The presence of private equity investment has exploded in recent years in all areas of the health care sector.
PE in health care is a good thing when done right: It can pave the way for much needed innovation, efficiency, and nontraditional care delivery models, writes The National Law Review. However, government regulators, media journalists, some health care practitioners, and private parties are watching PE investment with growing suspicion that profit-driven goals may conflict with the quality of care for patients. Indeed, PE firms often do not have the luxury of long time horizons for their investments and often have investors that expect relatively quick financial returns. News outlets have added fuel to concerns by publishing reports alleging decreases in quality care when PE firms acquire health care businesses. Additionally, PE firms do not always appreciate the complex regulatory environment in which health care operates — an environment where a regulatory misstep can become a major fraud and abuse issue. That is drawing the focus of government enforcers. Meanwhile, PE investment is capturing the attention of antitrust regulators concerned about industry roll-ups and the lessening of competition. Read more.
