Private Equity Investment in Surgical Care

Area of Science:

• Healthcare Economics
• Surgical Practice Management
• Health Policy

Background:

• Investor-backed, for-profit private equity (PE) groups have rapidly increased healthcare investments over the past decade.
• The scope of PE influence on surgical practice remains largely unquantified.
• Understanding PE's role is crucial for assessing its impact on healthcare delivery.

Purpose of the Study:

• To quantify the extent of private equity (PE) investment in surgical care.
• To identify the surgical specialties and related sectors most affected by PE acquisitions.
• To analyze the trends and mechanisms of PE involvement in surgical practice consolidation.

Main Methods:

• Utilized four national databases to identify all merger and acquisition transactions involving surgical practices from 2015 to 2019.
• Determined the proportion of these transactions financed by PE.
• Linked acquisition data with physician datasets to assess the impact on surgical professionals and practice sites.

Main Results:

• Identified 1542 unique transactions, with 539 financed by PE, involving 58 specific surgical categories and 199 practice sites with 1405 physicians.
• Digestive disease, orthopedics, and urology showed the highest PE activity, peaking in 2017 with 63 practices.
• Anesthesiology, ambulatory surgery centers, and staffing firms were significant "surgery-adjacent" sectors, with anesthesiology leading in practice and physician involvement.

Conclusions:

• Private equity has substantially invested in and consolidated surgical specialties.
• These PE investments permeate all healthcare levels, with significant implications for patients, practitioners, and policymakers.
• Further research is needed to understand the long-term effects of PE consolidation on surgical care quality and access.