What happens when private equity buys up our hospitals and doctors?

We’re spending more than ever on health care. The most recent report showed that national health expenditures in 2022 grew more than four percent. The total number is a mind-boggling amount – $4.5 trillion in 2022. To understand that incomprehensible number, it breaks down to $13,493 per person.

All is not lost. There are still many things we can do to keep health care costs down. We know competition works well to drive down prices. That’s why PIRG supports policies that increase competition in the health care system.

We seized upon the opportunity to share our ideas with three federal departments (Justice, Labor and Health and Human Services) when they “jointly launched a cross-government public inquiry into private-equity and other corporations’ increasing control over health care.”

We submitted comments to urge our federal government to implement solutions that prevent business investments that  act simply to drive up prices, not deliver better care.

Unfortunately, today’s health care delivery and payment system is ripe for abuse because of market consolidation and unchecked anti-competitive tactics used by large health care corporations. 

The mission of private equity companies is to return large payouts to their shareholders, not to operate a high quality, patient-focused health care system. Yet, shockingly, private equity buyouts represented 45% of health care mergers and acquisitions in 2018. And the creep of profit-driven investors into almost all sectors of health care service continues.

Private equity management and ownership is found in hospice centers, nursing homes, ambulance networks (air and ground), urgent care, hospitals and emergency rooms, as well as physician groups and specialty practices. 

PIRG explained that private equity investments in health care signal the root of the problem:

In our comments, we urge the tri-agencies to focus enforcement and regulatory efforts to put a stop to over-pricing, fraud and billing abuse. Cracking down on these abuses will stem the interest of private equity investors in health care. If they can’t siphon off huge profits, they’ll leave the health care sector.

We want the federal government to promote policies that:

1. Preserve competition by enforcing antitrust and other regulations in the health care markets.
2. Protect patients, health care professionals and employees, and health care programs by investigating fraud, wasteful spending, and dishonest billing, including harmful actions/tactics used by PE investors.
3. Increase transparency in health care ownership, with a special emphasis on private equity.

If you have faced a medical billing problem or feel you were overcharged, let us know here.