Private Equity: A Roadmap for the Practicing Plastic Surgeon

The healthcare sector has become a prime target for private equity (PE) investors, with major firms investing in service platforms, medical devices, pharmaceuticals, and digital health. PE investors acquire companies, restructure them, and then resell the entities, typically within a three to seven-year timeline. From 2010 to 2020, PE investments in the healthcare sector increased by 166%, with $750 billion invested in the U.S. alone, and $115 billion invested globally in 2024. PE firms have invested increasing amounts in the plastic surgery specialty, with acquisition volume rising 4,300% and capital investments increasing 7,630% between 2000 and 2023. These trends are driven by market fragmentation, growth potential, and favorable financial characteristics, including high profit margins and recurring revenue. Financial sponsors have targeted practices with roll-up strategies and platform consolidations to achieve economies of scale. Policy variables, including Medicare reimbursement disparities and regulatory constraints on physician-owned hospitals, further incentivize consolidation. In response, multiple states, including Massachusetts and Indiana, have enacted transparency laws, and federal agencies have scrutinized the impact of PE on competition and care quality. In this manuscript, we encourage plastic surgeons to advocate for physician-friendly policies, pursue collaborative ownership models with PE sponsors, and engage in research on PE's impacts on care. As PE entities expand their ownership stake in plastic surgery and the broader healthcare sector, physicians must take a proactive role in the management, ownership, and policy issues that will govern such arrangements to safeguard care quality and physician autonomy.