TLDR:
Private equity deals in the Medicare Advantage space are declining, according to a report by the Private Equity Stakeholder Project. The report found that deal volumes peaked in 2021 but have slowed in recent years due to tighter regulations and nationwide inflation. The analysts attributed the decrease in deals to rising interest rates and increased scrutiny of Medicare Advantage marketing practices. The report highlighted the correlation between profit-seeking efforts of private equity-owned health companies and fraud, as well as concerns about competition. The authors urged regulators to continue monitoring the role of private equity in the Medicare Advantage space.
Private equity firms have been interested in the rapidly growing Medicare Advantage space, but deal volumes are now slowing down due to tighter regulations and inflation, according to a report by the Private Equity Stakeholder Project. The report analyzed deal activity in Medicare Advantage between 2016 and 2023 and found that deals peaked in 2021 but have since declined. The report identified rising interest rates and increased scrutiny of Medicare Advantage marketing practices as possible reasons for the slowdown.
The report also highlighted the risks associated with private equity investment in the Medicare Advantage sector. Analysts noted a correlation between profit-seeking efforts of private equity-owned health companies and fraud. They also raised concerns about competition in the industry. Despite the decline in deal volumes, the authors urged regulators to continue monitoring the role of private equity in the Medicare Advantage space.
