Private equity firms are buying up medical equipment suppliers, and it’s leading to patient harm, report says

In recent years, private equity (PE) firms have acquired companies across the healthcare industry, from dental support organizations to those focused on value-based care. But they’re not stopping there: PE firms are also acquiring companies that make medical supplies.

PE firms have increasingly bought up medical equipment companies over the last decade, which has led to cost-cutting strategies that, at times, can compromise patient care, according to a report from nonprofits the Private Equity Stakeholder Project (PESP) and the National Disability Rights Network.

“Due to the private equity industry’s extreme focus on profit, patients are forced to endure potentially life-threatening delays, costs, and legal hurdles to access the equipment needed to manage their health,” PESP said in a statement.

The report, released this month, focuses on durable medical equipment (DME) manufacturers, which make medical supplies like wheelchairs, blood sugar meters, respiratory equipment, and other supplies patients use to manage chronic conditions and disabilities. The DME industry was worth $60 billion in 2022, according to PESP.

“As private equity firms continue to buy medical equipment manufacturers and suppliers, they have sought to cut costs to maximize outsized returns,” Eileen O’Grady, research and campaign director at PESP, said in a statement. “We have found these typical PE business practices result in quick profits for the firms, often at the expense of patients.”

Some of those cost-cutting initiatives include layoffs, which can result in patients having to wait “weeks or even months” to get “critical repairs” done on their medical equipment, O’Grady wrote in the report.

Cost-cutting initiatives at the two largest wheelchair suppliers in the US—Numotion, owned by PE firm AEA Investors, and National Seating & Mobility, owned by PE firm Cinven—have been linked to lagging repair times for patient DME, according to the report.

And demand for DME is only increasing thanks to the aging US population, higher rates of chronic diseases, and a push to move hospital services into patients’ homes.

In the report, O’Grady made several policy suggestions to limit potential patient harm, including legislation that mandates timely equipment repairs, eliminates prior authorization requirements for repairs, and limits industry consolidation.

“Delays to repairs are more than just an inconvenience to an individual who relies on a mobility device—they are exclusionary and life altering,” Marlene Sallo, executive director of the National Disability Rights Network, said in a statement. “We must act on the policy reforms called for in this report to ensure that corporate profits do not outweigh the needs of people with disabilities.”

Trade group the Medical Device Manufacturers Association, which represents medical equipment manufacturers, didn’t respond to Healthcare Brew’s request for comment.