The role of private equity (PE) in healthcare has expanded rapidly, reshaping financial and operational priorities. From large hospital systems to specialized physician groups and ancillary services, PE firms have been acquiring healthcare organizations at an unprecedented rate.

The repercussions from such investments are complex, potentially increasing healthcare costs, reducing the quality of care and reducing transparency in billing practices. These issues directly impact employers and plan sponsors responsible for managing healthcare benefits and costs.

The Challenge: Private Equity’s Profit-Centered Approach to Healthcare

PE firms are primarily structured so as to maximize investor returns in the short run. PEs  bring capital into struggling organizations by focusing on buying businesses that have already proven their abilities to generate revenue, to reduce instability, where there is significant opportunity for a high return on investment. PEs accomplish that by buying low, selling high, deleveraging the business over time, and increasing operational earnings.  That often includes prioritization of operational efficiencies and financial profits over improvements in patient outcomes and affordability. The following concerns have emerged:

• Rising Costs for Employers and Employees: PE-backed healthcare providers frequently drive up prices, increasing costs for employers, plan sponsors and employees. Actions often include increasing in-network fees as well as aggressive out-of-network pricing and billing practices.
• Deteriorating Quality of Care: Many reduce staff and patient services as part of the effort to boost profits – even if they affect the standard of care.
• Lack of Billing Transparency: Billing practices under PE ownership frequently lack accountability, with tactics such as surprise medical bills and complex pricing structures increase administrative burdens for claims administrators while adding financial stress experienced by employees.

The Impact on Employers and Plan Sponsors

PE investment in healthcare has increased the cost of coverage and medical services for both  employers and their employees. Some accept the increased cost – by either reducing spend on wages or other benefits, or perhaps increasing prices charged to customers. Others respond with proactive steps to control spending, improve transparency and safeguard employee access to quality care. Increasingly, the plan sponsor response includes a heightened scrutiny of the  provider network.

aequum’s Strategic Approach to Protecting Your Health Plan

aequum specializes in protecting employers and plan sponsors from the financial impact of excessive healthcare charges. aequum’s targeted approach focuses on legal advocacy, cost mitigation and billing transparency to protect your health plan and its participants.

• Identifying and Reducing Excessive Charges: aequum actively audits and disputes inflated provider charges, ensuring significant savings without sacrificing quality or access to necessary medical services.
• Legal Support for Billing and Claims Disputes: aequum’s legal team works directly with participants to challenge unfair billing practices, defend against excessive provider charges and support claims resolution efforts.
• Enhancing Transparency for Smarter Decision-Making: aequum provides clear data and insights to help plan sponsors evaluate provider costs, billing practices and reimbursement structures—empowering smarter, more informed choices.
• Proactive Cost-Control Strategies: By identifying inefficiencies in provider billing, analyzing cost patterns and promoting value-based reimbursement structures, aequum helps employers optimize healthcare spending while improving patient outcomes.

Navigating the Future: Proactive Planning for an Evolving Healthcare Marketplace

As private equity investment in healthcare continues to grow, employers and plan sponsors must be vigilant and pursue strategic approaches that will ensure their health plans remain cost-effective and sustainable.

With aequum’s specialized expertise, your organization can confidently navigate this evolving environment, control costs and safeguard the financial and medical well-being of your employees.

Contact aequum today to learn how we can help your organization protect its health plan from excessive charges and ensure financial sustainability.