In an article in the Washington Examines, Nick Thomas delves into the contentious topic of the role of private equity ownership of healthcare entities. Dr. Razmi provided commentary for this piece and examined the pros and cons of what can happen when healthcare delivery organizations are owned by PE firms.
From the article:
“This has been a source of debate and tension as to whether these entities lean on medical clinics to cut corners and provide bare-bone care to lower costs,” Dr. Ronald Razmi, a former cardiologist and co-founder of Zoi Capital, which focuses on investing in AI healthcare tech solutions, said.
Citing the Journal of American Medicine, Razmi added, “[A] study published in JAMA in December 2023 indicates that the quality of care suffers after a hospital is acquired by a PE firm, presumably from the pressure to cut costs.”
Private equity has $2.49 trillion ready to invest, S&P Global Market Intelligence Global reported in July 2023. About 26% of its dry powder is more than four years old, waiting to be deployed, Keckley estimates.
There appears to be little doubt that advances in technology, particularly through AI solutions, will continue to be of interest to private equity groups, furthering their lock on involvement in the healthcare sector.
“AI aims to advance healthcare systems, making operations more efficient and enhancing patient outcomes,” Dr. Michael Everest, founder of Residents Medical, a Los Angeles-based organization designed to help medical students find residency programs, said. “The likelihood of high returns on investments with technology like AI is the reason so many private equity firms are choosing healthcare.”
