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The Dose


Private Equity Promised to Revolutionize Health Care. Is It Making Things Worse?

Illustration, small people in business suits putting money into a hospital like a piggy bank

Illustration by Rose Wong

Illustration by Rose Wong

  • The multi-trillion-dollar business of health care in the U.S. has become an attractive venue for private investors, who promise efficiency and cost savings in exchange for profit

  • On The Dose podcast, Yale University’s Howard Forman, M.D., finds the growing role of private equity in American health care is, on the whole, failing to live up to its promises — and may actually be deepening inequality


Health care is a $4.3 trillion business in the United States, accounting for 18 percent of the nation’s economy. It should come as no surprise then that the industry has become attractive to private investors, who promise cost savings, expanded use of technology, and streamlined operations.

But according to Yale University’s Howard Forman, M.D., “most private equity money does seem to be making matters worse rather than better.” One issue is that investors chase the healthiest and most profitable patients, undermining another kind of equity — health equity — in an already deeply unequal health care system.

In this episode of The Dose podcast, host Joel Bervell charts a wide-ranging discussion with Dr. Forman, a professor of radiology and biomedical imaging, public health, management, and economics, about private equity’s growing role in American health care. This is the second episode of our new series of conversations about health care affordability.


JOEL BERVELL: The conversation around health care affordability is so layered. For patients, what matters is access to treatment and diagnostics that are aligned with the standard of care. But who gets that care depends too much on who you are, where you live in the United States, personal finances, and, ultimately, the economics of health care.

My guest today on The Dose is Dr. Howard Forman, a Yale professor of radiology and biomedical imaging, public health, health policy, management, and economics at Yale University. He’s the faculty director and founder of Yale’s M.D./M.B.A. program, and the health care focus area of the Executive M.B.A. program.

Dr. Howard Forman has been wrestling with the tough questions around health care and affordability for more than 30 years, and also remains an active clinician in the Yale-New Haven Emergency Room, where he functions as the deputy operational chief for radiology. So his ideas are informed by continued clinical practice.

My connection to his work is both personal and professional. His insights deeply influenced my thinking as an undergrad when I took his class, and many of the ideas that I continue to grapple with today about what the medical system can and should look like, began there in the classroom with him. Dr. Forman continues to shape the conversation in this country around cost and care.

Dr. Forman, welcome to The Dose.

HOWARD FORMAN: Thanks very much for having me, and I’m just so impressed with what you’ve accomplished and what you’re still doing here to, as you say, promote equity, access, and hopefully a more affordable, fair health care system.

JOEL BERVELL: Thank you. And like I said, it truly, it started in that classroom. So, to kick it off, medicine is big business here in the United States: $4.33 trillion is the most recent official estimate according to the Centers of Medicaid and Medicare — about 18 percent of the economy. And you’re not only a professor of medicine at Yale, but you’re a practicing doctor with an M.B.A. You went to Wharton. So, simple question: Do you have faith that the market can solve the issues right now?

HOWARD FORMAN: Absolutely not. When I graduated Wharton, I was and still am a real capitalist. I believe that markets, when properly functioning, can lead to better outcomes than the heavy hand of government per se. But health care is very, very different from that, and the way health care operates in this country is even further different from what might otherwise be baseline assumptions. And we’re in a system that is unsustainable and that will not solve its own problems.

JOEL BERVELL: And what about private equity as a solution? Private equity acquisitions in every studied health care setting have become increasingly prevalent, and we have an industry that needs vast reform, that’s really difficult. And private equity is promising the hope of real cost saving, tech expansion, streamlining operations. What are your thoughts on that?

HOWARD FORMAN: Look, I think that private money invested in health care can lead to better outcomes in specific cases. I’m not dismissing that the private sector cannot, does not, will not be part of some solutions, but at the moment, most of the private equity money does seem to be making matters worse rather than better in aggregate.

It doesn’t mean that they couldn’t improve, for instance, operations in skilled nursing facilities. But what it does mean is that in aggregate right now, when private equity dollars are chasing commercially insured individuals, when they’re chasing the healthiest and most profitable patients, rather than being equitable themselves, the problem’s getting worse.

JOEL BERVELL: Is private equity, by definition, out of alignment with physician concerns?

HOWARD FORMAN: Look, private equity is just an investor, it’s one type of investor. I mean, let’s just put definitions there. Private equity just means that there are large funds available to make large, specific investments either for a share of or all of an entity. It’s not that different than saying private ownership of something with shareholders that receive dividends and other rewards associated with that ownership.

So, I don’t want to blame private equity per se, but what people think of when they think about private equity right now is the purchasing of ophthalmology practices, radiology practices, emergency medicine practices, and so on.

