Antitrust and Unfair Competition Law

Competition: FALL 2022, Vol 32, No. 2

INCREASING PRIVATE EQUITY INVESTMENTS IN HEALTHCARE RAISE ANTITRUST AND UNFAIR BUSINESS PRACTICE CONCERNS

Written by Mary Mitchell1

I. INTRODUCTION

Changes in the regulation of U.S. financial markets that began in the 1980s have allowed private equity (PE) firms to thrive in the last few decades.2 In that time, PE investments in healthcare have increased steadily, particularly since 2010.3 PE firms now play a significant role in the ownership and management of many U.S. healthcare facilities and providers. In 2018, PE funds were involved in 45% of mergers and acquisitions in the healthcare sector.4

Whether private equity investment provides a net benefit or net detriment to the long-term quality of healthcare markets is the subject of much debate. Supporters argue that PE acquisitions increase efficiency and innovation for both doctors and patients while maximizing returns for investors. Medical practices can derive benefits from consistent access to capital, including referrals from other practices owned by the same PE firm.5 As a result, many physicians, especially those seeking to spend less time on the administrative side of medicine, have actively sought out PE ownership for their practices.6

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