How Private Equity Is Buying Up Medical Billing Companies

Episode notes

Episode 96 of The Buyout Show dives into the quiet consolidation of medical billing companies by private equity. Lucas and Luna explore why firms like R1 RCM and Athenahealth have become acquisition targets, and how PE is betting on the backend of healthcare. They discuss the business model: billing companies take a percentage of reimbursements, and by rolling up smaller players, PE can gain pricing power with hospitals and insurers. The hosts zero in on a specific deal: the 2023 take-private of R1 RCM by New Mountain Capital and TowerBrook Capital, valued at roughly $8.2 billion. They unpack the logic - medical billing is fragmented, cash-flow heavy, and resistant to tech disruption. But they also raise the question: when PE owns the billing infrastructure, who gets squeezed - hospitals, insurers, or patients? A sharp, concrete look at a slice of healthcare most people never think about.

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