For a June 21 article in the Tampa Bay Business Journal, Erin Aebel and Kathleen Bickelhaupt provided perspective on the busy market for private equity investment in health care.
“This is the busiest we’ve been in three or four years,” Aebel said. “We’ve always been busy in the health care industry, despite what’s going on in the broader market, and that’s because everybody needs health care. “Maybe bigger deals don’t happen as often during certain time periods, but health care is always a need.
“There is a lot of opportunity out there,” Bickelhaupt added. “A lot of small practices, especially in the Tampa Bay area, have been attractive investment opportunities for private equity groups.” She also noted that a key driver behind private equity health care deals is a desire for physicians to step back from administrative duties and focus on patient care. Private equity buyers bring additional resources, oversight and expertise to the table, giving smaller practices opportunities for new tech investments and expansions.
As one of the more highly regulated industry sectors, Aebel addressed compliance issues when outside investors get involved. Unlike many other states that prohibit corporate control in health care, unlicensed individuals can own medical businesses in Florida, she said. However, private equity health care dealmaking has attracted the attention of federal government enforcement agencies due to the hot market. “Antitrust concerns are always present in health care on any type of consolidation, whether it’s a hospital or a private equity investor buying up specialists in a particular area,” Aebel said.
Aebel also discussed the arguments that providing patient care and cutting cuts to maximize profits are contrary to one another, saying “it’s just a matter of whether you take the long view or short view.” She said that private capital allows physicians to shift away from administrative tasks, which is a good thing for patients.
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