Steady private equity (PE) activity in rural healthcare warrants heavier scrutiny and regulatory reform, argues a new report from the Private Equity Stakeholder Project.
PESP, a nonprofit that advocates for more disclosure about private equity deals, examined rural hospital ownership, buyouts of non-hospital rural healthcare companies and policies that incentivize these trends. Additionally, the report proposes policy recommendations to ensure providers are protected from profiteering, reports Fierce Healthcare.
The problems of rural healthcare—poorer access to care and worse outcomes—make it “clear that there is a critical need for investment in rural healthcare,” the report said. “Private equity appears to see opportunity to profit.”
PE firms have created dedicated rural investment funds and bought up rural healthcare companies. This investment carries “unique risk.” By prioritizing high returns and profits, PE firms may sacrifice staffing or reduce access to less profitable services that may still be greatly needed by patients.
The report used various data sources from the Centers for Medicare and Medicaid Services to the Sheps Center for Health Services Research and Pitchbook. Read more.
