In a U.S. Right to Know Healthwire article, Pamela Ferdinand examines how private equity ownership in health care prioritizes aggressive profit maximization, often at the expense of patient care. The article highlights how financial incentives can conflict with the delivery of high-quality care, contributing to higher mortality rates and raising concerns about the long-term impact of private equity’s role in the U.S. health system. Richard Scheffler told U.S. Right to Know, “The empirical studies are now overwhelming: Private equity puts profits above the well-being of patients.”
Read the full article here.
Reducing Spending And Enhancing Value In US Health Care: Reflections On The GAO Report
Federal health spending plays a central role in the nation’s long-term fiscal outlook. Medicare, Medicaid, the Children’s Health Insurance Program, and private health insurance spending are projected to increase in the coming years. These unsustainable trends—occurring without commensurate improvements in population health— create a burning need for reform: Without meaningful change, rising health care costs will increasingly strain household budgets, crowd out other federal and state priorities, and undermine the nation’s long-term fiscal stability.
Against this urgent backdrop, the United States Government Accountability Office issued its 2024 report, “Highlights of a Forum: Reducing Spending and Enhancing Value in the U.S. Health Care System”. The report summarizes the discussions of an expert forum convened in October 2024. Dr. Papanicolas and Dr. Scheffler, the director of the Petris Center, highlight below the areas the group believes are most critical for policymakers to consider and offer new insights that have gained salience given shifts in the policy landscape since the forum was conducted.
Please view the report linked here.
Texans Warned of Health Insurance Premium Rise in 2026
In a Newsweek article, Jasmine Laws, discusses how health insurance premiums are expected to increase across the country, with the possibility of certain states experiences much higher increases. While the enhanced tax credits were originally implemented by former President Joe Biden for those using ACA marketplaces are set to expire at the end of 2025 are impacting the increase in premium costs, there are also a number of other factors affecting these costs including inflation, labor costs, and high-priced drugs. Richard Scheffler, tells Newsweek, that “rises in premium costs are routine.”
Read the full article here.
The United States Government Accountability Office Discusses Reducing Spending and Enhancing Value in the U.S. Health Care System
The US Government Accountability Office (GAO) convened a diverse panel of 30 health care experts to focus on the challenges of health care spending. Richard Scheffler was a member of the panel and was involved in conversations to help identify issues associated with increased health care spending in the United States. The panel was comprised of federal government officials, academics, researchers, clinicians, and industry experts who represented a range of expertise and experiences.
To read the full highlights from the forum, please view this link.
UnitedHealthcare Is Struggling To Recover From Luigi Mangione
In an Newsweek article, Jasimine Laws, discusses how the alleged shooter, Luigi Mangione, became secondary to the public’s outrage at UnitedHealthcare itself, with social media mocking the company over high healthcare costs and denied care. The backlash has led to stock losses and legal threats. Richard Scheffler told Newsweek, “The oversize profits at a time where health care is becoming even more unaffordable is a key factor in the negative view of company.”
Read the full article here.
Invited Commentary: Unanswered Questions on Private Equity in Gastroenterology
Jane M. Zhu, MD, MPP, Division of General Internal Medicine, Oregon Health & Science University, comments on this issue of JAMA Health Forum, Arnold et al. Zhu discusses that the inclusion of a number of quality metrics in the analysis is significant to the conversation.
To view Zhu’s full commentary, please see the PDF below.
Does Private Equity Harm Competition in the Hospital Industry?
In an article published in ProMarket on May 16, 2025, Brent Fulton discusses the role of lenders in acquisitions of hospitals by private equity firms.
During the past two decades, the number of U.S. companies owned by private equity firms has increased almost sixfold–from 1,900 to 11,200–including private equity firms owning almost 500 hospitals in the U.S. today. While private equity firms have been able to extract their capital prior to some hospital-system bankruptcies, the lenders have been overlooked in these bankruptcies. The capital extraction occurred because the lenders allowed the debt to be paid as a dividend, likely because debt covenants were relaxed by lenders chasing relatively few private equity deals and because hospital market conditions changed for the worse (with lenders pricing loans assuming some default risk). Hence, lenders bore the brunt of the losses.
However, patients bear the brunt of hospital service disruptions. Moreover, taxpayers sometimes bail out these hospitals. Fulton concludes by stating whether private equity-owned hospitals are a competitive model has yet to be determined–the impact of private equity on hospital quality is mixed–but regardless of the ownership model, regulation is needed to ensure transparent financing, along with price and quality transparency, because of the social contract that hospitals have with their communities.
ProMarket is a publication of the Stigler Center at The University of Chicago Booth School of Business and is publishing a series of articles on the impact of private equity in health care. Here’s some information about ProMarket from its website. ProMarket is an academic forum focused on topics of special-interest capture, antitrust, political economy, and the future of capitalism. The vast majority of economists believe that competition is the essential ingredient that makes a market economy work. While a competitive market system ends up benefiting everyone, nobody benefits enough to spend resources to lobby for it. Business has very powerful lobbies; competitive markets do not. This is why we are ProMarket, rather than ProBusiness.
Author Interview: “When Does Private Equity Ownership of Physician Practices Violate ‘First, Do No Harm’?”
Preethi Subbiah, research assistant and program coordinator for the Nicholas C. Petris Center, joins Ethics Talk to discuss her article, coauthored with Dr Richard M. Scheffler: “When Does Private Equity Ownership of Physician Practices Violate ‘First, Do No Harm’?”
Access the podcast, the transcript, and the article.
The Curious Case of Private Equity in Health Care’s Market Failures
Richard Scheffler and Barak Richman discuss the crucial divide that lies ahead for policymakers interested in preventing the spread of PE-induced damage within the health care markets. The authors explain why the events of 2024 led to increased scrutiny led by the Biden administration and a few states pursing their own reforms.
To read the article, please click the link here.
Hospital Consolidation Across Geographic Markets with Katie Gudiksen and Brent Fulton
Andréa Caballero, Vice President of Policy at Catalyst for Payment Reform, calls Katie Gudiksen, Executive Editor at The Source on Healthcare Price and Competition, and Brent Fulton, Associate Research Professor of Health Economics at UC Berkeley and Associate Director of the Petris Center to dissect the evolving landscape of hospital consolidation. They explore horizontal, vertical, and, crucially, cross-market mergers, providing context on their prevalence and challenging conventional wisdom around market definitions. The discussion highlights how consolidation, irrespective of type, demonstrably increases prices without corresponding quality improvements – a critical concern for purchasers.
To read more about the research discussed, please click the link here. Link to the podcast.