Private equity companies—big businesses that buy up, merge, and sell off smaller ones—have long been sinking their profit-seeking teeth into the medical market. But a new study finds a previously overlooked area in which the male-dominated industry is rapidly expanding: women’s health care.
In a research letter published by the Journal of American Medical Association (JAMA) Monday, scholars from Harvard and Columbia found a “substantial increase” in the number of women’s health providers affiliated with private equity companies since 2010. And the trend seems to be growing: Of the 24 women’s health companies that gained private equity affiliation between 2010 and 2019, the researchers wrote, 17 of those happened between 2017 and 2019.
Even this estimate is likely a dramatic undercount, according to co-author Joseph Bruch, a Ph.D. student in Population Health Sciences at Harvard University and member of the university's GenderSci Lab.
“I don't think you can use our numbers and say this is the totality of private equity involvement [in women’s health care],” he told The Daily Beast, noting that the study focused only on companies that specialize in OB-GYN and fertility services that were purchased in the last 10 years.
“I think it’s fair to say that even though we documented a pretty profound number, it’s much lower than the total offices and providers that have private equity affiliations,” he said.
It’s unclear what exactly this trend means. As the researchers themselves note, “despite the growth and geographic breadth of private equity involvement in health care… relatively little empirical research exists, especially in women’s health.” But the expansion of private equity in the health-care sector overall has caused concern among physicians and researchers over how these companies balance patient welfare and the push for profit.
The involvement of private equity companies in health care has surged in the last decade. According to another Harvard study, the number of health-care deals increased 48 percent between 2010 to 2017. A Bloomberg Law analysis found that 317 health-care deals were announced or closed in the first quarter of 2019 alone, priming it to be a “record-setting year.” The analysis projected 1,200 deals by the end of the year, compared to 1,059 in 2018.
Generally, these deals involve private equity companies buying hospitals or practices and merging them with other companies, in combination with other cost-saving measures, in order to sell them at a profit. The deals can initially seem good to clinicians, who get big buyouts and are freed from having to handle business administration. But the push to make profits can also reduce the quality of care: Physicians at these companies have reported switching to lower-quality supplies, letting less-qualified providers see patients, and convincing patients to get more—and more expensive—procedures.
Just as in other medical fields, private equity can have positive impacts on the women’s health space. The recent interest in women’s health care as a lucrative market has led to the development of new drugs, products, and services. (Though the creation of some of these products, colloquially known as “femtech,” have sparked privacy concerns.) One private company that provides outsourced OB-GYN departments claims that the number of deaths or permanent injuries to mother and child decreased by 30 percent at Ascension hospitals when the health-care system brought them in.
The downsides of these deals are less studied. The authors of the research paper suggest further examining the relationship between economic incentives and quality of care, as well as access to reproductive health services—especially among disadvantaged populations. (Their research shows most private-equity–affiliated OB GYN offices were located in urban locations, with higher-than average yearly incomes.)
And as Bruch noted, this particular trend “follows larger trends of women’s bodies being commodified.”
“This is an industry largely dominated by men that will effectively have larger control on women’s health care,” he said. “Women are already seeing limits to their reproductive access and it’s an important time to be thinking about whether financial investors may or may not impede access and equity.”