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Private equity and healthcare firm behavior: Evidence from ambulatory surgery centers

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  • Lin, Haizhen
  • Munnich, Elizabeth L.
  • Richards, Michael R.
  • Whaley, Christopher M.
  • Zhao, Xiaoxi

Abstract

Healthcare firms regularly seek outside capital; yet, we have an incomplete understanding of external investor influence on provider behavior. We investigate the effects of private equity investment, divestment, and an initial public offering (IPO) on ambulatory surgery centers (ASCs). Throughput is unchanged while charges grow by up to 50% for the same service mix. Affected ASCs witness declines in privately insured cases and rely more on Medicare business. Private equity increases physician ASC ownership stakes, and both simultaneously divest when the ASC is sold. Our findings appear more consistent with private equity influencing the financing of ASCs, rather than treatment approaches.

Suggested Citation

  • Lin, Haizhen & Munnich, Elizabeth L. & Richards, Michael R. & Whaley, Christopher M. & Zhao, Xiaoxi, 2023. "Private equity and healthcare firm behavior: Evidence from ambulatory surgery centers," Journal of Health Economics, Elsevier, vol. 91(C).
    • Handle: RePEc:eee:jhecon:v:91:y:2023:i:c:s0167629623000784
    DOI: 10.1016/j.jhealeco.2023.102801
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    References listed on IDEAS

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    1. Richards, Michael R. & Whaley, Christopher M., 2024. "Hospital behavior over the private equity life cycle," Journal of Health Economics, Elsevier, vol. 97(C).
    2. Unruh, Lynn & Rice, Thomas, 2025. "Private equity expansion and impacts in united states healthcare," Health Policy, Elsevier, vol. 155(C).

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