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Table of contents
Q3 2024
PitchBook Analyst Note: Quantifying PE Investment in Healthcare Providers
July 8, 2024
PE owns less than 4% of US healthcare providers by revenue
Private equity looms large over public debates around the US healthcare system, but it represents a smaller slice of the market than many would assume, PitchBook lead healthcare analyst Rebecca Springer explains in her latest analyst note.
The report lays out the scope of PE investment in healthcare providers to inform future discussion.
- PE-backed providers represent an estimated 3.3% of the US healthcare provider ecosystem by revenue.
- Healthcare providers have long been a part of PE portfolios, but growth in the total number of PE-backed companies has slowed over the past six years.
- Deals for hospitals and skilled nursing facilities are currently rare, and there has not been a major PE investment in a US hospital or health system since 2018.
Table of contents
| Key takeaways | 1 |
| Introduction | 2 |
| PE-backed providers represent less than 4% of the US healthcare provider ecosystem by revenue | 2 |
| PE investment in healthcare providers is neither new nor surging | 3 |
| The growth in physician employment is not primarily PE driven | 4 |
| Current PE deal activity in hospitals and skilled nursing facilities is near zero | 5 |
| The primary goals of inorganic growth (“roll-up”) strategies are multiple arbitrage and operational leverage | 6 |
| PE investors avoid out-of-network reimbursement | 8 |