Is private equity going out of style?

Private equity has been in the hot seat as its involvement in healthcare has been scrutinized by both federal agencies and physicians.

According to a survey published in JAMA Network Internal Medicine, more than 60% of physicians have a negative opinion of private equity's role in healthcare. Just 10.5% of physicians said they view private equity as positive.

A study published in the Journal of the American Medical Association found that private equity-backed hospitals may have worse quality of inpatient care.

Private equity has shown signs of slowing down in healthcare over the past year. In 2023, healthcare private equity transactions saw an estimated 16.2% year-over-year decline, according to PitchBook's 2023 "Healthcare Services Report." 

Though private equity can be a win financially for healthcare organizations, issues still arise. In 2023, more than 20% of the healthcare bankruptcies were by private equity-backed companies.

Private equity has put down roots in healthcare, especially in the ASC setting, but its long-term effects on the industry are to be determined.

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