PE investments 'shaping the healthcare ecosystem,' report says

Private equity investors have a growing influence in the healthcare industry, investing more than $1 trillion during the past decade, mostly in skilled nursing facilities, hospitals and specialty physician's groups, according to a report published last week in the journal Health Affairs. PE acquired more than $200 billion in healthcare properties in 2021 alone during the instability of the pandemic era, the authors noted. PE investors owned 11% of nursing homes and 7.3% of hospices that year. By 2024, at least 1,049 unique healthcare deals involved at least 676 PE firms. That's an average of 87 deals per month. 'The outcomes of PE ownership are highly dependent on the type of practice, the market in which that practice is located and the strategies PE firms employ in those organizations,' the authors said. 'Nonetheless, as the volume of PE-owned practices continues to increase, there are emerging trends in the landscape that can cut across individual markets and provide meaningful insights into how PE may be shaping the healthcare ecosystem.' PE ownership can be associated with negative clinical outcomes, the authors noted. For example, residents might have reduced access to care in private equity-owned facilities, as investors might close less profitable service lines. In some cases, however, PE was found to have some positive outcomes, such as a decrease in COVID-19 outbreaks in staff members and residents in PE-owned nursing homes.