U.S. lawmakers are taking aim at private equity in health care. Here's what is happening in Canada

In the U.S., the growing role of private equity firms in health care is coming under heightened scrutiny, with Senate committee hearings and a cross-government public inquiry launched earlier this year. 

"When private equity firms buy out health-care facilities only to slash staffing and cut quality, patients lose out," said Federal Trade Commission Chair Lina M. Khan in a statement.

The U.S. Federal Trade Commission and two U.S. departments are looking at whether consolidated ownership may sacrifice patient care and worker safety to generate profits for private-equity investment firms, while costing taxpayers.

In the U.S., companies backed by private equity firms manage emergency rooms and anesthesiology practices. Private equity firms are even buying whole hospitals in the U.S.

That's not happening in Canada, but private equity investment firms have bought up facilities outside of hospitals, starting about 25 years ago with long-term care homes. That arrangement didn't show up on the public radar until the COVID-19 pandemic emergency, which hit care homes exceptionally hard.

Canadian researchers have found a disproportionate number of deaths in long-term care residences owned by private equity firms and large chains.  

As some provinces welcome private equity in public health care, the firms are increasingly involved in nursing homes and surgery clinics.

Here's what experts say has already happened and what could be around the corner.

So far, private equity firms have bought clinics outside of hospitals in Canada offering services including:

Provinces still pick up the tab for patients' medically necessary surgeries, such as cataract removals or hip and knee replacements.

One company, Clearpoint Health Network, owns a chain of private surgical centres running 53 operating rooms across the country.

Clearpoint is wholly owned by the $1.5 billion private equity firm Kensington Capital Partners Ltd. Kensington launched the chain through a $35 million purchase of clinics in Ontario, Manitoba, Alberta and B.C. in 2019. 

A private equity firm is an investment firm that purchases private companies that are not listed on stock exchanges and therefore has less regulatory oversight.

In health care, private equity firms may buy up independent clinics to create chains. The goal is to achieve economies of scale by, for example, purchasing medications in bulk or hiring a bookkeeping firm to manage multiple clinics — creating profits for shareholders.