Key Points:
- The Federal Trade Commission (FTC), Department of Justice (DOJ), and Health and Human Services (HHS) launched an investigation into the operations of private equity in healthcare, following Senate inquiries into legislative actions to address concerns about affordability, competition, and accountability.
- The PE business model involves acquiring assets, replacing management, reducing operating costs, and selling at a profit within 5-7 years, often using debt financing. Critics argue this approach compromises patient safety and increases costs.
- Private equity has significant influence in public policy, with well-funded lobbying activities at both federal and state levels. PE investments in healthcare are significant and increasing, with a focus on technology-enabled services and AI-based solutions.