JOEL BERVELL: Mm-hmm. And I also want to spend a minute talking about what’s going on with special-purpose acquisition companies, SPACs, and the state of entrepreneurship overall in the health care landscape. So many startups have the most hyped and highly valued IPOs and are offered huge promises and potential for impact, but then a lot of them are flaming out. And so I’m curious: Is there a real value in them? And what about net gains for people that actually need care? Can there be winners?

HOWARD FORMAN: Yeah. So, for the last almost 15 years, from 2007 to early 2022, the cost of capital was ridiculously low because we intentionally held interest rates down extremely low, and it meant that a lot of investors saw nothing else that they can do with their money other than invest it rather than put it in the bank, earn interest, buy a bond. They were buying investments and health care seemed like a hot thing to buy.

First you had the ARA, the stimulus bill, which had a lot of technology dollars available. Then you had Obamacare, 2010, more money for health care. And then subsequent to that, several other acts of Congress including the COVID bills that had even more money for health care. It’s not surprising that when there’s more federal and state spending and cost of capital is almost zero, that people are going to take greater and greater risks. Some of those risks may have real rewards. We may, in fact, learn a lot from some of these start-ups, but what we’re seeing increasingly is that most of these companies, even five or 10 years out, are not becoming profitable even as they go after the most profitable patients.

So, we’re seeing private equity investments flame out, as you mentioned, SPACs are flaming out. And we’re seeing a lot of the unicorns that are out there, or they might have been unicorns, meaning that they achieved the billion-dollar valuation, even those are coming back down to Earth.

JOEL BERVELL: What are the mistakes being made? Is it that the individuals that are starting these companies don’t understand the landscape of what they’re getting into, that they’re giving up? What is it that’s making them flame out?

HOWARD FORMAN: Yeah. So, my answer is that this is a space that takes a lot of time to see rewards, to see real progress. And so, a lot of these companies are actually making progress. They’re making it honestly in some ways in record time, but they’re still not achieving profitability, and it’s only this enormous flux of dollars that is allowing them to thrive. Most of these companies would’ve gone out of business during a normal business cycle.

I am praying that we’re going to see some fruits of this labor from a lot of these companies, whether you’re talking about the Cityblocks, or the Aledades, the Ioras, the Oak Streets, smaller companies like Nest — I want them to succeed. And I’m not criticizing any of them individually, but we are seeing a huge amount of money flow into these companies, and despite the fact that the press makes it sound like they’re all hugely successful, almost none of them are making a margin yet.

JOEL BERVELL: It makes me think about even larger companies like Amazon, what they’re trying to do to be more innovative and how even they are pulling out and, in ways, failing a lot. I mean, what are your thoughts about larger companies that have come into and are putting so much investment dollars towards the health care space saying, can we be the ones to actually solve this?

HOWARD FORMAN: Right. So, private equity firms may have a billion or 2 billion in a fund. Venture capital funds may also have something similar. But then look at Amazon, Google, Facebook, Apple, and Microsoft. They have, I think between, I think I looked this up recently, between $60 and $120 billion of cash on hand.


HOWARD FORMAN: And they’re all cashflow positive. So, they’re not only having cash on hand, but they all have the ability to make massive investments. And even they are pulling back from some of these investments because they realize this is a 10- or a 20-year project, it’s not a three- to five-year project, and you better be ready to double and triple down if you’re going to proceed because pretty soon it’s going to be real money, as they say.

JOEL BERVELL: Yeah. I had a conversation not too long ago here on The Dose with Ashlee Wisdom. She founded a company called Health In Her HUE. It’s a platform that connects Black women and women of color to culturally sensitive health care providers, evidence-based health content. I’m curious: Do you see startups addressing real needs, being able to succeed, even if the outcomes aren’t there? And will companies, private equity, venture capital funds, keep investing in these people even if they’re not necessarily making real profit?

HOWARD FORMAN: Yeah. Right. That’s the issue. So, every one of the companies I mentioned has a mission that I can align with. I don’t think there’s anything wrong. A lot of them are using technology to make doctors’ practices more efficient, be able to reach patients more easily, sometimes through telemedicine and other technologies.

There’s a company called Included Health, which started off as also reaching out to a marginalized community and continues to help employers provide better care to marginalized communities, as you’ve described. Nest Health down in Louisiana, there’s another one that’s trying to provide better health care to newborn children and their parents, particularly in the Medicaid population. I mean, there’s so many companies, Cityblock, which is trying to use community-based care. The companies that are trying to address the high-cost Medicare Advantage patients — all of these have great ideas.

