Virtual Event: Private Equity’s Role in Healthcare
By Jared Dashevsky, MD
As healthcare costs continue to rise, private equity firms are increasingly investing in healthcare companies, seeking to improve their profitability. While some argue that this influx of capital can bring much-needed innovation and efficiency to the industry, others are concerned about the potential negative impact on patient care and access to essential services.
Dr. Adam Brown and I explored the complex relationship between private equity and healthcare during our virtual event on private equity. We discussed the potential benefits and drawbacks of private equity investments, including their impact on patient care and access to essential services. Using case studies and real-world examples, we shed light on the broader healthcare ecosystem.
Read below for three key takeaways from our virtual event.
Three Key Takeaways
1) “Private equity has a big role in healthcare. Period. And part of the reason it is there is to help with investment, create capital, and efficiencies within the healthcare system. Is it all good? Not necessarily… is it all bad? Not necessarily.” (5:45)
2) “Ultimately, at the end of the day, benevolence isn’t traded on a stock market floor. It’s profitability. And that doesn’t necessarily mean it’s profit over patients per se, but the incentive is so strong for profitability, that the [focus] can shift. So, one point that’s important to remember is how important it is to have a physician engaged in no matter what deal that happens. A physician has to be there on the business side. “ (16:40)
3) So, where do I see [PE] going? There are only a couple of places you can get capital for innovation and investment, and one is the private sector (e.g., PE) and the public sector (e.g., government). And, there are a lot of ‘antibodies’ towards full government funding in the healthcare system. I don’t think that PE is necessarily going anywhere, but there may be some regulatory guardrails that need to come up: one them being from HHS looking at outcomes, making sure quality is maintained. But also, shifting the payment system fully from a fee-for-service system to more aggressively moving into a value-based care system, which incentivizes outcomes.” (21:20)
- Private Equity in Healthcare: the Good, the Bad, and the Ugly (link)
- Healthcare M&A and Private Equity State of Play (link)
- The Business of Death (link)
- The Golden Age of Older Rectums (link)
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- 🎵 Private Equity Playlist: Check out my private equity playlist that I played before the event started to set the mood.
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