Group Slams Private Equity Control Of U.S. Health Care

Private equity ownership of US health care providers is incompatible with the needs and best interests of patients and should be checked with federal legislation, a report published by the consumer advocacy group Public Citizen, Brett Wilkins reported for Common Dreams.

Photo Insert: The US Department of Health and Human Services

Critics of for-profit care have long decried private equity's focus on maximizing returns through practices including slashing staff, surprising patients with astronomical bills, and eschewing low-margin care upon which vulnerable populations rely.

The new report—authored primarily by Public Citizen healthcare policy advocate Eagan Kemp—examines investment firms' impact on more than a dozen healthcare sectors, from reproductive health through end-of-life care.

"Private equity acquisitions in the healthcare sector have steadily climbed since the financial crisis in 2009, particularly in the past five years," a summary of the report notes.

"Unlike acquisitions of hospitals, which typically occur under a public spotlight, the private equity industry's acquisitions of physician practices and other healthcare business lines often occur with little or no disclosure or public scrutiny, hindering the ability of regulators and watchdogs to monitor the effects of private equity ownership."

Private equity investors seek outsize returns on an accelerated timeline, generally aiming to exit investments in three to five years with returns of 20%-30% per year. This objective induces them to take short-sighted steps to supercharge profits or otherwise wring capital out of the assets they acquire.

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