Private Equity’s New AI Push Raises Old Questions for Healthcare

Artificial intelligence (AI) is no longer a future issue for healthcare workers. Hospitals, insurers, pharmacy chains, and health technology companies are already rolling out AI tools for documentation, scheduling, workflow management, patient communications, and administrative functions. Nurses are negotiating AI provisions into union contracts. Healthcare employers are training workers on how to use these tools. The debate over AI’s role in healthcare is already underway.

Yet, one important group is largely missing from the conversation: private equity firms.

In recent months, some of the world’s largest private equity firms have announced partnerships with AI companies including OpenAI, Anthropic, and Google. These firms are not merely purchasing software. They are entering relationships intended to accelerate AI adoption across the companies they own.

For healthcare workers, that deserves attention.

The private equity firms involved in these partnerships are tied to dozens of healthcare employers, including LifePoint Health, BrightSpring/PharMerica, Global Medical Response, Aveanna Healthcare, AccentCare, ScionHealth, Aspen Dental, Heartland Dental, Surgery Partners, Athenahealth, Ensemble Health Partners, and others. Together, these companies employ hundreds of thousands of healthcare workers across hospitals, home health, hospice, emergency medical services, physician services, dental care, healthcare technology, and revenue cycle management.

Many of these employers rely heavily on large administrative, billing, scheduling, customer service, and support workforces, the kinds of roles many companies are increasingly targeting for AI-driven productivity gains and restructuring. Hundreds of thousands of jobs are at risk.

Supporters of AI argue that automation can reduce paperwork, streamline workflows, and allow clinicians to spend more time with patients. Perhaps that will prove true in some settings. But healthcare workers should ask another question: if AI generates savings, who will capture them?

Private equity’s history in healthcare offers reason for scrutiny.

For years, private equity firms have promised that acquisitions, operational changes, and financial restructuring would create more efficient healthcare systems. Instead, many communities have witnessed a different pattern. Private equity owners extracted hundreds of millions of dollars from Prospect Medical Holdings while hospitals struggled financially and operationally. Steward Health Care paid out substantial sums to investors and completed financial transactions that enriched owners even as the system accumulated liabilities and ultimately collapsed.

The same dynamic has appeared outside of hospitals. At Sevita, a major provider of services for people with intellectual and developmental disabilities, private equity owners Centerbridge Partners and Vistria Group collected hundreds of millions of dollars through debt-funded dividend transactions while the company accumulated substantial debt and faced repeated scrutiny over quality and oversight concerns. The firms extracted $100 million from Sevita in 2019 and another $375 million in 2021 through dividend recapitalizations that added debt to the company. Regulators later warned that aggressive financial practices could leave less money available for staffing, training, facility maintenance, and other investments tied to quality of care.

The details differ from case to case. But the broader lesson is consistent: when private equity firms identify opportunities to generate financial returns, the resulting gains do not necessarily flow to patients, workers, or communities. That history should inform how healthcare workers evaluate today’s AI partnerships.

Private equity firms have significant influence over the companies they own. They can encourage management teams to adopt similar operational strategies across dozens of portfolio companies. They can push for new technologies that promise efficiency gains. And now, through these partnerships with AI companies, they may have additional financial incentives to require adoption by healthcare companies they own.

Yet, it’s not clear that AI will consistently lower costs. Recent experience across industries suggests implementation can be expensive, requiring significant investments in software, training, oversight, compliance, and ongoing management.

This does not mean AI should be outright rejected. New technologies can improve healthcare when implemented thoughtfully and transparently. But even if AI does create efficiencies or reduce costs, healthcare workers should ask what happens next. Will savings be reinvested in staffing, patient care, and clinical services? Will patients see lower costs or improved access? Will workers share in productivity gains? Or will the financial benefits primarily accrue to investors?

Healthcare workers have heard promises about efficiency before. Private equity-backed companies have pursued strategies promoted as improving operations or creating value, while regulators, workers, academic researchers, and communities later raised concerns about staffing levels, quality of care, facility investment, and financial sustainability.

If you work for one of the healthcare companies connected to these partnerships, don’t wait until new AI tools arrive in your workplace to start asking questions. Ask now how success will be measured, whether any savings will be reinvested in patient care and staffing, and who stands to benefit if those savings materialize.