Private Equity’s Revenue Cycle: Creating and Collecting U.S. Medical Debt

The Private Equity Stakeholder Project has launched an eye-opening report revealing the growing role of private equity firms in America’s mounting medical debt crisis. This comprehensive analysis, “Private Equity’s Revenue Cycle: Creating and Collecting U.S. Medical Debt,” sheds light on how private equity’s aggressive practices in debt collection and revenue cycle management (RCM) are fueling the financial struggles of millions of Americans.

Private Equity’s Revenue Cycle: Creating and Collecting U.S. Medical Debt

Key Points

• Medical debt has become a significant burden on U.S. patients in recent years, impacting 14 million people and totaling at least $220 billion
• Debt collection falls within a healthcare subsector called revenue cycle management (RCM), which includes identifying, managing, and collecting medical claims and patient payments
• In recent years private equity investment in revenue cycle management companies has been elevated despite a downturn in private equity investment more generally
• Private equity firms have consolidated debt collectors, medical payments, and other revenue cycle management functions into “end-to-end” service providers, coordinated from the point of initial patient contact to aggressive follow-up on payments for services
• Some private equity-owned debt collectors have suggested that they are more aggressive than other debt collection companies
• Private equity-owned revenue cycle management companies have increasingly helped facilitate loans – through medical credit cards, installment plans, and strategic partnerships with financial service providers – to indebt patients who cannot afford to pay a full medical bill at one time
• A number of private equity-owned debt collectors have received complaints in the CFPB consumer complaint database – which includes data going back to late 2011 – primarily around attempts to collect debts that are not owed or collecting wrong amounts
• There are measures lawmakers can take to address potential harms from private equity’s ownership of companies creating the debt crisis, including limitations on medical debt, restrictions on medical debt collectors, and increased ownership transparency.

Download the report PDF here: pestakeholder.org/wp-content/uploads/2024/09/PESP_Report_PE-Revenue-Cycle_2024-compressed.pdf