“Private equity” refers to a business strategy in which investors pool large amounts of money to acquire companies with the goal of generating a return on the investment in the future. Nationally, private equity involvement in health care increased twentyfold between 2000 and 2018, and some studies, including a 2025 article published in the journal Health Policy, have associated private equity acquisition of healthcare facilities with worsened or mixed health outcomes for patients, raising concerns about the effects on the healthcare landscape.
In light of these concerns, researchers with the University of Arkansas for Medical Sciences and the RAND Corporation recently examined trends in private equity acquisition of nonprofit or government-run substance use disorder (SUD) treatment facilities. The purpose of the study was to determine whether private equity acquisition of these facilities occurs more frequently in underrepresented and under-resourced communities.
Research Focus and Findings
The researchers used data from the Mental Health and Addiction Treatment Tracking Repository to identify SUD treatment facilities in the U.S. that were operated by government or nonprofit entities in 2019 but were acquired by private equity between 2019 and 2024. The researchers then used tract-level U.S. Census Bureau data to identify demographic characteristics of the communities surrounding those facilities. Finally, they looked for associations between the communities’ demographic characteristics and private equity acquisition of the SUD facilities in those communities.
Of the demographic characteristics reviewed — such as rurality, percentage of residents with health coverage, racial composition, and median income level — only one, income level, was found to be associated with private equity acquisition of the SUD facilities. With every $10,000 increase in a community’s median income, there was a 6% decrease in the likelihood of private acquisition of a local SUD facility. In other words, private acquisition of SUD facilities occurred disproportionately in communities with higher rates of low-income households.
Insights for Arkansas
As of 2023, about 6% of SUD outpatient and residential facilities in Arkansas had been acquired by private equity firms. Given that about 1 in 6 Arkansas adults report some level of SUD, the state would benefit from monitoring private equity acquisition of SUD treatment facilities and healthcare outcomes among the facilities’ patients after private equity acquisition.
More broadly, Arkansas would benefit from monitoring private equity’s footprint across the entire healthcare sector. Arkansas is among 14 states that do not have some level of oversight over private equity transactions in healthcare, according to reviews by the National Conference of State Legislatures, Stateline, and JD Supra. As of 2025, at least 11 hospitals in Arkansas were controlled by private equity firms, and current trends suggest that number may continue to grow.
For more information on private equity involvement in health care in Arkansas, see:
Study: Patient Deaths Rose After Hospitals Were Acquired by Private Equity
ACHI’s Craig Wilson Looks at Private Equity in Health Care
A Cautionary Tale About Private Equity in Health Care
