Private equity investment in orthopedic practices: Part of the changing landscape of health care

As orthopedic surgeons navigate the complexities of selecting their first positions, or established surgeons seek changes in employment, understanding the evolving financial and structural landscape of surgical practices is crucial. The rising influence of private equity (PE) in health care has added another dimension to this decision, as investment firms increasingly acquire stakes in practices to drive consolidation and profitability. Between 2015 and 2022, PE transactions in health care surged dramatically, reflecting the growing trend of practice consolidation in response to declining reimbursements, rising operational costs, and regulatory burdens. PE firms use leveraged buyouts to acquire and restructure practices, often forming management services organizations to streamline operations. Although PE partnerships offer benefits, including access to capital and corporate expertise, they also raise concerns about reduced autonomy, increased procedural volumes, and potential impacts on care quality and costs. This article provides an overview of PE's role in orthopedic practices, including its history, investment strategies, and the anatomy of typical deals. It explores the implications of PE partnerships on financial and clinical outcomes and highlights the importance of physicians staying informed about these developments. By understanding the benefits and risks, orthopedic surgeons can make more informed decisions in the context of a rapidly changing health care environment.