Providence home health nurses concerned about takeover by private equity-backed Compassus

Providence’s planned joint venture with Compassus, half owned by a private equity firm, has nurses at Providence Visiting Nurses Association nervous. While Providence is casting this change as a positive step, nurses at PVNA are worried about what changes Compassus will make after they take over and how patient care could be impacted. Nurses are also frustrated about the Providence benefits that Compassus has indicated it intends to change once Compassus takes over operations.

“Obviously, everyone has a lot of anxiety,” said Kathleen Thompson, who chairs the Washington State Nurses Association local unit at PVNA. “For right now the only change is mental anguish about what’s coming.”

Compassus is owned equally by private equity firm Towerbrook Capital Partners and health system Ascension Health. Private equity ownership of healthcare is a national issue, with studies, including an investigation that ran in JAMA, showing that private equity acquisition of hospitals is associated with a 25.4 percent increase in hospital-acquired conditions, including falls and bloodstream infections. And private equity takeovers of health systems have led to hospital closures and bankruptcies.

Providence VNA is separate from the Providence hospitals in the region, including Sacred Heart and Holy Family. Nurses at PVNA fear that Compassus will, over time, increase patient loads – a common strategy for private equity-owned health care to bring in greater returns for investors. And less time with patients could negatively impact the care nurses are able to provide.

“We’re already working a lot of overtime to see all the patients Providence is having us admit to our services,” Thompson said. “And we fear that it will be worse with Compassus."

A 2023 systematic review of the research on private equity ownership and its impacts on health outcomes, costs, and quality found that private equity ownership was associated with reduced nurse staffing levels.

Other typical cost-cutting measure employed by private-equity investors in hospitals include relying on less expensive staff with fewer qualifications, skimping on healthcare supplies, and delaying important capital improvements, like equipment and building maintenance.

“When you look at the kind of cuts private equity organizations have made at other facilities, you can’t help but worry about the quality of care,” Thompson said. “We care deeply about providing the best possible care to people in their homes. Often that includes spending time to make sure the patient understands what they need to do and listening to their concerns. If we’re pushed to take care of more patients more quickly, that wouldn’t be good for us as nurses or, most importantly, to the patients we serve.”

Private equity is a type of alternative investment that is usually funded by large investors and not publicly traded, so they don’t have to file financial information with the Securities and Exchange Commission.

“The opacity makes it easier for private equity to make investment decisions that can enrich a few at the expense of many,” AFT said in a recent report.

PVNA isn’t the only service affected by this joint venture. The mammoth deal transfers operations from Providence to Compassus at 42 home health, hospice, community-based palliative care, and private duty service providers in five states, according to documents provided by Providence to employees. It represents a major push into western states. Currently, Compassus operates at over 270 sites in 30 states, mainly in the East, South, Midwest, and Southwest.

“This could be the first toe in the water for Providence in bringing private equity into our facilities,” said Mike Sanderson, WSNA general counsel, who is negotiating the contract at PVNA.

Providence has told WSNA-represented nurses at PVNA that the labor contract they are currently negotiating will transfer over, but with certain exceptions, which Compassus will have to bargain over with WSNA. It is unclear what those exceptions may be. Providence also says all current nurses will continue to be employed.

But Providence has indicated that Compassus will seek some significant changes to nurses’ benefits, telling nurses that when Compassus takes over, they will have to cash out their paid time off and start at zero with the new company. All the sick time they’ve accumulated in their Earned Illness Banks will be lost. Providence also indicated that Compassus does not intend to cover nurses under Providence’s health insurance plan, pension plan and tuition reimbursement program Providence currently provides.  However, these would be subjects of bargaining between WSNA and Compassus.

The most notable case of how bad private equity ownership can be is the implosion last summer of Steward Health, owned by the private equity firm Cerberus Capital Management from 2010 to 2020.

Steward filed for Chapter 11 bankruptcy in May 2024, prompting U.S. Senate hearings into what happened and the role of private equity in the system’s fall. The summary of a report released by Sen. Ed Markey (D-Mass) just prior to the hearing states: “Steward Health Care — alongside Cerberus Capital Management and Medical Properties Trust — gutted dozens of hospitals across the United States in order to extract maximum profit. In doing so, Steward became a case study of the extent of harm that corporate greed can have on health care access, quality, and safety.”

Nurses at Providence VNA hope Compassus will operate more ethically than Cerberus did with Steward Health, but they remain concerned about the future under a company with substantial private equity ownership.