Private Equity Healthcare 2023 Trends

The report identifies 1,135 private equity-backed healthcare deals in 2023, noting a decline from 2021 peaks due to high interest rates and labor shortages. While outpatient care, dental care, and medtech were the most active subsectors, the report warns that the private equity model of short-term profit and high debt leads to cost-cutting and bankruptcies, as seen with Envision Healthcare and GenesisCare. It recommends expanding federal and state pre-merger reviews to protect healthcare quality and access.

• Private equity dealmaking in healthcare declined for the second consecutive year in 2023, driven by macroeconomic factors including labor shortages and high interest rates that made securing financing for debt-funded deals more difficult.
• In 2023, the Private Equity Stakeholder Project (PESP) identified 1,135 unique healthcare deals involving approximately 675 different investors. These consisted of 728 add-on acquisitions, 259 growth/expansion investments, and 148 buyouts.
• The most active healthcare subsectors for dealmaking in 2023 were outpatient care, dental care, health IT, and medtech, with biotech, pharmaceuticals, and medical aesthetics also seeing significant activity.
• High debt burdens associated with private equity funding became a significant liability in 2023 as interest rates rose, contributing to the bankruptcy of several major companies including American Physician Partners, Air Methods, Envision Healthcare, and GenesisCare.
• In the dental care sector, private equity firms utilize Dental Services Organizations (DSOs) to manage business operations, which the report claims allows them to avoid regulations prohibiting investor ownership of clinical practices.
• Private equity investment in the fertility treatment market is growing rapidly, with PE-owned providers accounting for 29.3% of all Assisted Reproductive Technology (ART) cycles in the US as of 2018.
• The report highlights risks in the behavioral health and therapeutic foster care sectors, noting that cost-cutting tactics such as relying on unlicensed staff and failing to maintain facilities can lead to abuse and neglect of vulnerable youth.
• In the clinical research space, private equity firms are increasingly investing in contract research organizations (CROs) to profit from efficiencies in drug and device development without bearing the risk of a product failing to reach the market.
• The report recommends that the US Department of Health and Human Services, the FTC, and the DOJ expand pre-merger reviews to include all private equity-backed healthcare transactions regardless of dollar value.

APA

Bugbee, M., O’Grady, E., & Fenne, M. (2023). Private Equity Healthcare 2023 Trends. Private Equity Stakeholder Project. https://pestakeholder.org/private-equity-healthcare-2023-trends/

Chicago

Bugbee, Mary, Eileen O’Grady, and Michael Fenne. Private Equity Healthcare 2023 Trends. Private Equity Stakeholder Project, 2023. https://pestakeholder.org/private-equity-healthcare-2023-trends/.

Wikipedia

{{cite report |last1=Bugbee |first1=Mary |last2=O’Grady |first2=Eileen |last3=Fenne |first3=Michael |title=Private Equity Healthcare 2023 Trends |publisher=Private Equity Stakeholder Project |date=2023 |url=https://pestakeholder.org/private-equity-healthcare-2023-trends/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{bugbee2023private, author = {Bugbee, Mary and O’Grady, Eileen and Fenne, Michael}, title = {{Private Equity Healthcare 2023 Trends}}, institution = {Private Equity Stakeholder Project}, year = {2023}, url = {https://pestakeholder.org/private-equity-healthcare-2023-trends/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }