Private equity investment in healthcare has sparked its fair share of headlines—and controversy. Critics argue that PE firms are profit-driven disruptors, more concerned with investor returns than patient outcomes. But that narrative is incomplete. When thoughtfully structured, PE-backed partnerships can strengthen the financial backbone of healthcare—and in doing so, protect patient access, care quality, and reimbursement rates.
The Federal Trade Commission’s 2023 lawsuit against Welsh, Carson, Anderson & Stowe (WCAS) and U.S. Anesthesia Partners (USAP) became a leading example for this debate. The FTC alleged the firms conspired to consolidate anesthesiology practices in Texas, drive up prices, and increase profits. A federal court later dismissed WCAS from the case, and a settlement was reached limiting its involvement in the anesthesia market. But the case against USAP continues. The FTC’s actions were part of a broader push to scrutinize private equity’s role in healthcare—a move that’s raised serious questions about what consolidation actually means for patients and providers.
Here’s the reality: small physician practices have been at the mercy of insurance giants for years. Without collective bargaining power, independent providers are routinely forced to accept reimbursement rates that fall below their cost of care. In contrast, when PE firms consolidate practices, they create negotiating leverage—allowing doctors to push back, stabilize pricing, and ensure continued access to care. It’s the first time in decades providers in certain specialties have had the scale to say, “If you want access to our doctors, here’s what you pay.”
This isn’t about dollars and cents. It’s about making sure providers can stay afloat in a system rife with financial instability, administrative inefficiencies, and shrinking margins. In 2022, more than half of U.S. hospitals ended the year in the red. By 2024, about 40% were still operating at a loss. That kind of erosion doesn’t just impact the bottom line—it jeopardizes patient access, continuity of care, and the viability of independent practices.
What PE Investment in Healthcare Really Looks Like
Private equity doesn’t automatically mean exploitation. In many cases, it’s what keeps the lights on. PE firms bring capital, strategic expertise, and operational efficiencies that many small or mid-sized providers could never access on their own. They help consolidate back-office functions like accounting and HR, implement modern billing infrastructures, and unlock the scale needed to negotiate fairly with payers.
Revenue cycle management (RCM) is a prime example. It’s one of the most misunderstood yet vital functions in healthcare, covering everything from verifying insurance to submitting claims and collecting payment. Done well, RCM ensures providers get paid—on time and accurately—for the care they deliver.
Firms like Gain, along with other RCM providers that may have private capital backing, bring advanced billing tech, automated claims systems, and strategic reimbursement support to providers who would otherwise struggle to manage these functions. That reduces administrative burden, improves cash flow, and gives providers more time for what matters—patient care.
Independent RCM firms do exist, but most lack the capital to expand reach or innovate at speed. These are J-curve investments—high upfront costs with long-term value. That’s where PE steps in. Without that backing, scaling this kind of impact becomes significantly harder, if not impossible.
Same Fear, Different Context: Drawing Parallels to SB 68 and SB 69
The fear of private equity in healthcare mirrors the anxiety that’s driven recent legislation like Georgia Senate Bills 68 and 69—efforts that conflate capital involvement with ethical compromise. SB 69 targets consumer legal funding, while its sister bill, SB 68, introduces constraints specific to healthcare, disproportionately favoring insurers and third-party liability carriers.
In both sectors, lawmakers have attempted to legislate against “outsiders” without fully understanding how investment capital actually functions. But private equity doesn’t dictate patient decisions any more than a consumer legal funder tells an attorney how to litigate. It enables access—whether to care, justice, or operational sustainability.
The more providers that can afford to see patients, the more services are available, and the fewer people fall through the cracks. If we regulate based on fear, we don’t build stronger systems—we create scarcity. And that burden ultimately falls back on government programs and emergency rooms already stretched to the brink.
Regulation Is Welcome—Oversimplification Is Not
Scrutiny isn’t the enemy of progress. Oversimplification is.
Yes, patient protections matter. But so do financial tools that allow providers to remain solvent. The idea that all PE involvement is inherently predatory ignores the nuances that distinguish exploitative models from partnerships rooted in purpose and aligned performance.
When structured responsibly, PE investments help unlock better outcomes—for patients, providers, and the healthcare service businesses that support them. That’s not something to fear. It’s something we need more of.
In Closing
The claim that private equity should stay out of healthcare makes for a catchy headline—but it doesn’t hold up in practice. If we want providers to remain independent, financially stable, and focused on care delivery, they need modern financial tools and partners who understand what’s at stake.
I’ve been involved in nearly two dozen physician practice group acquisitions over the years. In every single one, I’ve heard the same message from private equity: “You are the chief medical officer. We’re here to help you—not interfere with how you practice medicine.” I’ve never seen a PE firm attempt to dictate care. What I have seen is operational expertise, investment in infrastructure, and a genuine desire to let doctors focus on healing people—not on HR, accounting, or endless insurance appeals.
The Hippocratic Oath wasn’t meant to be a business plan. PE-backed partnerships, when built the right way, give providers a way to practice medicine with the support they need—and the autonomy they deserve.
For more on this topic, please consider checking out my video series “This is Healthcare in America,” which examines various facets of the U.S. healthcare system and discusses potential improvements.
