Although private equity (PE) sponsors have been active investors in the health care services industry for the last decade, PE-backed health care providers today constitute only 4% of the United States health market by revenue. Moreover, growth in PE investment in health care has slowed over the past six years. The year-over-year growth rate in the number of PE-backed health care companies has slowed from nearly 25% in 2018 to less than 1% in the first quarter of 2024 .
[i] Despite the relative lack of depth of PE investment in the health care sector, government and media attention has grown dramatically targeting PE sponsors and highlighting concerns over the care of patients, the maintenance of facilities, and the treatment of employees. Some of the concerns may have merit in some cases, while many are misplaced or applied with too broad a swath. Nonetheless, private equity investment is not going away in short term, and recent trends show an uptick in private equity in oncology, a key topic discussed at the September 2024 Cancer Care Business Exchange .
Overshadowing the deal activity are a number of quickly evolving legal and regulatory trends, that investors and providers alike should take into account. Government Scrutiny of PE-Backed Health Care Providers Appears Likely to Continue to Increase The Federal Government and various state governments have set their sights on health care private equity investors. This focus has included, among other things, proposed Federal le.
