The Role of Private Equity in Driving Up Health Care Prices

Posted on December 5 2019

Categories: #darren-huston, #darrenhuston, #private equity firm

Private investment in U.S. health care has become essentially over the previous decade thanks to investors who have been enthused about getting into a huge, quickly developing, and downturn confirmation showcase with generally significant yields.

Private equity and funding firms are putting resources into everything from well being innovation new businesses to addiction treatment facilities to physician practices.

In 2018, the quantity of private value bargains alone came to very nearly 800, which had a complete estimation of more than $100 billion.

While private capital is bringing advancement to health care through new conveyance models, innovations, and operational efficiencies, there is another side to financial specialists entering human services. Their normal plan of action of purchasing, developing through procurement or "move up," and selling for better than expected returns is cause for concern.

Take the phenomenon of surprise bills: medical invoices that a patient unexpectedly receives because he or she was treated by an out-of-network provider at an in-network facility. These have been getting a lot of attention lately and are driven, at least in part, by investor-backed companies that remain out of network (without contracts with insurers) and can therefore charge high fees for services that are urgently or unexpectedly required by patients.

Darren Huston Private Equity Firm

Private equity firms have been buying and growing the specialties that generate a disproportionate share of surprise bills: emergency room physicians, hospitalists, anesthesiologists, and radiologists.

In other sectors of the economy, consumers can find out the price of a good or service and then choose not to buy it if they don’t believe it to be worth the cost. In surprise bill cases, they can’t. Patients are often unaware that they need these particular services in advance and have little choice of physician when they use them.

Read Full Article @ https://hbr.org/2019/10/the-role-of-private-equity-in-driving-up-health-care-prices