By the time most people notice private equity in healthcare, they’re already inside it.
A loved one moves into assisted living. A nursing home changes vendors. A familiar practice suddenly has new “partners.” The language is always reassuring: more resources, more specialists, more coverage, more quality.
And on paper, it can look like modern medicine at its best.
But I’ve spent enough time in real facilities—where the patients are frail, complicated, and vulnerable—to tell you this: when corporate ownership arrives, the incentives change first. The culture follows. And the patient often becomes the last person anyone is actually listening to.
In this episode of the Return to Healing Podcast, Andy and I talk about what we’ve seen up close: how these deals are pitched, what tends to change after the takeover, and why “more thorough” care can quietly become more harmful care—especially in long-term care settings.
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Download the episode transcript (PDF): Private Equity in Healthcare
What private equity is really buying
Private equity isn’t buying healthcare because it wants to discover the secrets of wellness.
It buys healthcare because some parts of medicine are exceptionally efficient at generating revenue—especially when the system pays more for volume than for outcomes that matter.
That’s why certain targets show up again and again:
- Primary care practices, because they control “covered lives” and downstream referrals
- High-revenue services, because procedures scale
- Facility-based populations (nursing homes, assisted living), because patients are concentrated and easier to move through “pathways”
The business model isn’t subtle once you see it: utilization is the product.
The pitch is always “more care,” and it sounds persuasive
When corporate groups enter a facility, they rarely lead with “we’re here to increase utilization.”
They lead with promises:
- “We’ll bring in specialists.”
- “We’ll build programs.”
- “We’ll reduce risk.”
- “We’ll improve quality.”
- “We’ll add analytics and oversight.”
It sounds like responsible medicine.
But in long-term care, more specialists often means more interventions, and more interventions in frail patients often means more side effects, more confusion, more falls, and more trips to the hospital.
Sometimes the most healing thing we can do in these settings is to slow down, not speed up.
A real example: dialysis “packages” and the illusion of a win-win
One example we discussed in the episode is the way certain nephrology groups pitch nursing facilities. They offer what looks like a premium package: dialysis access, specialty coverage, administrative perks—sometimes even removing costs the facility used to carry. It sounds like a win. But there’s usually a financial center to the pitch:
Dialysis is lucrative. And if you can increase dialysis volume, the model pays.
That’s how a facility can quietly become a dialysis engine. Patients who were stable—older adults whose labs are abnormal partly because aging changes physiology—get told they’re in danger. Families get frightened. The pathway builds momentum. The system profits. And the approach that doesn’t profit—care that prioritizes function, comfort, fewer medications, and fewer unnecessary interventions—gets pushed aside.
Dashboards, “quality,” and the theatre of precision
Corporate healthcare loves dashboards. They arrive with charts, graphs, and claims of improved outcomes. But I’ve also watched “quality” metrics become a kind of theatre—numbers used to sell reassurance while the underlying approach raises risk. We don’t need advanced analytics to understand this:
Layer more medications onto frail patients, and you raise fall risk. Add sedatives, add blood pressure medication changes, add unnecessary procedures—and you’ll see dizziness, confusion, and falls. Numbers can help clarify reality. But numbers can also be used to sell a story—especially when the story ends with more billing.
Utilization doesn’t feel like utilization when fear is the fuel
In everyday practice, increased utilization rarely presents as greed. It presents as “being safe.”
- “Let’s do the test just to be sure.”
- “Let’s refer you, just to rule something out.”
- “Let’s add this medication, just in case.”
And that’s where private equity in healthcare merges with something deeper:
Fear sells, and medicine is not immune. Fear turns restraint into negligence; fear turns watchful waiting into “doing nothing;” fear makes “more” feel like responsibility.
But a system that profits from fear will always find a reason to keep people worried.
Medicare Advantage, “covered lives,” and who gets pulled into the system
In episode 46 of the A Return to Healing Podcast, we also touched on Medicare Advantage—because it’s a major driver of consolidation and “covered lives” strategy.
When groups chase profitable “covered lives,” they may selectively recruit patients whose insurance structures are financially attractive, while the patients with fewer options—straight Medicaid, the truly underserved—continue to get squeezed out.
That’s not a side effect. It becomes part of the design.
What this does to clinicians
There’s another cost here that rarely gets measured: moral injury. When you’re asked to move patients through pathways that don’t fit them—when you’re pressured to do more because the system pays you to do more—you don’t just burn out.
You start to feel like you’re participating in something that violates the reason you went into medicine in the first place. And good clinicians either leave or they stay and become numb. Neither outcome is good for patients.
What we want instead
We’re not anti-business, and we’re not anti-technology. We’re pro-patient, and we want a system that rewards:
- continuity and primary care
- shared decision-making
- fewer unnecessary interventions
- real outcomes (function, comfort, quality of life)
- humility about uncertainty
Private equity in healthcare often pulls the system in the opposite direction: toward more utilization, more billing, more “pathways,” and more anxiety—even when those things don’t improve health.
What you can do as a patient or caregiver
If you or a loved one is in a facility, or you suddenly find yourself offered a cascade of tests, referrals, and procedures, pause and ask:
- What problem are we solving, and what outcome matters most here?
- How will we know this helped—not just that it was done?
- What happens if we wait?
- What are the harms or tradeoffs—especially for frail patients?
- Who benefits financially if we choose this pathway?
Those aren’t cynical questions. They’re adult questions.
Let's Return to Healing
Corporate takeovers don’t arrive announcing themselves as “extraction.” They arrive as “more services,” “better quality,” and “more thorough care.” But in a sick-care system, more is not automatically better—and in long-term care, more can be actively dangerous.
If you want the deeper version of this argument—how incentives warp decision-making, and what patient-centered care looks like in a system built for volume—our book A Return to Healing lays out the whole picture.
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Medical review note
Written by Dr. Alan Roth. Medically reviewed by Dr. Andy Lazris.
