Health Systems and Private Equity: Adversaries Turned Allies
- March 24, 2023
- Isaac M. Willett , Faegre Drinker Biddle & Reath LLP
- Jamie Levin , Faegre Drinker Biddle & Reath LLP
- Carly Helman , Faegre Drinker Biddle & Reath LLP
- Jacob Hauschild , Faegre Drinker Biddle & Reath LLP
Private Equity (PE) firms have been actively investing in health care companies for decades. It’s difficult to say exactly when PE firms first started pursuing health care providers, but the rise and fall of the PE-sponsored physician practice management (PPM) companies of the 1990s has been analyzed and discussed in depth by health care industry experts. While some of those PPMs are alive and well today, many went bankrupt by the early 2000s. More recently, health care-focused PE firms have been devoting their capital to physician practice roll-ups across numerous medical specialties. These activities have driven significant consolidation within certain medical specialties and have largely positioned PE firms as competitors to hospitals and health systems (HHSs) that are finding it increasingly difficult to achieve optimal levels of physician alignment.
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