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Scott Becker - 14 Thoughts on the Healthcare Private Equity Environment 4-27-26 · Becker’s Healthcare Podcast

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  This is Scott Becker with the Becker's healthcare
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  podcast.
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  Today's discussion is 14 thoughts on the healthcare
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  private equity environment.
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  So first,
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  overall,
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  a better deal market in 2025
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  and 2024
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  and '23.
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  A good deal of investments, both really large
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  deals and some bolt on deals.
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  A bit of a slowness in exits by
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  midsize and platform companies.
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  Not a boom year 2025,
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  but better than '24 and '23.
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  Second, a ton of investments in growth in
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  companies that sell into health care but that
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  are not direct providers.
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  Think revenue cycle, IT,
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  business services, staffing, and more. Some of the
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  big revenue cycle companies
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  that are private equity funded include r one
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  RCM, Ensemble Health Partners, and Nimble Solutions.
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  Third,
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  continued growth in specialty practice management,
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  particularly where there are solid margins and ancillary
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  opportunities.
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  Think orthopedics,
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  GI, dermatology,
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  cardiology,
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  specialty dental, and behavioral health in urology.
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  A lot of investment in companies that provide
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  services to payers too. In the orthopedic stat
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  area,
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  think growth stories like health care outcomes performance
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  company, HOPCO in orthopedics, and many others.
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  Fourth,
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  there's a huge struggle in low margin specialties
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  where PE adds stat, but margins are under
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  real pleasure
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  pressure. Think OBGYN, primary care. Some of the
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  boom is also off the rose in the
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  Medicare Advantage business.
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  Some companies like Dewey Healthcare, Dewey Health and
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  Care have really bucked these trends for really
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  successful private equity backed multi specialty practice.
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  Fifth,
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  PE private equity has about 800 to 900
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  hospitals collectively,
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  a couple big blow ups where low margin
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  business meets high debt.
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  The majority of PE driven hospitals performed nicely.
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  The big growth companies that blew up often
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  included hospitals
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  that were in real trouble to start with.
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  So Stewart HealthCare, sure, they made some serious
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  mistakes, but about 10 or 12 of the
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  30 hospitals they bought were basically under water
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  when they bought them.
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  LifePoint, owned by Apollo, is a really well
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  run firm.
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  Arden Health, which was p owned and is
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  now public, was also a great PE owned
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  operator.
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  Sixth, the o b three cuts may be
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  overstated.
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  The the rule the rural behavior of 50,000,000,000
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  spent is driving a lot of investors to
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  chase those funds. So o b three cuts
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  are serious. A lot of the cuts are
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  actually a reduction in increases
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  than actually cuts, but we'll see how it
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  goes in the next decade.
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  Seventh,
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  private equity is often scapegoated.
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  However,
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  reflects overall
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  12 percentage of health systems of doctors.
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  78% of health systems, 78 of doctors, seven
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  to 8%.
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  An insurance company, one insurance company employs more
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  doctors than all of private equity combined.
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  PE can relieve stress in an overwhelmed system.
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  Eighth,
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  in the venture capital area, a lot of
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  investment in artificial intelligence firms that is booming.
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  Incredible efforts to back the possible winners in
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  AI solutions. Andreessen Horowitz,
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  General Catalyst, Coastal Ventures, and others
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  really taking that race to heart.
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  A race to be the solution of choice.
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  We're watching two of the big ambient listening
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  companies, Abridge and Ambiance Health Care. It's like
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  watching two great warriors compete in hand combat
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  to employ their ambient solutions.
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  Ninth,
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  long term physician and other shortages may make
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  physician practice management growth much harder. Tenth,
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  still a great deal of growth in outpatient
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  facilities, ASCs,
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  emergency departments, urgent care, and behavioral health.
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  Also autism and other parts that are closely
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  related to behavioral health.
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  Eleventh,
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  cash flow, deep product market fit, room for
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  growth, acquisitions plus organic growth, rate management, good
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  margins, and measured reimbursement risk make something quite
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  investable.
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  13,
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  a lot of regulatory overhang in several states
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  were starting to restrict
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  PE investments in companies.
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  13,
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  we see some funds with deep conviction
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  keep trying to grow deep depth in an
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  area. Some are trying to vertically combine technology
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  and services businesses or software and services business.
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  They're not necessarily SaaS firms, but but they're
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  trying to take a cap tech company and
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  a service firm and try and vertically integrate
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  to get tougher and tougher and tighter and
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  tighter in the market. We've seen Bain and
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  some other investors have deep conviction in different
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  areas and really ride this to success. They
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  gotta have patience, they gotta have money, and
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  they gotta have conviction. They can often drive
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  it to success.
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  Last thought I'll have for you today is
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  one great acquisition, one that really works, that
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  that really is an arbitrage or great winner
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  can make up for a lot of suboptimal
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  bolt on deals. Again, this is Scott Becker
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  with the Beckers Healthcare Podcast. Thank you for
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  listening to our podcast.