Private equity investment in healthcare is surging at an unprecedented pace, as firms pivot away from consumer-facing sectors and double down on recession-resistant assets. From sprawling buyouts of global healthtech firms to the consolidation of small disability care providers, private capital is reshaping every tier of the healthcare industry, though not without raising ethical and regulatory concerns.
In a striking trend over the last decade, PE firms acquired more than 1,000 disability and elder care providers between 2013 and 2023. Historically operated by nonprofits and faith-based organizations, these care centers have become fertile ground for private investment due to their fragmented nature and steady demand. “The private equity model prioritizes short-term financial gains, often at the expense of staffing levels, service quality, and even basic client safety” (Vogel, 2025). The Private Equity Stakeholder Project (PESP) warns that this profit-driven approach may be undermining care quality for vulnerable populations, particularly individuals with intellectual and developmental disabilities.
The scale of these consolidations is significant. Alpine Investors’ Team Services Group now employs nearly 100,000 staff across 11 states. Similarly, Centerbridge-backed Sevita and Help at Home span nearly 40 states, employing tens of thousands. However, this expansion has come under scrutiny. Investigations cited in recent reports uncovered serious lapses in care, including understaffing, improper restraints, and fatal cases of neglect. In Illinois, Broadstep Behavioral Health homes were shut down for “significant deficiencies” in medication management and safety protocols, while a patient in Indiana died after extreme weight loss in a Help at Home facility (Broderick, 2025).
Meanwhile, on the upper end of the market, private equity firms remained active in scalable, high-return segments of healthcare. In 2024, over 1,000 PE-backed deals were tracked in the U.S., with dental care, health IT, outpatient services, and pharma services leading the charge. Firms like Latticework Capital Management topped deal counts with 27 investments, while platform companies such as MB2 Dental and Beacon Behavioral Partners aggressively expanded through add-on acquisitions.
Despite tighter regulations and high interest rates, global healthcare private equity deal value hit “$115 billion” in 2024, the second-highest year on record, showing investor resilience and demand for large-scale assets (Bugbee et al., 2025). Analysts anticipate a strong resurgence in healthcare dealmaking, supported by deep capital reserves and a strategic focus on high-growth and recession-resistant healthcare verticals.
This bifurcated trend, where innovation and technology thrive in one segment while essential caregiving services struggle under cost-cutting mandates, raises a critical question: Can private equity truly balance returns with responsibility in healthcare? Federal efforts are underway to address this imbalance. In 2024, a new rule mandated that 80% of Medicaid funds go directly to worker compensation in home- and community-based services. While some industry voices push for a repeal, others see it as a vital step toward ensuring that financial gains do not come at the expense of patient safety and dignity.
As PE firms continue to scale up their influence across the healthcare ecosystem, regulators, stakeholders, and communities will need to keep pace. Whether these investments ultimately lead to improved outcomes or deeper systemic challenges depends on how profit incentives are aligned with the core mission of care delivery.
Sources
Broderick, O. Rose. “Private Equity Ownership of Care Homes for People with Intellectual and Developmental Disabilities Is Surging.” STAT News, 18 Mar. 2025, www.statnews.com/2025/03/18/private-equity-ownership-care-homes-intellectual-developmental-disabilities/.
Bugbee, Mary, Eileen O’Grady, and Michael Fenne. Healthcare Deals 2024 in Review. Private Equity Stakeholder Project, 20 Feb. 2025, https://pestakeholder.org/reports/healthcare-deals-2024-in-review/.
Vogel, Susanna. “Private Equity Firms Are Increasingly Buying Disability Care Centers.” Healthcare Dive, 19 Mar. 2025, www.healthcaredive.com/news/private-equity-firms-buying-disability-care-centers-quality-decline/742858/.
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