164 Characterization of Market Movements and Private Equity in Neurosurgery Practices and Hospitals

Abstract

INTRODUCTION: Surgical services could be faced with shifts in corporate management, restructuring, and incentives as trends such as private equity (PE) investment in healthcare continue to evolve. The number of surgical services acquired by PE firms has increased significantly over the last 20 years. Due to financial vulnerability and movement towards digital health, PE activity within healthcare has further grownsince the COVID pandemic. METHODS: PitchBook and Mergermarket were used to query deals involving neurosurgical practice within the United States at any time. Exclusion criteria consisted of non-neurosurgery practices and debt restructuring deals without a change in ownership. The company name, deal type, financing year, and state were extracted for each deal. Deal type was stratified by the following categories: angel investment, mergers and acquisitions, private equity and venture capital (PE/VC), and corporate buyout. Internal debt refinancing such as leveraged recapitalization was excluded from the analysis. RESULTS: A total of 125 companies were discovered in the initial search. After further review, 63 companies were included in final analysis. The deals occurred between 1994 to 2022 and involved companies in 27 different states. Of the 63 companies, 36 (57.1%) involved mergers or acquisitions, 16 (25.4%) involved private equity or venture capital firms, 7 (11.1%) involved corporate buyouts, and 4 (6.3%) involved angel investments. CONCLUSIONS: PE is increasingly involved with neurosurgery practices, with an associated decline in mergers and acquisitions. Future qualitative investigation is required to help characterize physician attitudes of PE-run practices in comparison to non-PE practices.