• Private equity-backed companies like Availity and Waystar are helping to ease disruptions caused by a recent cyberattack on health care transaction management systems – at no cost to providers.

• Researchers at Georgetown University, the University of Indiana, and more find that private-equity backed hospitals maintain quality of care while improving operational efficiencies and expand access to innovative and essential service lines.

• Private equity is working to be part of the solution for systemwide challenges in health care, including staffing shortages and expanding rural care access.

Throughout U.S. health care, strategic private equity investments are helping drive solutions – from performing critical functions during a crisis and streamlining business operations to helping resolve industrywide challenges.

 Alleviating disruptions to care and provider reimbursement caused by widespread cyberattacks

A recent cyberattack on a large health care company that manages patient claims, payment services, billing and data exchanges, and more has left thousands of providers without the ability to file claims, be reimbursed for care, or obtain insurance approvals for services. Disruptions resulting from what is the most significant cyberattack on the U.S. health care system in history have also left patients without the ability to obtain lifesaving medication and are costing providers as much as $1 billion per day.

Fortunately, while the company works to bring its systems back online safely, private equity has stepped in to provide relief across the health care system. Impacted businesses – including health insurance companies like Humana, Wellpoint, and Centene – are shifting from affected platforms to private equity-backed revenue cycle management companies, such as Waystar and Availity, to help manage these disruptions. Availity’s volume of claims, for example, has surged by up to 70% since the system outages, and the company has not only connected patients to insurers through its platform, but also more than 300,000 providers. Further, Availity is offering these services at no cost during the disruption, ensuring that providers can focus on delivering care to patients during the ongoing crisis while getting their day to day operations back on track.

“We’re building some really strong relationships with people in need right now,” Availity CEO Russ Thomas said in a recent interview with The Washington Post, adding that the current outage could be even more disruptive than the COVID-19 pandemic and especially harmful for smaller health operations. “As a physician, you’ve got to provide care for the patients. They just can’t bill for it right now,” he said.

 Filling gaps in the U.S. health care system and helping providers improve financial performance

In other parts of the U.S. health care system, private equity investments are improving facility operations and financial stability. For example, a study from researchers at Duke University, the University of Texas, and more published in Health Affairs found that hospitals’ financial performance improved after being acquired by private equity, while another found that private equity-acquired hospitals had stronger operating margins compared to non-acquired hospitals. These improvements are essential to the viability of hospitals and other health care facilities and ensure they are able to continue providing life-saving care to patients in their communities. Additionally, research from Georgetown University and the University of Indiana has shown that private equity improves hospitals’ operational efficiencies without compromising quality of care.

In strengthening financial stability, private equity is also helping enhance the patient experience and expand access to an array of services. Separate research from Duke University and the University of Texas found that, compared to non-acquired counterparts, private equity-backed hospitals were quicker to adopt profitable and more technology-intensive service lines without reducing services deemed unprofitable. In fact, private equity acquisition was associated with increasing the profitability of important services like mental health care that many organizations previously categorized as unprofitable – benefitting patients in need of critical care across the country.

 Tackling systemic challenges through strategic investment

Amid the growing complexity of the U.S. health care system, private equity investments help alleviate persistent issues impacting the sector, including ongoing workforce shortages. For example, research has found that the ratio of core workers – which includes physicians, nurses, and pharmacists – to overall employees increased at hospitals acquired by private equity firms.

Other health care specialties are also benefiting from these strategic investments. For example, private equity is increasing salaries in the autism spectrum disorder (ASD) care field to recruit and retain more employees, while in fields like hospice care, some private equity-backed providers are offering better nurse-to-patient ratios (1:9) than the industrywide average (1:13-15).

Private equity is also helping to address access challenges in some of the most underserved communities in the country, including rural areas. Rural hospitals are often the only source of care for rural and underserved communities. However, as they continue to face financial hardships, private equity is ensuring that rural communities maintain access to life-saving care by investing in hospitals that have higher rurality scores and are located in ZIP codes with lower median household incomes.  

 The bottom line

Private equity is helping providers across the country better serve their patients and deliver uninterrupted care.