As private equity eats up healthcare enterprises in the U.S., should Canadians worry about its presence here?

Panelists had warnings about the potential impacts private equity could have on Canada’s healthcare sector at the Canadian Doctors for Medicare’s Health Summit earlier this month. “[For the private equity firms] this is less about venture capital. Now, it’s about buying stuff up . . . owning stuff,” said Armine Yalnizyan, an economist and the Atkinson Fellow on the Future of Workers. Yalnizyan was joined by fellow panelists, Matthew Tracey, a registered nurse and doctoral student in Health Policy with the Institute for Health Policy, Management and Evaluation at the University of Toronto, as well as Dr. Henry Annan, a pediatrician and academic fellow at Toronto’s Hospital for Sick Children.The panel was moderated by Dr. Edward Xie, an emergency physician and clinical investigator at Toronto’s University Health Network. While it’s difficult to pinpoint the precise number of healthcare facilities owned by private equity firms in Canada, one company owns a chain of independent surgical centres across the country.“The largest national network of independent surgical centres—made up of 53 operating rooms spread across 14 cities in Quebec, Ontario, Manitoba, Saskatchewan, Alberta, and B.C.—are owned by a single private equity firm, nearly a monopoly,” wrote Dr. Danyaal Raza, a family physician with Unity Health Toronto’s St. Michael’s Hospital, and former Chair of Canadain Doctors for Medicare, in an article for Healthy Debate. The company—Clearpoint Health Network—is wholly owned by the private equity firm Kensington Capital Partners Ltd., which expanded its footprint across Canada in 2023, after an initial $35-million purchase of clinics in Ontario, Manitoba, Alberta and B.C., in 2019. Tracey emphasized the difficulty in quantifying private equity's presence in a given industry.The Private Equity Stakeholder Project, a non-profit watchdog based in the U.S., reported that as of February 2024, nearly 460 U.S. hospitals were owned by private equity firms. According to its research, that number represents 8% of all private hospitals and 22% of for-profit hospitals in the U.S. Research from the University of California, Berkeley, also found that 5,779 physician practices were owned by private equity in 2021—a major jump from just 816 in 2012. “Here, it might not be to that extent, but it’s something that we know is happening,” said Tracey. Canadian publicly traded companies like Telus Corp. and Loblaw Companies Ltd. have also entered the healthcare business, spending billions to do it—$2.9-billion for Telus’ 2022 acquisition of Lifeworks Inc., which own 15 outpatient clinics through Telus Health, and $12.4-billion, which Loblaw spent in its 2013 acquisition of Shoppers Drug Mart, where the company has started opening primary-care clinics called Shoppers Health—to own their share of healthcare. In August, Shoppers president Jeff Leger told the Globe and Mail that its moves are giving people access to care that Canadians are lacking through the traditional public health system, saying “One in five Canadians don’t have access to a primary care provider. There’s lots of great solutions, but they take time to mature, and get more doctors. So people are turning to pharmacists and other professionals to help fill those gaps.” As for Telus Health operations; “Seeing a number of Telus offices has become a reality in B.C.,” Yalnizyan said at the panel discussion, “The first one popped up in Toronto not too long ago . . . I think we can expect a wave of them here.”Panelists sound the alarm on private equityPrivate equity gets in the way of healthcare that puts the patient and their health first, said Dr. Annan.In a 2023 literature review published in BMJ, researchers Dr. Joseph Brunch and co-authors wrote that global healthcare buyouts had already exceeded $200-billion from 2021 until the article was published in June 2023. The paper looked at 55 studies which had focused primarily on private-equity ownership of long-term care homes, hospitals, and dermatology clinics, and other related enterprises. That review noted that “evidence points to private equity ownership being associated with an increase in healthcare costs to patients or payers. Evidence across studies also suggests mixed impacts of private equity ownership on healthcare quality, with greater evidence that private equity ownership might degrade quality in some capacity rather than improve it.”While the panelists did not offer any immediate remedies to the current climate of private equity growth across Canada’s healthcare sector, they did call for more research to be done on what the impacts are for Canadians and the healthcare system. “We should be focusing on the care we need,” said Dr. Annan. “We need more care for more people. Continuous, high-quality care.”

As private equity eats up healthcare enterprises in the U.S., should Canadians worry about its presence here?

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