Private Equity Partnerships in Orthopedic Groups: Current State and Key Considerations

Abstract

The orthopedic physician group sector remains an attractive area of investment for private equity because the demand for orthopedic care is high, yet the supply of orthopedic surgeons in the U.S. is relatively low. This supply and demand imbalance provides for long-term sustainable growth of orthopedic services within a highly fragmented clinical specialty. With an approximate $1.8 trillion dollars of private equity capital ready to be deployed within the healthcare services industry, private equity remains an increasingly more available option to orthopedic practices. While partnerships among and between orthopedic groups and private equity firms can result in significant benefits, in today’s environment, private equity may also serve as an advantageous pathway for independent orthopedic groups to bolster their financial strength and better position themselves to weather the post-COVID-19 storm.