Although private equity and venture capital firms have increased investment in senior care in the past five years, much of that investment has gone toward at-home care and services, not nursing homes.
Home- and community-based services and technologies comprise a large investment pocket, along with Medicare Advantage primary care organizations, according to data reported by Axios.
Models that use innovation to address health inequities are another draw for investors.
Mitigating health inequities is low-hanging fruit for some investors and entrepreneurs, General Atlantic Managing Director Robert Vorhoff told Axios. His firm recently invested in Suvida Healthcare, which aims to provide a combination of at-home care and wellness services to Hispanic seniors.
“Where is the most potential to create value? It’s finding people that have been least well served by the existing infrastructure,” he said.
Although there has been much focus on nursing homes, much of the $206 billion private equity firms spent on health care in 2021 involved eye care clinics, dental management claims, physician practices, hospices, pet care providers and other health care companies, according to a Kaiser Health News report citing PitchBook data.
“Most of the innovation and new business models that have been developed have been about trying to keep people out of long-term-care facilities,” Devin O’Reilly, managing director at Bain Capital, told Axios.
This comes at a time when nursing homes are under increased scrutiny. In February 2022, President Joe Biden promised that the practice of Wall Street firms buying up nursing homes would end on his watch.
However, the exact proportion of nursing homes owned by private equity is a matter of debate. Some industry analysts say that the term “private equity” is being used too loosely and that only a small percentage of facilities are private equity-owned, as most large PE firms have divested of these assets.
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