Private Equity Investment in Surgical Care

Objective: To characterize the extent of private equity investment affecting surgical care. Summary Background Data: Over the last decade, investor-backed, for-profit private equity groups have invested in healthcare at an unprecedented rate, but the breadth of these investments affecting surgical practice remains largely unknown. Methods: Four nationally representative databases were used to identify all merger/acquisitions involving surgical practices between 2015-2019, determine private equity investment in those transactions, and link the acquisitions with a physician dataset. Results: 1,542 unique transactions were identified, of which 539 were financed by private equity. 58 transactions were then classified into their respective categories within surgical care: digestive disease, orthopedics, urology, vascular surgery, and plastic/cosmetic surgery. These transactions accounted for 199 practice sites and 1,405 physicians, averaging 24.2 physicians per transaction. Acquisition activity peaked in 2017 with a total of 63 practices involved. Digestive disease, urology, and orthopedic surgery accounted for the most activity. General surgeons were involved in a small share of the digestive disease practice acquisitions. Three “surgery-adjacent” categories were also identified: anesthesiology, ambulatory surgery centers, and surgical staffing firms. Among these, anesthesia was the largest category in terms of practices (194) and physicians (2,660) involved in transactions across the study period. Medical Service Organizations (MSOs) were a key mechanism through which private equity firms invested in surgical care. Conclusions: Private equity has engaged in substantial investment within surgical specialties, creating increased practice consolidation. These investments affect all levels of medical care and have notable implications for patients, practitioners, and policymakers.