By Dr. Henry Annan

This paper was produced with the support of the CDM board and staff.

POSITION: Canadian Doctors for Medicare (CDM) advances high-quality, equitable, and sustainable health system reforms built on the best available evidence. As such, CDM opposes the delivery of medically necessary, publicly funded care in health care facilities owned by private equity investment firms.

Background

Policy experts, legal scholars, and governments globally are sounding alarms about the surge in private equity (PE) investment in health care systems.^1,2,3  “Private equity investment firms are investment management companies that buy other businesses with the intent of increasing the value of these assets and maximizing profits for their investors.”⁴ Unlike publicly traded companies, privately held companies have greater privacy over their data and they aren’t required to abide by the same transparency rules about disclosing information to the public. “This difference does not suggest malfeasance on the part of privately held companies, but rather that they are simply less transparent to the public.”⁴

Around the world, private equity firms increasingly own the health-care companies upon which we rely.

In Canada, PE activity in the health care sector is growing. For example, a network of 53 for-profit surgical centres across 6 Canadian provinces is owned by a single PE firm.⁵  Evidence shows that the scope of PE investment in Canadian health care is broad and includes medical practices, dental clinics, community health providers, and long-term care facilities.⁶

In Australia, there has been a nearly 600% increase in PE acquisitions of medical practices between 2008 and 2022.⁷ PE investments have found firm footing in the telemedicine industry in Ireland.⁸ In the United States, the total estimated annual values of PE investment in health care stood at $115 billion in 2024—the second-highest level on record. ⁹  This investment was driven by North American transactions, which represented 65% of global value.

Some unique characteristics and behaviours of PE firms warrant consideration of how they might influence clinician behaviour and patient health outcomes.¹⁰

1. PE firms may adopt a “buy to sell” rather than a “buy to keep” business model.¹¹ To maximize profits, they may sell acquisitions relatively soon after assuming ownership (usually within 3-8 years), potentially destabilizing health care services.
2. PE firms tend to borrow money to finance the purchase of health care facilities. When using this process, known as leveraged buyout, to finance purchases, the acquired health care facilities are used as collateral, aiming to target the company’s cash flow to pay down debt and generate high returns for investors. This introduces risk of bankruptcy for the acquired asset.
3. The activities of PE investment firms are less transparent to the public compared to other for-profit companies as the PE industry enjoys less regulatory oversight compared to publicly owned corporations.

Private equity investment in health care puts patients at risk

There is growing evidence that PE investment in the health care sector may be harmful to patients. PE ownership of health care practices in some jurisdictions is associated with increased costs to patients and decreased quality of care.^12,13,14 In the United States, where much of the research on this issue is conducted, PE ownership has led to worse self-reported patient experiences, a decrease in provider staffing ratios in acquired hospitals, higher costs to patients, changing hospital services to those that are more profitable, and an increase in adverse events related to health care.^{15,16,17,18,19}

In Turkey, PE investment has been linked to an increase in health tourism and widening inequities in access to care.²⁰ In Sweden and England, PE ownership of residential care homes led to worse performance on a variety of health care quality metrics compared to other kinds of residential care home ownership.^{21,22, 23} German physicians working in PE acquired hospitals have expressed concern about how an emphasis on profits compromised quality of care and physician autonomy.²⁴ The bankruptcy of the private equity company, Co-Med, in the Netherlands, disrupted primary care services for 50,000 patients and renewed calls for greater government oversight.²⁵

Conclusion

Evidence demonstrates that the entry of PE investment firms into health care systems is likely to worsen patient outcomes and increase costs. Though some have called for continued PE investment in health care with better regulatory oversight ,^10,26,27,28  there is insufficient evidence to suggest that more regulation will mitigate their potentially harmful effects on care. Instead, governments and policymakers should use regulatory instruments to curb the creep of PE activity in the Canadian health care system. To improve access to care, a greater focus should be placed on strengthening the fundamentals of Medicare, including investing in team-based primary care,²⁹ expanding pharmacare and dental care,^30,31 and scaling/spreading similar ‘Better Medicare’ initiatives.

