Updated:

Private Equity Firms in the Healthcare Industry Research Paper

Exclusively available on Available only on IvyPanda® Made by Human No AI

Introduction

The article “Private Equity Buyouts in Healthcare: Who Wins, Who Loses?” by Appelbaum and Batt (2020) explores the impact of private equity firms on the revenue cycle management (RCM) sector of the healthcare industry. According to the authors, private equity companies are progressively becoming critical actors in the healthcare business, notably in the RCM sector, which manages medical debt collections. Private equity groups have been buying RCM companies that utilize aggressive collection practices, like suing patients and garnishing salaries, to recover medical debt from patients. These techniques have resulted in widespread criticism and governmental scrutiny of the RCM industry. According to the authors, the engagement of private equity firms in the RCM industry has had a negative impact on patients, particularly those with minimal financial resources (Appelbaum & Batt, 2020). Private equity businesses have raised the already high prices of healthcare services, which can be especially difficult for people who are uninsured or underinsured.

Negative Impact of Private Equity Firms on the RCM Sector

Private equity firms have further worsened the RCM sector’s existing problematic practices, such as surprise medical billing and the use of unscrupulous debt collection methods. The authors propose that authorities take steps to limit private equity companies’ engagement in the RCM industry (Appelbaum & Batt, 2020). Policymakers may, for example, force RCM businesses to be more transparent and accountable, prohibit the use of abusive debt collection techniques, and mandate RCM companies to provide more extensive financial help programs for patients.

Limiting the Involvement of Private Equity Firms in the RCM Sector

Governments investigate alternate healthcare finance models, such as nonprofit or community-based healthcare systems. The authors point out that private equity companies’ participation in the RCM industry extends beyond debt collection (Appelbaum & Batt, 2020). Private equity companies have also been involved in combining small RCM providers, debt-loading them, and transforming them into enormous powerhouses with significant market dominance before departing with handsome gains. This policy has had a detrimental impact on patients by reducing competition, increasing expenses, and decreasing access to healthcare services, particularly in rural and disadvantaged regions.

Implications of Private Equity Firms in the Healthcare Industry

Policymakers should also consider measures to promote greater competition and diversity in the RCM sector, such as facilitating new provider entry and encouraging the development of alternative payment models that prioritize patient outcomes and affordability. The authors also discuss the possible implications of private equity companies’ engagement in the RCM industry on the more extensive healthcare system (Appelbaum & Batt, 2020). According to the authors, the profit-driven mentality of private equity companies may collide with the aim of providing patients with financial and high-quality healthcare services. Short-term financial benefits may be prioritized by private equity firms over long-term investments in healthcare infrastructure and patient care (Appelbaum & Batt, 2020). Moreover, private equity companies’ emphasis on cost-cutting strategies may result in personnel and resource reductions, which might jeopardize care quality and patient outcomes.

Conclusion

Finally, the authors contend that private equity companies’ engagement in the RCM sector of the healthcare business has harmed patients and communities. Governments should examine measures to limit private equity companies’ attention in the RCM industry, increase transparency and control, and encourage alternative healthcare funding and delivery models that prioritize patient outcomes and affordability. By doing so, governments may contribute to the long-term viability of healthcare services while also promoting better fairness and access to treatment for all patients.

Reference

Appelbaum, E., & Batt, R. (2020). Institute for New Economic Thinking Working Paper Series, 1–115. Web.

More related papers Related Essay Examples
Cite This paper
You're welcome to use this sample in your assignment. Be sure to cite it correctly

Reference

IvyPanda. (2024, September 18). Private Equity Firms in the Healthcare Industry. https://ivypanda.com/essays/private-equity-firms-in-the-healthcare-industry/

Work Cited

"Private Equity Firms in the Healthcare Industry." IvyPanda, 18 Sept. 2024, ivypanda.com/essays/private-equity-firms-in-the-healthcare-industry/.

References

IvyPanda. (2024) 'Private Equity Firms in the Healthcare Industry'. 18 September.

References

IvyPanda. 2024. "Private Equity Firms in the Healthcare Industry." September 18, 2024. https://ivypanda.com/essays/private-equity-firms-in-the-healthcare-industry/.

1. IvyPanda. "Private Equity Firms in the Healthcare Industry." September 18, 2024. https://ivypanda.com/essays/private-equity-firms-in-the-healthcare-industry/.


Bibliography


IvyPanda. "Private Equity Firms in the Healthcare Industry." September 18, 2024. https://ivypanda.com/essays/private-equity-firms-in-the-healthcare-industry/.

If, for any reason, you believe that this content should not be published on our website, please request its removal.
Updated:
This academic paper example has been carefully picked, checked and refined by our editorial team.
No AI was involved: only quilified experts contributed.
You are free to use it for the following purposes:
  • To find inspiration for your paper and overcome writer’s block
  • As a source of information (ensure proper referencing)
  • As a template for you assignment
Privacy Settings

IvyPanda uses cookies and similar technologies to enhance your experience, enabling functionalities such as:

  • Basic site functions
  • Ensuring secure, safe transactions
  • Secure account login
  • Remembering account, browser, and regional preferences
  • Remembering privacy and security settings
  • Analyzing site traffic and usage
  • Personalized search, content, and recommendations
  • Displaying relevant, targeted ads on and off IvyPanda

Please refer to IvyPanda's Cookies Policy and Privacy Policy for detailed information.

Required Cookies & Technologies
Always active

Certain technologies we use are essential for critical functions such as security and site integrity, account authentication, security and privacy preferences, internal site usage and maintenance data, and ensuring the site operates correctly for browsing and transactions.

Site Customization

Cookies and similar technologies are used to enhance your experience by:

  • Remembering general and regional preferences
  • Personalizing content, search, recommendations, and offers

Some functions, such as personalized recommendations, account preferences, or localization, may not work correctly without these technologies. For more details, please refer to IvyPanda's Cookies Policy.

Personalized Advertising

To enable personalized advertising (such as interest-based ads), we may share your data with our marketing and advertising partners using cookies and other technologies. These partners may have their own information collected about you. Turning off the personalized advertising setting won't stop you from seeing IvyPanda ads, but it may make the ads you see less relevant or more repetitive.

Personalized advertising may be considered a "sale" or "sharing" of the information under California and other state privacy laws, and you may have the right to opt out. Turning off personalized advertising allows you to exercise your right to opt out. Learn more in IvyPanda's Cookies Policy and Privacy Policy.

1 / 1