HIMSSCast: Is private equity the bad guy in healthcare?

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There's been lots of scrutiny around private equity investment in healthcare.

The argument against private equity is that it is concerned with short-term profits, which fits neither the nature nor culture of healthcare.

However, healthcare needs private equity investment if it wants to innovate, according to Vin Phan, senior managing director and Global Transaction Advisory practice leader at Ankura.

Private equity is a big part of the economy and will continue to be a growth driver for healthcare, Phan said.

"I think there are continued advancements in technology that require investments by private equity," Phan said. "I think this is going to continue into the foreseeable future."

For more, please listen to Phan's conversation with Susan Morse, executive director of Healthcare Finance News.

Talking Points:

• A fragmented healthcare market presents opportunities for M&A consolidation and private equity.
• Investments includes physician practices and urgent care clinics.
• Private equity accounts for an estimated 4% of total revenue in healthcare.
• Investment has attracted the attention of regulatory bodies such as the Federal Trade Commission.
• Investors need to show how they can improve patient care and access.
• Investors need to focus on long-term value creation.
• PE investors need to integrate antitrust considerations into acquisition strategies.
• They need to prepare for increased reporting and ensure long term goals are aligned with the practices they're investing in.

More About this Episode:

Lawmakers' bill seeks to regulate private equity in healthcare

Healthcare private equity deals hit $90B in 2022

PE investor sees big opportunities in healthcare growth areas

HIMSSCast: Investors are helping to drive climate change initiatives

Steward CEO steps down, sues Senate HELP Committee

Email the writer: SMorse@himss.org