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Private [Equity] Eyes are Watching Primary Care Clinics

While the healthcare sector has received more than its fair share of private equity interest over the past several years, investors have generally focused on health systems. Recently, however, that interest has expanded to include primary care clinics. The amount of private funds flowing into companies that run primary care clinics has exceeded more than a half-billion dollars, according to Bloomberg.

Experts contend that primary care physicians can and do have a big impact on patient health. These physicians, who are among the cheapest to employ, play an important role in helping patients navigate the system, thereby reducing the need for expensive tests, specialist visits, and even hospital stays.

Private equity sees the promise and opportunity in primary care. For example, a group of investors is sinking $165 million in Paladina Health, which operates roughly 53 clinics in 10 states. Venture capital firm New Enterprise Associates is leading the investment group, after acquiring Paladina for a reported $100 million earlier this year. The company will use the additional funds to build new clinics and acquire other firms.

And other private investors have put large sums into clinics. Carlyle Group LP is investing up to $350 million in One Medical. Amir Dan Rubin, CEO of One Medical, said his company will use the Carlyle funds to more than double from its existing 72 clinics. The company operates in eight cities and plans to expand to more locations.

Likewise, Iora Health raised $100 million earlier this year to expand its business, which operates primary care sites for elderly patients on Medicare.

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For questions, comments or concerns, please contact Jennifer Duell Popovec

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Read More at BloombergConnect With One Medical’s Rubin

About Jennifer Duell