In recent years, private equity firms have been increasingly involved in the healthcare sector, particularly in emergency rooms. This has raised concerns among federal officials, who are conducting an inquiry into the impact of private equity ownership on healthcare. The Federal Trade Commission, Department of Justice, and Department of Health and Human Services are all involved in this investigation.
According to Sabrina Howell from NYU’s Stern School of Business, private equity ownership in the healthcare sector has grown significantly in recent years. It is estimated that about 25% of emergency room departments are now staffed by private equity-owned physician companies, double the rate from a decade or two ago. This growth has sparked concerns about how private equity’s profit-maximizing focus is influencing healthcare costs, staffing levels, and patient safety.
Loren Adler from the Center on Health Policy at Brookings notes that private equity-owned companies have been found to raise prices for patients and consumers. However, the impact on the quality of care is still uncertain. The ongoing federal inquiries aim to clarify this impact and address key questions around healthcare quality in private equity-owned facilities.
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