“They all believe that this will clearly engender risks for the patients they've served, and there's an almost universal sense of unease in moving forward with that,” he said.

Saves on expenditures but at a cost
Founded in 1994 as Schumacher Clinical Partners, SCP Health today has more than $1.4 billion in net revenue and provides staffing in more than half of the U.S. In 2015, Onex Partners invested an undisclosed sum in the company, giving it a majority stake.

Evidence shows that PE firms or companies backed by these entities do reduce spending but do so by eliminating staff and rolling back. It also shows that they increase pricing for patients and insurers.

In 2022, the No Surprise Act took effect, creating a government arbitration process for negotiating expensive out-of-network bills between these companies and patients and insurers. But the number of disputes has soared, according to CMS' 2022 Initial Report on the Independent Dispute Resolution (IDR) Process, which showed that SCP Health had the highest number of any staffing firm between April and September of that year.

These concerns line up with the criticisms that most healthcare providers have about the influence of private equity ownership in hospitals and have rolled over into Washington, D.C., with both the White House and the Senate Budget Committee investigating how private equity firms affect patient outcomes, affordability, quality of care, and access.

“There’s just not a lot to go around,” said one of the doctors who spoke to Crain’s. “To have private equity come in and take 20% to 30% off the top, there's no other thing that can happen, other than that it’s going to come at the expense of the patient.”

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