The vast majority of private equity-backed mental health companies that take insurance prioritize commercial health plan patients. This strategy has led to head-turning adjusted earnings margins.
An analysis of companies tracked by the data firm PitchBook, in partnership with Definitive Healthcare, finds that commercial health plans represent 92% of total charges and 86% of claims. Medicaid, the next most common payer for both charges and claims, represented 4% and 9%, respectively.
“This has allowed some providers to achieve [earnings before taxes, depreciation and amortization] margins in the 30% to 39% range or higher,” PitchBook said in its second-quarter report on private equity activity in health care services, reports Behavioral Health Business. Read more.
