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Wharton Business Daily

Private Equity Firms are Investing in Mental Health? New Research Shows the Rise of these Investments

Jun 27, 2024
Wharton Healthcare Management Professor, Marissa King, discusses new research on private equity investments in mental health facilities. They explore the impact, benefits, drawbacks of consolidation, geographical concentration, and the effects on healthcare outcomes.
08:51

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Quick takeaways

  • Private equity firms are investing in outpatient behavioral health clinics, driven by rising demand for mental health services.
  • Geographic concentration of private equity acquisitions in mental health facilities is influenced by Medicaid policies and insurance coverage.

Deep dives

Private Equity Investing in Mental Health Facilities

Private equity firms are increasingly investing in mental health and substance use disorder treatment facilities, with around six to seven percent of these facilities now owned by private equity. The rising demand for mental health services and treatment for opioid use disorder has led to this trend. Consolidation of facilities by private equity companies is occurring, potentially improving operational efficiency but also raising concerns about pricing and quality of care.

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