References 

1. Brownstein M. Private equity’s appetite for hospitals may put patients at risk [Internet]. Harvard T.H. Chan School of Public Health; 2024 Dec 16 [cited 2025 Mar 1]. Available from: https://hsph.harvard.edu/news/private-equitys-appetite-for-hospitals-may-put-patients-at-risk/
2. Khan LM. Remarks by chair Lina M. Khan [Internet]. United States of America Federal Trade Commission; 2024 Mar 5 [cited 2025 Mar 1]. Available from: https://www.ftc.gov/system/files/ftc_gov/pdf/2024.03.05-chair-khan-remarks-at-the-private-capital-public-impact-workshop-on-private-equity-in-healthcare.pdf
3. Grassley C. Private equity in health care shown to harm patients, degrade care and drive hospital closures [Internet]. Chuck Grassley. 2025 Jan 7 [cited 2025 Mar 1]. Available from: https://www.grassley.senate.gov/news/news-releases/private-equity-in-health-care-shown-to-harm-patients-degrade-care-and-drive-hospital-closures
4. Raza D, Palmer KS. Private equity and health care: Should Canadians be concerned? [Internet]. Healthy Debate; 2024 Jul 23 [cited 2025 Mar 1]. Available from: https://healthydebate.ca/2024/07/topic/private-equity-health-care/
5. Clearpoint Health Further Expands Its National Footprint [Internet]. CNW Group Ltd; 2023 Jan 5 [cited 2025 Feb 12]. Available from: https://www.newswire.ca/news-releases/clearpoint-health-further-expands-its-national-footprint-877021088.html.
6. Feldman M, Kenney M. Learning from the United States’ experience: Private equity and financing healthcare in Canada. In Healthcare Management Forum 2024 Nov (Vol. 37, No. 6, pp. 440-444). Sage CA: Los Angeles, CA: SAGE Publications.
7. Berquist VL. Private equity investment in health care delivery, Australia, 2008–2022. Medical Journal of Australia. 2024 Apr 15;220(7):368-71.
8. Mercille J. Private equity involvement in primary care: the case of Ireland. Health Economics, Policy and Law. 2024:1-7.
9. Bain & Company. Spurred by megadeals, global healthcare private equity deal value soared to $115 billion in 2024, the second-highest total on record [Internet]. PR Newswire; 2025 Jan 9 [cited 2025 Mar 1]. Available from: https://www.prnewswire.com/news-releases/spurred-by-megadeals-global-healthcare-private-equity-deal-value-soared-to-115-billion-in-2024-the-second-highest-total-on-record-302346240.html#:~:text=Spurred%20by%20megadeals%2C%20global%20healthcare,second%2Dhighest%20total%20on%20record
10. Cai C, Song Z. A policy framework for the growing influence of private equity in health care delivery. JAMA. 2023 May 9;329(18):1545-6.
11. Singh Y, Reddy M, Zhu JM. Life cycle of private equity investments in physician practices: an overview of private equity exits. Health Affairs Scholar. 2024 Apr;2(4):qxae047.
12. Karamardian M, Jagtiani E, Chawla A, Nembhard IM. An update on impacts of private equity ownership in health care: extending a systematic review. HMPI: Health Management, Policy & Innovation. 2024 Jun 26(June 2024: Private Equity Investments in Healthcare Special Issue, Volume 9, Issue 2).
13. Ma LW, Buckman C, Shah SA, Schulman K. Healthcare private equity: a review of key case studies and recommendations for effective, equitable private investment in healthcare. HMPI: Health Management, Policy & Innovation. 2024 Jun 26(June 2024: Private Equity Investments in Healthcare Special Issue, Volume 9, Issue 2).
14. Borsa A, Bejarano G, Ellen M, Bruch JD. Evaluating trends in private equity ownership and impacts on health outcomes, costs, and quality: systematic review. bmj. 2023 Jul 19;382.
