Following staunch criticism of private equity investments in healthcare from Democrats in Congress, Drew Maloney, president and CEO of the American Investment Council, and a North Carolina neuroradiologist defended the industry on Oct. 16.
“The reality is private equity investment in healthcare is better for patients; it's good for doctors; it's better for quality and maintains community engagement,” said Dr. Robert Mittl Jr., a neuroradiologist at Charlotte Radiology, at a Punchbowl News event in Charlotte, North Carolina.
In 2018, Charlotte Radiology partnered with private equity firm Welsh, Carson, Anderson & Stowe to form U.S. Radiology Specialists, which has grown to offer 175 imaging centers in 13 states, Mittl said.
“Most of our imaging centers are low-cost imaging centers which provide access to patients at a low price point (and are) easy to get to (and) freestanding…Our partnership with private equity has allowed us to gain capital and expertise to grow and continue to expand that access, that low-cost option for patients,” Mittl said.
Maloney, who oversees the private equity advocacy group American Investment Council, said that “private equity is really a partnership with these businesses.”
“We help provide the capital, and…this is a hugely capitally intensive business that needs to keep up with technology,” Maloney added.
Mittl contended that “there's an unfortunate narrative which is unfair and inaccurate about the effects of private equity investment in healthcare.”
Criticisms of PE in healthcare
Over the past year, Democrats introduced several bills aimed at private equity investments in healthcare. One bill from June would create a new criminal penalty for private equity executives who “loot” healthcare entities like nursing homes and hospitals, and a bill from July would require new disclosures from private equity firms that own healthcare entities.
On Oct. 10, a group of Democratic lawmakers reintroduced a bill in the House and Senate that would require private equity firms and their general partners to share responsibility for the liabilities of companies under their control, including debt, legal judgments and pension-related obligations, among several other provisions aimed at reforming the private equity industry.
Earlier at the event, Republican Sen. Thom Tillis, who represents North Carolina, commended private equity investments for their impact on the state.
“Private equity has been a very important part of the ecosystem to drive innovation and to really drive the historic growth that we've had in North Carolina over the last decade,” Tillis said.
American Investment Council's Maloney said North Carolina is the ninth largest recipient of private equity dollars in the U.S., adding that there are 600 private equity-backed businesses in the state.
