A new investigation by KFF’s Kaiser Health News (KHN) lays bare the sizeable efforts by private equity investors to take over large and lucrative parts of the U.S health care system in recent years. KHN found that private equity firms have invested nearly $1 trillion through thousands of deals to acquire hospitals and specialized medical practices during the last decade alone.
The deals, many of them unnoticed by federal regulators, typically result in a ratcheting up of providers’ pursuit of profits – and higher prices for patients, lawsuits, and complaints about quality of care.
The investments range widely and include the acquisitions of physician practices, dental clinic management companies, companies that treat autism, drug addiction and other behavioral health care, and ancillary services such as diagnostic and urine testing labs and software for medical billing. Through other deals, companies tied to private equity have come to dominate specialized medical services such as dermatology, gastroenterology, and anesthesiology in certain markets around the country. All of it has come on top of better-publicized takeovers of hospital emergency room staffing firms as well as the buying up of entire rural hospital systems.
Federal regulators have been almost blind to the incursion. KHN found that more than 90 percent of private equity takeovers or investments fell below the $100 million threshold that triggers an antitrust review by the Federal Trade Commission and the Justice Department.
Whistleblowers and injured patients, however, have turned to the courts to press allegations of misconduct or other improper business dealings. KHN found that companies owned or managed by private equity have agreed to pay fines of more than $500 million since 2014 to settle at least 34 lawsuits filed under the False Claims Act. Most of the time, the private equity owners have avoided liability.
The latest story, published today in USA Today, is part of a broader ongoing series, “Patients for Profit: How Private Equity Hijacked Health Care” in which KHN has examined a wide range of private equity’s forays into the health care system. They include the marketing of America’s top-selling abortion pill, the establishment of “obstetric emergency departments” at some hospitals, investments in the booming hospice care industry and even takeovers of funeral homes and cemeteries. The series includes a video primer, “How Private Equity Is Investing in Health Care”.
KHN collaborates with many editorial partners, and media outlets can publish these and other KHN stories at no charge. KHN also will publish the stories on khn.org and promote them through its social media platforms. KHN journalists also are available for interviews about their stories. News organizations interested in working with KHN should contact the news service at KHNPartnerships@kff.org, and those interested in helping to expand and improve health journalism around the country should contact KFF at firstname.lastname@example.org.
About KFF and KHN
KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. Together with Policy Analysis, Polling and Survey Research and Social Impact Media, KHN is one of the four major operating programs at KFF (Kaiser Family Foundation). KFF is an endowed nonprofit organization providing information on health issues to the nation.