Expansion of Private Equity Involvement in Women’s Health Care

Abstract

This cross-sectional study examines the clinical and societal implications of the exansion of private equity in women’s health care.

An influx of private equity involvement in women’s health care has garnered attention and scrutiny.¹ Over the past decade, private equity firms have increasingly invested in or acquired hospitals, physician practices, laboratories, and biomedical device companies. Private equity firms use capital from corporations or wealthy individuals to invest in and acquire organizations and generally sell their holdings within 3 to 7 years.² Proponents argue that they produce economic value by increasing operational efficiency while maintaining or improving the quality of care. Critics fear that the need to quickly achieve high returns on investments may conflict with the quality and safety of care or exacerbate health inequities.³ Recent evidence shows growing acquisitions of physician groups across specialties between 2013 and 2016,⁴ which is aligned with larger trends in the corporatization of medicine.⁵ Despite the growth and geographic breadth of private equity involvement in health care, to our knowledge, relatively little empirical research exists, especially in women’s health.

We document formerly non–private equity women’s health care companies, including physician networks, practices, and fertility clinics, that gained a private equity affiliation between 2010 and 2019. This evidence aims to inform discussions about the clinical and societal implications of private equity in women’s health.

Methods

Using market reports and multiple methods of verification, we identified organizations (ie, target companies) specializing in women’s health that transitioned from non–private equity to private equity–affiliated between 2010 and 2019. Affiliations included direct acquisitions, recapitalizations, and undisclosed financial partnerships, with targets providing clinical obstetrics/gynecology (OB/GYN) or fertility services. We describe the method of identifying affiliations and inclusion criteria in eTable in the Supplement. This study was exempt from institutional board review because it did not involve human participants nor was any of the publicly available data used directly or indirectly based on human participant information.

We assessed whether OB/GYN offices are located in urban or rural areas by the zip code rural-urban commuting areas geographic taxonomy, version 3.10 (US Department of Agriculture). This mapping uses the 2010 Census work commuting data to classify zip codes from 1 (metropolitan) to 10 (rural) using the size and direction of primary commuting flows. We assessed average median household income using the zip codes for these offices.

Results

We found 24 target companies that gained private equity affiliation between 2010 and 2019 (Table). Acquisitions accelerated over the period studied, with 17 occurring between 2017 and 2019. In total, we found 605 offices and 2019 clinicians (ie, physicians, nurse practitioners, nurse midwives, and physician assistants) at the time of affiliation. As of 2020, we identified 1340 offices and 3989 clinicians.

Table. Women’s Health Organizations With Private Equity Affiliation From 2010 to 2019.

Equity investora	Buyera	Target companya (description)	Year of completion	Offices at the time of affiliation	Clinicians at time of affiliationb	Current officesc	Current cliniciansb,c	Current location(s)
Ares Private Equity Group	Ares Private Equity Group	Unified Physician Management (OB/GYN)	2013	NAd	375e	540	1700e	12 Statesf
Audax	Audax	Women’s Health Care Group of PA (OB/GYN)	2017	45	120e	NAg	NAg	Pennsylvania
Audax	Audax	Regional Women’s Health Group (OB/GYN)	2017	65	165	NAg	NAg	New Jersey
Audax	Axia Women’s Health	OB/GYN of Indiana (OB/GYN)	2019	9	45b	120e,g	300g	Indiana
Deerfield Management Company	Deerfield Management Company	Advantia Health (OB/GYN)	2016	10	12	48	200e	Washington DC, Illinois, Maryland, Missouri, and Virginia
Lee Equity Partners	Prelude Fertility	Advanced Fertility Center of Chicago (fertility)	2018	3	3	3	3	Illinois
Lindsay Goldberg	Lindsay Goldberg	Women’s Care Florida (OB/GYN)	2017	71	230	100e	360	Florida
Lindsay Goldberg	Women’s Care Enterprises	London Women’s Care (OB/GYN)	2019	1	29	1	28	Kentucky
Lindsay Goldberg	Women’s Care Enterprises	North Florida Ob-Gyn (OB/GYN)	2019	38	70e	37	70e	Florida
Lindsay Goldberg	Women’s Care Enterprises	Palm Beach Obstetrics & Gynecology (OB/GYN)	2019	3	8	3	9	Florida
Regal Healthcare Capital Partners	Regal Healthcare Capital Partners	Extend Fertility (fertility)	2019	1	5	1	5	New York
Sagard Capital Partners	Sagard Capital Partners	IntegraMed America (fertility)	2012	130	NAd	153	180	32 Statesh
Summit Partners	DuPage Medical Group	La Grange Women’s Clinic (OB/GYN)	2016	2	6	1	4	Illinois
Summit Partners	DuPage Medical Group	Southwest Women’s Healthcare Associates (OB/GYN)	2016	2	3	2	3	Illinois
Summit Partners	DuPage Medical Group	Glenwood Medical Corp. (OB/GYN)	2017	1	2	1	4	Illinois
Summit Partners	Summit Partners	Ob Hospitalist Group (OB/GYN)	2010	120e,i	600	180e,i	700e	32 Statesj
Sverica Capital Management	Women’s Health USA	Arizona OBGYN Affiliates (OB/GYN)	2018	10	52	11	50	Arizona
Sverica Capital Management	Women’s Health USA	Central Texas OB/GYN Associates (OB/GYN)	2018	NAd	NAd	9	56	Texas
Sverica Capital Management LLC	Women’s Health USA	Institute for Women’s Health (OB/GYN)	2019	8	30	8	29	Texas
Sverica Capital Management	Women’s Health USA	Women’s Health Connecticut (OB/GYN)	2019	80	250e	91	240	Connecticut
TA Associates	TA Associates	CCRM (fertility)	2015	NAd	NAd	23	34	9 Statesk
Webster Equity Partners	Webster Equity Partners	Santa Monica Fertility (fertility)	2019	1	3	2	3	California and Florida
WindRose Health Investors	Ovation Fertility	Institute for Reproductive Health (fertility)	2018	3	5	4	7	Ohio and Kentucky
WindRose Health Investors	Ovation Fertility	Midwest Fertility Specialists (fertility)	2018	2	6	2	4	Indiana
Totals				605	2019	1340	3989	38 States

