Key Takeaways
- • Drew Maloney, president and CEO of the American Investment Council, argues in an opinion piece on RealClearHealth that private equity is filling major gaps in the U.S. health care system.
- • Private equity invested $15 billion in more than 250 urgent care clinics as of 2020, according to the piece, citing a report from the American Investment Council and PitchBook.
- • The piece cites a West Virginia University study finding that new MedExpress clinics were associated with fewer short-term hospital admissions, fewer inpatient days, and fewer emergency room visits.
- • Private equity-backed hospitals employ a higher ratio of doctors, nurses, and pharmacists, according to research from Indiana and Georgetown Universities cited in the article.
- • The author positions private equity as a targeted solution to health care access and innovation challenges, and dismisses it as a "convenient boogeyman."
Summary
An opinion piece published on RealClearHealth by Drew Maloney, president and CEO of the American Investment Council and former assistant secretary of the Treasury for Legislative Affairs, makes the case that private equity is a necessary partner to the U.S. health care system. The argument draws on a recent report from the American Investment Council and PitchBook, which characterizes the industry as a key source of capital and management expertise for hospital systems, outpatient clinics, pharmaceutical manufacturers, and medical device developers.
The piece highlights rural access as a central example. It notes that more than 130 rural hospitals closed nationwide between 2010 and 2021, and that 65 percent of rural areas had a shortage of primary care physicians in 2023. Private equity has invested $15 billion in more than 250 urgent care clinics as of 2020, according to the article. MedExpress, an Appalachian urgent care chain backed by private equity, expanded across rural West Virginia, where a West Virginia University study found new clinics were "associated with fewer short-term admissions to hospitals, fewer inpatient days, fewer emergency room visits, and a reduction in outpatient visits at hospitals."
On drug development, the article states that about 7,000 rare diseases exist, only 5 percent of which have an available treatment, and that bringing a new medicine to market takes 10 to 15 years and more than $2.6 billion on average. Only 12 percent of molecules entering clinical trials receive FDA approval. The author credits private equity financing with supporting treatments for conditions including leukemia, Alzheimer's, and HIV. He cites Anthos Therapeutics, whose drug abelacimab reduced the overall risk of bleeding by 67 percent compared with the current standard of care in testing, and which the FDA has said it would fast-track.
The article also argues that private equity relieves clinical workloads. It states that the average physician spent 15 hours per week on paperwork in 2023 and cites research from Johns Hopkins, Harvard Medical School, and the University of Oregon finding that private equity-backed clinicians spend more time with patients. Research from Indiana and Georgetown Universities, as cited in the piece, found that private equity-acquired hospitals employ a higher ratio of clinical staff, see wage increases, and have "better survival prospects" for patients.
The author concludes that the system's problems are complex and that targeted private equity investment can improve access and innovation. The piece is an advocacy column from an industry representative and its figures are drawn from industry-commissioned and cited studies rather than independently verified data.
The piece highlights rural access as a central example. It notes that more than 130 rural hospitals closed nationwide between 2010 and 2021, and that 65 percent of rural areas had a shortage of primary care physicians in 2023. Private equity has invested $15 billion in more than 250 urgent care clinics as of 2020, according to the article. MedExpress, an Appalachian urgent care chain backed by private equity, expanded across rural West Virginia, where a West Virginia University study found new clinics were "associated with fewer short-term admissions to hospitals, fewer inpatient days, fewer emergency room visits, and a reduction in outpatient visits at hospitals."
On drug development, the article states that about 7,000 rare diseases exist, only 5 percent of which have an available treatment, and that bringing a new medicine to market takes 10 to 15 years and more than $2.6 billion on average. Only 12 percent of molecules entering clinical trials receive FDA approval. The author credits private equity financing with supporting treatments for conditions including leukemia, Alzheimer's, and HIV. He cites Anthos Therapeutics, whose drug abelacimab reduced the overall risk of bleeding by 67 percent compared with the current standard of care in testing, and which the FDA has said it would fast-track.
The article also argues that private equity relieves clinical workloads. It states that the average physician spent 15 hours per week on paperwork in 2023 and cites research from Johns Hopkins, Harvard Medical School, and the University of Oregon finding that private equity-backed clinicians spend more time with patients. Research from Indiana and Georgetown Universities, as cited in the piece, found that private equity-acquired hospitals employ a higher ratio of clinical staff, see wage increases, and have "better survival prospects" for patients.
The author concludes that the system's problems are complex and that targeted private equity investment can improve access and innovation. The piece is an advocacy column from an industry representative and its figures are drawn from industry-commissioned and cited studies rather than independently verified data.
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