A new Private Equity State Tracker developed by researchers at the School of Public Health’s Center for Advancing Health Policy through Research disrupts the fog enshrouding private equity investments in U.S. healthcare.
Focusing on hospitals and nine medical specialties, the tracker displays the expansion of PE through acquisitions in healthcare across the country between 2015 and 2023. The data is based on public reports from PitchBook, the Medicare Data on Provider Practice and Specialty and other records.
According to the CAHPR report — prepared for the National Academy for State Health Policy and the Commonwealth Fund — empirical evidence has increasingly found that PE acquisition of physician practices is associated with increases in health care prices and spending.
The fundamental principle of PE is “investor-driven enterprise,” said Andrew Ryan, professor of health services, policy and practice and director of CAHPR. Firms look “to make large margins and then sell again in a short time period.”
The report found that PE firms have invested around $750 billion from 2010 to 2020 through a “platform and add-on” strategy, where the firms acquire a large practice and expand by purchasing smaller medical facilities. The price PE firms pay for small hospitals is often below the national threshold for mandatory transaction reporting, allowing firms to complete large scale purchases outside traditional antitrust oversight.
Megha Reddy, project manager at SPH, emphasized the importance of ownership transparency and systematic disclosures of healthcare PE deals. This transparency can benefit patient autonomy by informing the public as they compare prices at various institutions, she explained.
With limitations in the availability of transaction reports, current numbers may have climbed even higher than indicated.
“The limitations go to show how hard it is to construct a tool or to really understand how these firms are engaged in our healthcare systems,” said Nathan Hostert MPA’25, the director for state policy at CAHPR. He said states without specific disclosure laws have “no way” of understanding PE activity in their healthcare markets.
In an email to The Herald, the tracker’s lead researcher Yashaswini Singh — an assistant professor of health services, policy and practice at SPH — wrote that her work suggests PE is attracted to regions with large numbers of specialty physicians who practice independently and would be willing to join a PE-backed practice.
“Our previous research has also found that state regulatory environment can influence PE investment patterns. For example, within cardiology, most of the states with PE entry in recent years are those with less stringent certificate of need regulations,” wrote Singh.
The tool comes amid a wave of state legislation to increase transparency around PE involvement in healthcare.
In April, Maine passed LD 2201, which requires PE firms to file for transaction review and approval at least 180 days prior to acquiring a healthcare entity.
In January, Rhode Island Attorney General Peter Neronha’s office established 110-RICR-30-00-5, a pre-merger notification rule that parties involved in “a material change to the business or corporate structure of a medical-practice group” must notify the Attorney General at least 60 days in advance of implementing the change.
The tracker aims to provide policymakers with a tool as they consider the “growing influence of private equity in healthcare,” Hostert added.
“As we’ve been circulating this (tracker) with our state partners across the country, we’ve been blown away by the response,” he added. The team hopes to continue their research to “better drive these policy conversations.”