Private-Equity Boom Meets Debt Crisis, Threatening Hospitals and Jobs

A wave of private-equity buyouts that once drove rapid expansion is now colliding with persistently high interest rates and soaring purchase prices. Companies loaded with debt are struggling to meet payments, prompting a surge in bankruptcies that has already claimed retailers such as Saks and Eddie Bauer and, most visibly, the hospital chain Steward Health Care. The fallout is leaving thousands unemployed and depriving communities of essential health services.

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• Private-equity-owned firms employ more than 13 million workers across the United States.

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• Portfolio data show about 13 500 unsold companies, including 2 563 consumer-product firms and 1 536 health-care providers that have lingered in funds for years.

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• Average leverage in these firms is roughly 50 % of enterprise value.

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• In 2025-2026, over 60 % of large manufacturing bankruptcies were linked to private-equity owners, and a similar share of health-care failures were reported.

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Jim Baker, executive director of the Private Equity Stakeholder Project, warned that the “record number of unsold companies” signals a looming wave of collapses. Will Dunham, president and CEO of the American Investment Council, argued that private-equity firms possess “committed investment partners” capable of supplying capital during downturns and that long-term success depends on the health of their portfolio businesses. Audrey Stienon, Industrial Policy Program Manager at Open Markets, cautioned that the concentration of debt in “really, really important businesses” could jeopardize jobs and community services.

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Industry analysts and consumer-advocacy groups contend that the model’s reliance on heavy borrowing creates systemic risk for workers and patients. Brad Lipton described the sector as operating “in the shadows,” limiting transparency about debt levels. Pablo Willis of Americans for Tax Fairness linked the strain to recent cuts in ACA tax credits and Medicaid, predicting “a very negative effect” on rural hospitals.

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• “Interest rates being unexpectedly high may have complicated exit strategies,” — Brad Lipton, director of corporate power and financial regulation at the Roosevelt Institute

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• “They can engage in financial engineering or just slash and burn on the operating side,” — Rosemary Batt, a Cornell University management and labor professor

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• “By design, the industry takes place in the shadows,” — Brad Lipton, director of corporate power and financial regulation at the Roosevelt Institute

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• “It is a cause of concern for workers and consumers left holding the bag,” — Lipton. New

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