Non-public fairness investments have grown in well being care lately. In keeping with Appelbaum and Batt (2020), whereas in solely 4.7% of leveraged buy-outs (LBO) had been in well being care in 2000, that quantity had risen to 12.2% in 2019.
A 2022 white paper finds that investments in well being care have risen much more:
The variety of offers rose 36% to 515, up from 380 the prior 12 months. Complete disclosed worth greater than doubled to $151 billion from $66 billion (see Determine 1). The typical disclosed deal worth soared 134%, primarily due to 5 buyouts larger than $5 billion, in contrast with simply 1 the 12 months earlier.
The 5 largest offers in 2021 included purchases of Medline Industries ($34.0 billion), Athenahealth ($17 billion), Parexel ($8.5 billion), Inovalon ($7.3 billion), Cerba Healthcare ($5.3 billion). Different investments embody these in “telehealth, digital health and health information technology” in addition to provider acquisitions.
President Biden is skeptical about non-public fairness investments in well being care and even talked about points associated to non-public fairness takeovers of nursing houses in his 2022 State of the Union Address. However, it stays to be seen if non-public fairness investments can assist present further funds to cut back price and enhance outcomes, or not. Extra particularly, which varieties of healthcare would profit most from non-public fairness investments? We will all agree that well being care may gain advantage from further use of know-how to enhance outcomes and make processes extra environment friendly. Will non-public fairness investments be a strategy to obtain these targets? Solely time will inform.