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

Health care prices increase when private equity investors buy hospitals and physician practices.

Private equity investment finds its way into health care, raising prices for all.

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. 

It is not a surprise that private equity firms and investors have entered the market to take advantage of monopoly pricing opportunities.

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:

The American health care system operates with little to no market constraints on pricing and billing.

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


Patricia Kelmar

Senior Director, Health Care Campaigns, U.S. PIRG Education Fund

Patricia directs the health care campaign work for U.S. PIRG and provides support to our state offices for state-based health initiatives. Her prior roles include senior policy advisor at NJ Health Care Quality Institute, associate state director at AARP New Jersey and consumer advocate at NJPIRG. She was appointed to the Ground Ambulance and Patient Billing Advisory Committee in 2022 and works with patient advocates across the U.S. Patricia enjoys walking along the Potomac River and sharing her love of books with friends and family around the world.