15. Bhatla A, Bartlett VL, Liu M, Zheng Z, Wadhera RK. Changes in patient care experience after private equity acquisition of US hospitals. JAMA. 2025.
16. Offodile II AC, Cerullo M, Bindal M, Rauh-Hain JA, Ho V. Private equity investments in health care: an overview of hospital and health system leveraged buyouts, 2003–17. Health Affairs. 2021 May 1;40(5):719-26.
17. Cerullo M, Yang KK, Roberts J, McDevitt RC, Offodile AC. Private Equity Acquisition And Responsiveness To Service-Line Profitability At Short-Term Acute Care Hospitals: Study examines private equity acquisition at short-term acute care hospitals. Health Affairs. 2021 Nov 1;40(11):1697-705.
18. Kannan S, Bruch JD, Song Z. Changes in hospital adverse events and patient outcomes associated with private equity acquisition. JAMA. 2023 Dec 26;330(24):2365-75.
19. Gupta A, Howell ST, Yannelis C, Gupta A. Does private equity investment in healthcare benefit patients? Evidence from nursing homes. Evidence from Nursing Homes (February 13, 2021). University of Chicago, Becker Friedman Institute for Economics Working Paper. 2021 Feb 13(2021-20).
20. Vural IE. Financialisation in health care: An analysis of private equity fund investments in Turkey. Social Science & Medicine. 2017 Aug 1;187:276-86.
21. Broms R, Dahlström C, Nistotskaya M. Provider ownership and indicators of service quality: Evidence from Swedish residential care homes. Journal of Public Administration Research and Theory. 2024 Jan 1;34(1):150-63.
22. Winblad U, Blomqvist P, Karlsson A. Do public nursing home care providers deliver higher quality than private providers? Evidence from Sweden. BMC Health Services Research. 2017 Dec;17:1-2.
23. Patwardhan S, Sutton M, Morciano M. Effects of chain ownership and private equity financing on quality in the English care home sector: retrospective observational study. Age and Ageing. 2022 Dec;51(12):afac222.
24. Nolte TN, Miedaner F, Sülz S. Physicians’ perspectives regarding private equity transactions in outpatient health care—a scoping review and qualitative analysis. International Journal of Environmental Research and Public Health. 2022 Nov 22;19(23):15480.
25. Kroneman M, De Jong J, Beerman B. Challenges in healthcare access and quality are underscored as a result of the bankruptcy of a for-profit organization [Internet]. European Observatory on Health Systems and Policies; 2025 Feb 3 [cited: 2025 March 12].
26. Brown EF, Adler L, Duffy E, Ginsburg PB, Hall M, Valdez S. Private Equity Investment As A Divining Rod For Market Failure: Policy Responses To Harmful Physician Practice Acquisitions.
27. Estache A, Litaj A. Is Private Equity Good for Health?: Regulation and Competition Policy Lessons from a Survey of the Evidence. ECARES; 2023 Jan.
28. Cutler DM, Song Z. The New Role of Private Investment in Health Care Delivery. In JAMA health forum 2024 Feb 2 (Vol. 5, No. 2, pp. e240164-e240164). American Medical Association.
29. Arnup K, Boan J, McCracken R, Raza D, Wasko K. Providing high quality team-based primary care is essential to achieving better Medicare [Internet]. Canadian Doctors for Medicare; 2023 May 4 [cited 2025 Mar 1]. Available from: https://www.canadiandoctorsformedicare.ca/primary_care
30. Sheikh H, Kumar T. Denticare in Canada: An unfinished piece of Medicare [Internet]. Canadian Doctors for Medicare; 2021 Jul 13 [cited 2025 Mar 1]. Available from: https://www.canadiandoctorsformedicare.ca/denticare
31. Philpott J, Raza D. National Pharmacare—the time is now [Internet]. Maclean’s; 2019 Nov 27 [cited 2025 Mar 1]. Available from: https://macleans.ca/opinion/national-pharmacare-the-time-is-now/