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Comment & Response
August 6, 2019

Private Equity Investment in Health Care

Author Affiliations
  • 1Summit Partners, Menlo Park, California
JAMA. 2019;322(5):468. doi:10.1001/jama.2019.7844

To the Editor Although Mr Gondi and Dr Song highlighted potential pitfalls with private equity investment in the health care delivery system and pointed out that almost no outcome data exist,1 there are several reasons for optimism. First, the predictability of achieving attractive investment returns is correlated with attention to all health care constituents, including patients, clinicians, and payers. These 3 groups should be considered with every health care investment. Second, private equity firms often invest in sectors that are growing rapidly due to their positive impact. Health care investment themes such as integrated, coordinated care delivery; value-based care; consumerism; and DNA/RNA–related research are improving the industry. Third, given the knowledge and capital needed to build industry leaders, it is rare to find a large health care company that has not benefited at one time from a private equity partner. Fourth, common and substantial investment risks occur by not having strong regulatory compliance, actionable analytics, and key performance indicators that serve to decrease variability and increase quality. Private equity firms focus on these to improve the business after investment.