https://www.amjmed.com/article/S0002-9343(23)00589-2/fulltext?
Why would PE firms invest in medical and dental practices, hospitals, nursing homes, hospices, and other health care entities? These firms typically seek to sell their acquired businesses in 3-5 years, aiming for at least a 50% profit. To do this, they must show sufficient revenue and profit growth to justify a higher sales price or increase the profitability of an entity they own to justify maintaining ownership. To do this, they must increase revenues and decrease operating costs. To achieve higher revenues, they will raise prices, increase the “productivity” of practitioners (ie, ask the physicians and others to see more patients), or seek a more lucrative mix of procedures. To lower costs they will seek lower-cost supplies; in a best case through forcing lower prices on currently used products, in a worst case by substituting inferior products. More often, because the major “cost” in a medical setting is the salaries of personnel, they will seek to substitute lower-paid staff: LPNs for RNs, minimally trained “medical assistants” for nurses.
