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Almost 90% of the health care companies deemed to be under financial stress by a leading credit rating agency are owned by private equity, a stark indicator of the toll financial investors have taken on a vital sector.

The striking finding is part of a new Moody’s Investors Service report released this week that shows broad turbulence throughout an industry weakened by private equity’s practice of loading companies with debt, making them less resilient to challenges like Covid-19, rising interest rates, litigation, or changes from a new federal law against surprise billing. Among the 193 North American health care companies Moody’s rates, the agency had placed almost 18% at or below its rating that indicates credit stress, B3 negative, as of Nov. 30. That’s compared with just 4% at the end of 2015.

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