The Performance and Value Implications of Leveraged Buyouts in the Healthcare Industry

Mayock, Jake

Publication

The Performance and Value Implications of Leveraged Buyouts in the Healthcare Industry

Mayock, Jake

Date

2017

Additional date(s)

2017-05-19

Abstract

Over the past few years, the healthcare industry has been facing consumer and political pressures to decrease overall healthcare system costs and to increase the quality of care provided. New reimbursement policy changes by the Centers for Medicare and Medicaid Services reward hospitals that are able to decrease costs while increasing quality, and punish those that are unable to do the same. This reimbursement change-up has led to increased M&A activity, and created a hot-spot for middle market private equity firms. The focus of this paper is to examine the role of private equity firms within the hospital industry and their ability to contribute to an increase in quality of care for specific healthcare providers. This research aims to answer the question of whether or not private equity firms can create value beyond standard financial measures, and increase value for their investors without compromising on the value for healthcare consumers.