Request for Information on Consolidation in Health Care Markets

The document outlines the risks associated with private equity's expansion into various U.S. healthcare sectors, detailing financial strategies that prioritize short-term profit over patient safety and recommending stronger regulatory oversight.

• Private equity assets under management grew from less than $1 trillion in 2004 to more than $13.1 trillion, with healthcare investments reaching a peak of 515 deals valued at $151 billion in 2021.
• The private equity business model often employs financial tactics that divert resources away from patient care, including leveraged buyouts, sale-leaseback of real estate, debt-funded dividends, and the charging of management fees for services that may never be rendered.
• In the durable medical equipment (DME) sector, private equity consolidation has been linked to reduced staffing and training for wheelchair repairs, as well as significant fraud settlements, such as Apria Healthcare's $40.5 million settlement in 2020.
• Private equity's influence in the dental industry, primarily through Dental Services Organizations (DSOs), may incentivize quantity over quality, potentially leading to unnecessary procedures to meet revenue targets.
• The case of Benevis (formerly Kool Smiles) illustrates the risks of private equity ownership, involving a $23.9 million settlement in 2018 for billing medically unnecessary pediatric dental services under the ownership of Friedman Fleischer & Lowe.
• Private equity has rapidly entered the fertility treatment market, with PE-owned providers accounting for 29.3% of all Assisted Reproductive Technology (ART) cycles in the U.S. in 2018 and showing a higher likelihood of pushing costly elective add-ons.
• Private equity consolidation in autism services, specifically Applied Behavior Analysis (ABA) therapy, has been associated with lower staffing and training levels and pressure to bill for more hours than medically necessary.
• Research on physician practices indicates that private equity acquisitions are associated with price increases (ranging from 4% to 16% across various specialties) and higher per-patient expenditures.

APA

Private Equity Stakeholder Project (2024). Request for Information on Consolidation in Health Care Markets. https://pestakeholder.org/wp-content/uploads/2024/06/Multiagency-Healthcare-RFI-FINAL-5-24-24.pdf

Chicago

Private Equity Stakeholder Project. Request for Information on Consolidation in Health Care Markets. 2024. https://pestakeholder.org/wp-content/uploads/2024/06/Multiagency-Healthcare-RFI-FINAL-5-24-24.pdf.

Wikipedia

{{cite press release |author=Private Equity Stakeholder Project |title=Request for Information on Consolidation in Health Care Markets |date=24 May 2024 |url=https://pestakeholder.org/wp-content/uploads/2024/06/Multiagency-Healthcare-RFI-FINAL-5-24-24.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{privateequitystakeholderproject2024request, author = {{Private Equity Stakeholder Project}}, title = {{Request for Information on Consolidation in Health Care Markets}}, publisher = {Private Equity Stakeholder Project}, year = {2024}, month = may, url = {https://pestakeholder.org/wp-content/uploads/2024/06/Multiagency-Healthcare-RFI-FINAL-5-24-24.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }