Why It Matters
Private equity companies are increasingly using partnerships with tax-exempt healthcare nonprofits to sidestep state regulations designed to protect patients and workers. Washington state, like most states, lacks specific laws governing these joint ventures—leaving a regulatory blind spot as for-profit operators gain control over nonprofit care systems.
What Happened
In October 2024, a Washington-based nonprofit hospice announced a 50-50 joint venture with Compassus, a Tennessee home health company owned by private equity firm TowerBrook Capital Partners and Catholic health system Ascension. By May 2025, Compassus assumed day-to-day operational control of the partnership, rebranding the employer as Providence at Home with Compassus.
Within months, staffing pressures intensified. Milli Palmer, a nurse who had worked at the nonprofit hospice for nearly two decades before joining Providence in 2007, described management directives to accelerate patient visits. Nurses and case workers were pressured to increase weekly patient visits from 13–15 to 20–25 during eight-hour shifts—a nearly 70 percent increase in caseload.
Palmer and colleagues also reported being asked to alter documentation. “It has really limited our ability to make sure that patients are safe in their home,” Palmer said. Several staff members quit in response. The hospice began relying more heavily on traveling nurses to fill gaps, and the number of patient referrals declined.
Providence declined to be interviewed for this story, and Compassus did not respond to multiple requests for comment.
By the Numbers
50 percent — Compassus’s ownership stake in the joint venture
20–25 — Patient visits per week after operational changes (up from 13–15)
32 — States where Compassus operates
7 — States that enacted private equity healthcare oversight laws last year
More than 20 percent — Share of private equity-backed hospitals owned through joint ventures with nonprofits nationally
Zoom Out
The partnership structure allows private equity firms to bypass state regulations that would apply if they directly acquired healthcare assets. By owning joint ventures alongside nonprofits, these companies operate in a regulatory gap: they gain operational control without triggering oversight mechanisms designed for for-profit hospital operators.
The pattern is widespread. Lifepoint Healthcare, owned by private equity firm Apollo Global Management, operates more than 60 percent of its hospital portfolio through nonprofit joint ventures. Its Duke LifePoint Healthcare partnership, in which Lifepoint holds a 97 percent stake, owns 15 acute care hospitals across Michigan, North Carolina, Pennsylvania, and Virginia. A Duke LifePoint hospital in Wilson, North Carolina risked losing federal Medicare funding three times during 2022 and 2023.
At least seven states passed private equity healthcare oversight legislation last year, signaling growing legislative concern about the model. However, most states—including Washington—have not yet addressed the joint venture structure specifically.
What’s Next
Policymakers in Washington and other states face pressure to clarify how state healthcare regulations apply to nonprofit joint ventures controlled by private equity operators. Matt Parr of the Private Equity Stakeholder Project stated, “Policymakers need to take a look and make sure that they’re future-proofing their states’ regulations for stuff like this.”
The case underscores a broader regulatory question: whether existing consumer protection, labor, and quality-of-care laws extend fully to private equity-controlled partnerships operating under nonprofit licenses. Without legislative clarification, similar arrangements are likely to multiply across healthcare systems nationwide.