Joanne Silberner discusses the increasing influence of private equity in the U.S. healthcare system. In his 2022 state of the union address, President Joe Biden highlighted the surge of private financing into nursing homes, which has led to compromised care quality and rising costs. Private equity refers to funds collected from high-level investors to purchase companies, enhance their profitability, and eventually sell them for a substantial profit.
As of 2021, private equity firms owned 11% of nursing homes. Their influence isn’t limited to nursing homes; they have also acquired physicians’ practices, hospitals, clinics, and even veterinary clinics. Between 2010 and 2019, private equity firms invested $750 billion in healthcare. Concerns are growing about the impact of such investments on the cost, quality, and delivery of care, especially given the capitalist nature of the U.S. health system.