Healthcare Docket: Feds and States Move to Curb Private Equity’s Takeover of Healthcare
Will American healthcare go the way of the banking sector’s consolidation into a handful of all-powerful titans?
Will American healthcare go the way of the banking sector’s consolidation into a handful of all-powerful titans?
Private equity is a way to help achieve scale. Groups that use scale to better serve the stakeholders that matter most, including radiologists, hospitals, referring physicians and—most importantly—patients, will be best positioned to not just survive, but thrive.
At the Payer Insights sessions on Day 1 of ViVE 2024, a panel on prior authorization offered compelling insights from speakers who shared the positive developments in this area after years of mounting frustration. Speakers also shared challenges as they work with providers to figure out how policy developments and technology will work in practice.
As we look out over the horizon to 2023, we would anticipate a rebound of investment in the digital health space but with a simultaneous and a continuing level of focused regulatory diligence as this complex landscape continues to evolve.
The shifting of services to outpatient settings will likely cause hospitals to unwind their contractual relationships with cardiologists, sending the physicians back into private practice. Astute hospital administrators will have already anticipated the migration of cardiologists away from hospital inpatient care and started to prepare for a different type of alignment with cardiologists.
Private equity investors, with their focus on buying cheap and reaping quick returns, are moving voraciously into the U.S. health care system; investments increased twentyfold from 2000 to 2018, and have only accelerated since. Financially distressed rural hospitals are targets, putting vulnerable communities at the mercy of firms whose North Star is profit, rather than patient health.
While the pandemic has disrupted demand for certain healthcare sectors, it has accelerated innovation and provided an opportunity for investment in other areas. In particular, there's been rapid growth in virtual and home-based care delivery, along with the adoption of technology platforms.
Canada has a proud history of achievement in the areas of science and technology, and the field of biomanufacturing and life sciences is no exception.
While physicians face incredible pressures to consolidate or receive investment to survive, there are ethical, legal and practical considerations doctors must seriously consider before deciding to take private equity.
Independent practices are grappling with increasing technology costs, regulatory requirements, and tighter margins and now may be an opportune time to consider exiting.
2019 was a year of continued growth of private equity investment in healthcare and it's likely 2020 will provide more of the same, notwithstanding the uncertainty of the 2020 election and concerns over an eventual economic downturn.