield, but what will this build, Apollo and others will have to change course. Because in healthcare, the return on investment should include lives saved, systems strengthened, and communities served.

Final Thought

Private equity in healthcare isn’t going away. The question is whether we continue letting firms like Apollo shape the system unchecked—or whether we use the tools of finance to realign capital with care. If we get it right, PE can evolve from systemic risk to systemic reformer. But that shift requires a new kind of due diligence—one rooted in impact, not just returns.