Health Care & Hospital Law
Jul. 8, 2024
The financialization of health: Ethical concerns in private equity healthcare acquisitions
Private equity acquisitions of healthcare businesses have been shown to negatively impact quality of care, physician autonomy, and patient costs. New laws and ethical guidelines are being proposed to safeguard physician autonomy and patient care during PE takeovers.
Private equity (PE) refers to the business of acquiring businesses either through purchase equity (cash) or through debt/lines of credit, and then grouping those businesses together in order to raise their value. This arrangement improves the value of the businesses because together they are projected to have higher Earnings Before Interest, Tax, Depreciation & Amortization (EBITDA) than standing alone. Additionally, collateral is more diversified this way. These...
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