Private equity benefits from HHS loans meant to help health care providers during pandemic
Private equity companies have borrowed at least $1.5 billion from the federal government through programs intended to provide emergency funding to struggling health care companies during the coronavirus pandemic, Bloomberg reports.
Between the lines: Some of the hospitals, clinics and treatment centers benefiting from the Medicare loans — which could plausibly end up being forgiven — are owned by the richest investment firms.
Details: Some of the firms that have received such loans are swimming in cash.
- KKR, which has received $60 million via subsidiaries of KKR-owned companies, has more than $58 billion of cash to invest.
- Apollo Global Management started the year with about $46 billion, but its health care facilities received at least $500 million in loans.
- Steward Health Care System, owned by Cerberus Capital Management, received at least $400 million. Cerberus was attempting last month to grow one of its investing funds to $750 million. Steward physicians announced yesterday that they are buying the company from Cerberus.
The big picture: The HHS programs making the loans were expanded by Congress earlier this year to help health care companies financially slammed by the pandemic, as elective care skid to a halt.
- CMS administrator Seema Verma told Bloomberg that the agency's goal was to get the money out quickly. "We don't look into ownership, what we look into is are they Medicare-enrolled providers," Verma said.
- KKR has been in the political spotlight for months for its role in the surprise billing debate.