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The effect of private equity buyouts on targets: Evidence from the long-term care clinics

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  • Jang, Donghyeok
  • Sun, Xunhong
  • Xiao, Yi
  • Zhang, Jian
  • Zhang, Yinge (Jack)
  • Zhu, Xinyu

Abstract

This paper investigates the effect of private equity buyouts in the long-term care facilities. Using the comprehensive data from Office of Statewide Health Planning and Development in U.S., we show the outcome of private-equity buyouts is considerable when it comes to the profitability of target facilities. In terms of employment, PE-backed long-term care clinics increase the number of employees relative to non pe-backed facilities located in the same city. Studying the buyouts effect on nearing non PE-backed long-term care clinics, we find, surprisingly, there is no statistical evidence that the PE-backed clinics hurt operations of neighboring non PE-backed facilities. Analyzing both of the financial and operational data together, we suggest the PE-backed facilities become more profitable, taking and discharging more short-term patients.

Suggested Citation

  • Jang, Donghyeok & Sun, Xunhong & Xiao, Yi & Zhang, Jian & Zhang, Yinge (Jack) & Zhu, Xinyu, 2026. "The effect of private equity buyouts on targets: Evidence from the long-term care clinics," Economic Analysis and Policy, Elsevier, vol. 91(C), pages 275-291.
    • Handle: RePEc:eee:ecanpo:v:91:y:2026:i:c:p:275-291
    DOI: 10.1016/j.eap.2026.03.012
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