Investors spent about $1tn buying healthcare facilities over last decade, leading to reports of worsening patient care.
Private equity investment in healthcare is rapidly expanding, with a growing focus on hospice care facilities, according to a recent study published in Health Affairs.
This trend highlights the increasing involvement of private equity in all aspects of healthcare, particularly in hospice centers that provide end-of-life care.
The study shows a significant rise in acquisitions by private equity firms, with ownership of hospice facilities growing from a few in 2015 to nearly three dozen by 2021. Some firms now own multiple hospice centers across multiple states, with the majority of acquisitions occurring in southern states.
Private equity's interest in healthcare stems from its profitability, as the industry is seen as a lucrative investment opportunity.
However, critics, including Dr. Vikas Saini, president of the Lown Institute, argue that private equity’s profit-driven motives may conflict with the compassionate, patient-centered care that hospices are meant to provide.
Unlike publicly traded companies, private equity firms operate with less transparency, raising concerns about the long-term impact on healthcare quality. The study's findings were uncovered through cross-referencing private databases and Medicare data, shedding light on the extent of private equity's growing footprint in the hospice sector.