Private Equity in US Healthcare: Trends in 2023 Deal Activity

In 2023, private equity dealmaking in US healthcare continued a two-year decline from its 2021 peak, driven by high interest rates and labor shortages. Despite this, the Private Equity Stakeholder Project (PESP) identified 1,135 unique deals, with add-on acquisitions comprising 64% of activity. Outpatient care, dental care, health IT, and medtech were the most active subsectors. The report highlights that high debt loads associated with private equity ownership led to several major bankruptcies in 2023, including Envision Healthcare and GenesisCare. PESP argues that the pursuit of short-term returns often results in cost-cutting that harms care quality and recommends expanding federal and state pre-merger review processes to include all private equity-backed healthcare transactions.

• Private equity dealmaking in the US healthcare sector declined for the second consecutive year in 2023, influenced by macroeconomic factors including labor shortages and high interest rates.
• PESP identified 1,135 unique healthcare deals in 2023, involving approximately 675 different investors. These consisted of 728 add-on acquisitions, 259 growth/expansion investments, and 148 buyouts.
• Add-on acquisitions were the dominant strategy in 2023, representing 64% of all tracked private equity-backed healthcare deals. Quad-C Management was the most active firm by deal count, executing 31 add-on acquisitions.
• Outpatient care was the most active category with 195 deals, followed by dental care (146 deals) and medtech (121 deals). Within outpatient care, eye care was the most active subcategory with 35 deals.
• Rising interest rates have turned the high debt used to fund private equity investments into a liability, contributing to the 2023 bankruptcies of American Physician Partners, Air Methods, Envision Healthcare, and GenesisCare.
• Private equity firms have heavily penetrated the dental industry via Dental Services Organizations (DSOs), with PE firms owning 27 of the top 30 DSOs as of 2021, accounting for 84% of affiliated practice locations.
• In the oncology sector, TPG Capital acquired OneOncology in June 2023 for a reported $2.1 billion, a deal that included a minority stake from AmerisourceBergen (now Cencora) to secure drug distribution.
• Private equity investment in fertility treatment is growing rapidly, with PE-owned providers accounting for 29.3% of all Assisted Reproductive Technology (ART) cycles in the US in 2018.
• The report argues that private equity's focus on short-term returns (typically 3-7 years) leads to cost-cutting measures such as understaffing and reliance on unlicensed staff, which negatively impacts patient care and worker conditions.
• PESP recommends that the Hart-Scott-Rodino Act be amended to require reporting and review of all private equity-backed healthcare acquisitions regardless of dollar value, and that review authority be extended to the US Department of Health and Human Services.

APA

Bugbee, M., O’Grady, E., & Fenne, M. (2023). Private Equity in US Healthcare: Trends in 2023 Deal Activity. Private Equity Stakeholder Project. https://pestakeholder.org/wp-content/uploads/2024/03/PESP_report_2023-Healthcare-Acquisitions_March-2024.pdf

Chicago

Bugbee, Mary, Eileen O’Grady, and Michael Fenne. Private Equity in US Healthcare: Trends in 2023 Deal Activity. Private Equity Stakeholder Project, 2023. https://pestakeholder.org/wp-content/uploads/2024/03/PESP_report_2023-Healthcare-Acquisitions_March-2024.pdf.

Wikipedia

{{cite report |last1=Bugbee |first1=Mary |last2=O’Grady |first2=Eileen |last3=Fenne |first3=Michael |title=Private Equity in US Healthcare: Trends in 2023 Deal Activity |publisher=Private Equity Stakeholder Project |date=2023 |url=https://pestakeholder.org/wp-content/uploads/2024/03/PESP_report_2023-Healthcare-Acquisitions_March-2024.pdf |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 in US Healthcare: Trends in 2023 Deal Activity}}, institution = {Private Equity Stakeholder Project}, year = {2023}, url = {https://pestakeholder.org/wp-content/uploads/2024/03/PESP_report_2023-Healthcare-Acquisitions_March-2024.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }