Private investment in U.S. health care has grown significantly over the past decade thanks to investors who have been keen on getting into a large, rapidly growing, and recession-proof market with historically high returns. Private equity and venture capital firms are investing in everything from health technology startups to addiction treatment facilities to physician practices. In 2018, the number of private equity deals alone reached almost 800, which had a total value of more than $100 billion.
The Role of Private Equity in Driving Up Health Care Prices
It prioritizes short-term profits over patients’ health.
October 29, 2019
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Summary.
While private capital is bringing innovation to health care through new delivery models, technologies, and operational efficiencies, there is another side to investors entering health care. The impact of their common business model of buying, growing through acquisition or “roll-up,” and selling for above-average returns is cause for concern — and probably unsustainable.
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