Private Equity Investment in Health Care: A Look at Trends in 2024

Private equity firms continued to invest in health care at a steady pace in 2024, despite the increasing regulatory scrutiny and high interest rates, according to an annual report from the Private Equity Stakeholder Project.

The report tracked 1,049 unique PE-backed health care deals in 2024, a 7.6% decrease compared to 2023. The deals included 166 leveraged buyouts, 262 growth/expansion investments, and 621 add-on acquisitions to 383 unique platform companies. At least 16 PE firms completed 10 or more deals. And at least 13 PE-owned platform companies made five or more add-on acquisitions, over half of which were dental care companies.

Dental care, health IT, outpatient care, medtech and pharmaceutical services were the top five subsectors for PE investment in 2024. There were 139 deals involving outpatient care providers, consisting of six leveraged buyouts, 28 growth/expansion investments and 105 add-on acquisitions. This represented a 28.7% decrease from the 195 outpatient care deals tracked in 2023. Among outpatient physician specialties, eye care was the most active for PE dealmakers. There were 18 eye-care-related deals in 2024, although the specialty saw a 50% decrease from the 35 deals tracked in 2023.

Total PE deal activity has declined since 2021, which was most likely due to high interest rates, according to the report. In addition, PE investors are facing increased regulatory scrutiny in recent years, with federal and state lawmakers introducing bills focused on reining in PE’s involvement in health care. In January, Massachusetts passed a law that will increase regulators’ oversight over health care deals involving PE investors and sharpen financial penalties for companies that don’t comply with reporting requirements. Meanwhile, the Senate Budget Committee recently released a bipartisan report in which it found “private equity investment in health care has negative consequences for patients and providers.”

The Private Equity Stakeholder Project’s report, however, predicted a resurgence of health care dealmaking in 2025, due to falling interest rates and the expectation that the Trump administration will view PE investment more favorably than the Biden administration.

This article was reprinted from AIS Health’s weekly publication Health Plan Weekly.