Abbreviations: NA, not applicable; OB/GYN, obstetrics/gynecology.

^aEquity investor refers to the private equity firm involved with the affiliation. Buyer refers to the company/subsidiary within the equity investor portfolio that is directly making the affiliation. When no buyer exists, the name of the equity investor is used. Target companies are the organizations specializing in women’s health that transitioned from non–private equity to private equity–affiliated between 2010 and 2019.

^bClinicians include physicians, nurse practitioners, nurse midwives, and physician assistants.

^cWe identified current offices and clinicians as of March 1, 2020.

^dInformation could not be found in publicly available sources.

^eNumbers of offices or clinicians listed as over or nearly a certain value on publicly available sources have been rounded to that value.

^fArizona, Washington D.C., Florida, Georgia, Maryland, Minnesota, North Carolina, New Jersey, New York, Texas, Virginia, and Washington.

^gOrganization was fully incorporated into Axia Women’s Health; number indicates total count of consolidated offices/clinicians.

^hPublicly identifiable locations include Alabama, California, Florida, Georgia, Idaho, Illinois, Maryland, Missouri, Mississippi, North Carolina, Nevada, New York, Pennsylvania, South Carolina, Texas, Utah, Virginia, and Washington.

ⁱShows number of hospitals where affiliated clinicians practice.

^jAlaska, Alabama, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Kentucky, Louisiana, Massachusetts, Maryland, Michigan, Missouri, Mississippi, North Carolina, Nebraska, New Jersey, New York, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, Washington, and Wisconsin.

^kCalifornia, Colorado, Georgia, Massachusetts, Maryland, Minnesota, New York, Texas, and Virginia.

We found 17 target companies that were OB/GYN practices or networks and 7 target companies that provided fertility services. We located and mapped 533 (39.8%) of the 1340 offices of the 17 OB/GYN target companies in 2020. We excluded 180 hospitals contracted with the Ob Hospitalist Group (13.4%) and 439 offices (32.8%) without identifiable locations (Figure). Of the 533 offices, 240 (45.0%) were located in the Northeast, 229 (43.0%) in the South, 29 (5.5%) in the West, and 34 (6.4%) in the Midwest. Using the zip codes of these offices, we found that the average median (SE) household income was $76 107 ($1470) and the rural-urban commuting area score was 1.19 (0.04), which corresponds to a highly metropolitan area. Overall, 520 (97.6%) of these offices accepted Medicare and 453 (85.0%) accepted at least 1 form of Medicaid. Private insurance was accepted at all of these offices.

Figure. Private Equity–Affiliated Obstetrics/Gynecology (OB/GYN) Offices in 2020.

We mapped 533 OB/GYN offices in 2020, excluding the 180 hospitals contracted with Ob Hospitalist Group and 439 offices without identifiable locations. No mapped offices were located in Alaska or Hawaii.

Discussion

There has been a substantial increase in private equity affiliations in women’s health care since 2017. Private equity–affiliated OB/GYN offices are located in urban locations, with an average 2017 median household income 24% higher than the 2017 national average of $61 372.⁶ They generally accept Medicare, Medicaid, and private insurance. Several private equity firms have affiliations with multiple target companies, suggesting that these firms may have growing influence in women’s health.

Our analysis does not represent the totality of private equity investment in the women’s health sector. Target companies affiliated with private equity before 2010 whose affiliation was not publicly reported or who did not primarily provide OB/GYN or fertility services were excluded.

How the incentives of private equity firms interact with the clinical mission of women’s health is a critical area of inquiry. Future debate about private equity in women’s health will likely be shaped by the associations between economic incentives and quality of care, elective or cosmetic procedures, and access to reproductive health services, especially among low-income, LGBTQIA, and other disadvantaged populations.

Supplement.

eTable. Expanded Methodology