Changes in Hospital Income, Use, and Quality Associated With Private Equity Acquisition

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Abstract
Private equity investment in health care has markedly increased in recent years. The total disclosed value of private equity deals in health care reached $78.9 billion in 2019, up from $23.1 billion in 2015.1,2 Private equity firms use capital from institutional investors and individuals to acquire assets, such as hospitals and physician practices. After acquisition, private equity fund managers use the control offered by their newly purchased ownership stake to increase the value of the asset before selling it generally for a profit, typically in 3 to 7 years. Common strategies to enhance the value of acquired businesses include cutting costs and increasing efficiency.

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