Private Equity Acquisition in Primary Care and Avoidable Hospitalizations

Private equity (PE) is one form of corporate investment that has rapidly expanded into primary care, with more than 2400 primary care physicians becoming PE-affiliated since 2019. There are concerns that profit incentives associated with PE investment might be detrimental to care quality and patient outcomes.

To examine changes in patient outcomes for the traditional Medicare (TM) population after primary care practices are acquired by PE firms and to identify any changes in patient composition.

This economic evaluation used a stacked difference-in-differences analysis with a 20% Medicare Part B sample from 2016 to 2022. Medicare beneficiaries with PE-acquired primary care physicians were matched to control patients based on age, risk score, sex, race and ethnicity, state of residence, and dual-eligibility status. Statistical analysis was performed from November 2024 to February 2026.

Primary care practice acquisition by a PE firm, identified using PitchBook data.

Primary outcomes at the patient-quarter level include number of all-cause hospitalizations, number of potentially avoidable hospitalizations for ambulatory-sensitive conditions, and number of emergency department (ED) visits. Secondary outcomes include measures of patient composition, including patient age, sex, race and ethnicity, and hierarchical condition category score.

The analysis included 24 397 beneficiaries with PE-acquired primary care physicians, matched to 121 939 control patients. The mean (SD) age was 74 (10) years, and 56% of patients were female. After PE acquisition, the number of all-cause ED visits decreased by 1.36% (95% CI, -2.72% to -0.14%) per patient-quarter relative to baseline. Considering various sensitivity tests, there were no significant changes to the probability of or number of potentially preventable hospitalizations or all-cause hospitalizations. Patient composition remained unchanged.

In this national study of traditional Medicare beneficiaries, PE acquisitions of primary care practices were not associated with meaningful short-term changes in acute care outcomes. Overall, findings contribute to policy discourse on understanding the role of PE investments in shaping care quality, suggesting heterogeneity in outcomes across health care settings.