Why Private Equity Works in Value-Based Primary Care
What disciplined private capital gets right—and why it should be scaled
Private equity has become one of the most influential forces shaping the future of primary care. While critics often paint all healthcare investment with a single brush, emerging evidence from value-based care (VBC) environments tells a far more constructive story, one that investors should pay close attention to.
A recent claims-based analysis of Medicare Advantage (MA) primary care platforms operating under full-risk and downside-risk contracts provides the clearest signal to date: Private equity investment in value-based primary care does not inflate costs and can help sustain high-performing care models at scale.1
That distinction matters—not just for policy debates, but for investors determining where disciplined capital can create durable, defensible value.
The right model meets the right capital
Unlike fee-for-service medicine, VBC aligns financial incentives with outcomes. Revenue depends on controlling total cost of care, managing chronic disease, and preventing avoidable utilization. In this environment, operational excellence—not volume—is the growth engine.
The study examined nearly 100,000 MA patient-years across multiple investor-backed primary care platforms between 2018 and 2024. These practices were fully committed to VBC models.
The findings are instructive:
- Total per-patient costs continued to decline after investment.
- No evidence of post-acquisition cost inflation was observed.
- Cost performance remained stable even through periods of rapid organizational change.
References
- Bujnowski A. Financial outcomes in value-based care: A comparative claims-based study of Medicare Advantage patients in investor-backed primary care practices pre/post investment [dissertation]. Birmingham (AL): University of Alabama at Birmingham; 2025.
