Private equity has become a seemingly permanent fixture in the U.S. healthcare system, with investments topping $1 trillion over the last 10 years.
As private equity investments have expanded, so has “a body of literature questioning its implications for the cost, quality, accessibility and equity of care,” according to an article published May 11 in The American Journal of Managed Care.
The article’s authors identify the role of regulatory initiatives in shaping a “more responsible future for PE in healthcare,” while providing an overview of the scope of PE’s presence in healthcare.
Here are 15 takeaways from the report:
1. Between 2018 and 2022, global health care investments reached $446 billion, and in 2024 alone, global healthcare deal values were estimated at $115 billion, demonstrating the exponential growth of private capital investments in the healthcare space as investors identify new opportunities across practice settings.
2. PE first entered healthcare in the 1990s, with investments spiking after the passage of the Affordable Care Act, according to the report. This growth has been sustained by fee-for-service reimbursement policies, the fragmentation of services and “an inadequate regulatory environment,” making it an ideal space for arrangements that incentivize innovation.
3. PE deals number into the hundreds each year, according to the report. In the outpatient space alone, Becker’s reported on 21 PE-backed deals in January 2026. This makes it a challenging space for regulators to keep pace.
4. Healthcare, and especially physician practices, have seen a number of consequences of this activity. According to the Private Equity Stakeholder Project, in 2023, at least 21% of the healthcare companies that filed for bankruptcy were owned by private equity. And nearly 90% of healthcare entities in the U.S. rated as having a high risk of default by Moody’s Investors Services were owned by PE firms.
5. A literature review published in 2023 by BMJ analyzed studies between 2000 and 2023, and found that private equity ownership of U.S providers increased healthcare costs to patients and payers in 9 of 12 cases — and decreased costs in none.
6. There may also be safety concerns related to PE acquisitions of medical practices, the report points out, as many firms seek to cut operational costs as quickly as possible. Payroll is commonly one of a practice’s biggest expenses, and therefore one of the most direct ways to cut costs.
However, reduced staffing is correlated with increased rates of patient harm, according to a 2021 JAMA study. That study found that residents of nursing homes owned by PE firms were 11% more likely to have an ED visit and almost 9% more likely to experience hospitalization resulting from a health condition that could have been prevented or controlled with adequate outpatient treatment than residents at other for-profit nursing homes.
7. Similarly, a 2023 evaluation of hospital quality and outcomes published in the International Journal for Quality in Health Care found that PE ownership was connected to a 25% increase in hospital-acquired conditions, such as falls and central-line associated infections. These events are easily affected by the ratio of staff to patients and the composition of staff, especially when nurses are replaced with non-register nurse staff.
8. The report noted that the regulation of PE in healthcare has historically depended on reporting requirements.
“The Hart-Scott-Rodino Antitrust Improvements Act serves as a prime example, mandating that acquisitions exceeding $133.9 million be reported to federal antitrust authorities,” the AJMC report said. “In principle, the HSR Act is designed to bolster transparency. In practice, the act has not effectively countered PE’s opaque ownership structures. For example, in 2022, when the HSR reporting threshold stood at $101 million, more than 90% of PE investments went unreported.”
9. At least 79 bills addressing PE transactions and investor-backed ownership in healthcare have sprung up across at least 26 states in 2026. Notably, a recent lawsuit filed by Eugene, (Ore.) Emergency Physicians against Vancouver, Wash.-based PeaceHealth and Atlanta-based staffing company ApolloMD spotlighted Oregon’s novel corporate medicine law, considered by many to be the strictest of its kind in the nation.
10. In order to curb the negative impact of PE investments in healthcare, the authors suggest a pivot away from traditional policymaking in this realm, which has largely aimed to increase transparency, accountability and competition.
“Although these efforts represent important steps toward oversight, empirical evidence on their effectiveness remains limited; where data exist, findings are mixed,” according to the report. “While researchers should continue to critically evaluate these policies, a forward-looking agenda is equally necessary.”
11. The AJMC report authors suggest that effective oversight must acknowledge PE’s influence through its financial methods and through clinical and operational behaviors that their methods derive. This will require a “reimagination” of antitrust law, as health outcomes and patient experience are not things that are directly addressed in most national antitrust laws.
“Regulators should also consider redefining merger and acquisition review criteria to reflect cost, quality, and access indicators. As a complement, policy should be introduced to enable the evaluation of rollups, encourage longitudinal posttransaction monitoring, and limit debt financing of acquisitions,” the authors recommend. “Together, these proposals might help close loopholes that currently allow firms to circumvent reporting requirements.”
12. The report also recommends that Congress consider revising ACA Section 6001 to combat PE-associated violations of physician autonomy and clinical decision-making by lifting restrictions on physician-owned hospitals.
13. The authors also suggest that federal regulators should transition away from FFS billing and toward alternative payment models that are more difficult for PE firms to exploit through constraining resource use and other strategies.
14. “Likewise, policies (including Medicare reimbursement incentives) should be put in place to intentionally guide PE capital toward long-term investments in high-need areas,” the authors write. They emphasized the need for regulators to disrupt the PE investment model by shifting their focus away from short-term gains and rapid expansion into high-margin specialties, and towards more preventive services and investments in long-term health outcomes.
15. While the authors acknowledge that some policy initiatives must be tailored to local contexts, policymarkers should align state and federal regulations whenever possible.
“In practice, this means focusing on consensus issues. For example, both state and federal regulators have an interest in strengthening patient protections against PE’s documented risks; this might involve aligning oversight standards between CMS and state-level payer programs,” read the report.
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