What I’m indicating is that we’ve pumped up a lot of these companies with a lot of capital. We’ve seen them have very high market capitalizations. We haven’t seen them become sustainable. What you said about profitable is the same thing as saying sustainable, because as we say in medicine, all bleeding stops eventually. Right?


HOWARD FORMAN: If a company can’t make a margin, it will eventually cease to exist. So, we need these companies to figure out how to become sustainable and to meet their mission.

JOEL BERVELL: Yeah. You’ve mentioned some great companies already, but as some high-profile health care entrepreneurs face challenges as valuations are dropping, some are declaring bankruptcy. Where do you see the best thinking and modeling happening for health care innovation? Not necessarily specific companies, but just even areas, because health care is huge, right? You can think about so many different spaces.

HOWARD FORMAN: Yeah. So, the most exciting thing for me this week, and we talked about it on our podcast this week, and the reason why it came up so much for me I’ll say, is because we have our alum, Mandy Cohen, the CDC director, coming here this week at Yale. And Mandy Cohen, when she was the secretary of health of North Carolina, came up with this Healthy Opportunities pilot project in North Carolina, which launched about a year ago, around the time that she left the job, but this five-year pilot launched then.

It’s all about social determinants of health. It’s all about delivering healthy food, delivering nutrition education, helping people tackle housing instability, housing insecurity, helping people afford housing. So many things all around social determinants of health. And here’s the great thing about it. It’s being done with a research overlay. So, we’re going to hopefully get answers about what works and what doesn’t work. It’s being done on a fairly large scale: $650 million over five years.


HOWARD FORMAN: Not tiny, right? This is Medicaid money. It turns out it’s only about 0.5% of Medicaid spending for North Carolina, but still, $650 million in what will probably be about $130 billion in Medicaid spending over the next five years. That gives me a lot of hope because social determinants of health are not being tackled to the same degree that we’re tackling health care, health technology, biomedical innovation. And Cityblock is the closest thing to looking at social determinants in the context. But I like to see big dollars going after it.

JOEL BERVELL: That actually got me excited because I agree. I think social determinants of health have been overlooked for a long time, but they are often, for many patients, the most important thing, right? Whether you can even go to the hospital in the first place, whether you have access to food in your area, if you’re in a food desert, whether you even financially can support yourself. So, I think looking at that, and like you said, the research lens of it too, will be huge to be able to see, is it replicable in other states? Can this be actually taken up? Can this be a federal model that’s then pushed out? Now you got me excited about it.

HOWARD FORMAN: Yeah. No, look, this is what I hope for. We have a lot of questions. They’re not going to all get answered in the private sector. We’ve got to test them. Like you said, we’ve got to test them in different populations, different states. We got to prove them.

But we can’t always throw up our hands and say, “It’ll take too long to get the answer.” Because what I’ve found in my career, I’m just 25 years into teaching that undergrad course that you took, 25 years, and if I think back to how many things that I thought would’ve been resolved in five years, that we still don’t have answers to, it frustrates me even more and makes me want to go back in time and just start to prompt us to answer those questions.

JOEL BERVELL: A little bit earlier. Yeah.


JOEL BERVELL: So, I want to switch gears a little bit. You’re widely published and frequently asked by young colleagues to coauthor journal articles on a wide range of topics. I imagine you do that based on issues you feel are urgent and are pressing. So, can you unpack, for example, your interest in one of your research studies? It’s called “Cost-Effectiveness of Chimeric Antigen Receptor T-Cell Therapy in Adults with Relapsed or Refractory Follicular Lymphoma.”

HOWARD FORMAN: Yeah. So, I like being involved in that because I personally was agnostic to the topic. All too often, what I find in cost-effectiveness papers is people go into it saying, “Oh my God, this new technology, CAT scans, MRIs, drug treatments, they’re fantastic. Now I just have to prove they’re cost-effective so people will pay for it.” And that’s not a great way to go into a research project. You should go into a research project completely agnostic, completely open to the possibility that it is not cost-effective or at least that we should consider cost in our decisions.

So, I’ve been involved in a good number of projects in the last decade where my role really is mostly just to help them with the cost part of it and to make sure that we’re doing it in a methodologically strong way. I play small parts in most of these, sometimes larger roles, but the real question is: Is what we’re doing cost-effective? Even if the United States doesn’t use cost-effectiveness as a criteria to cover something or not, we should still know the answer. It should not be scary to know the answer to whether something is or is not cost-effective. And that leads us to more and more of these big questions. And that’s what I’m about. I’d like to know more and more information, not less and less. I don’t want to hide my head in the sand about what cost is.

JOEL BERVELL: Yeah. What was it about the cost of this T-cell therapy that you felt deserved a closer look? Or, I guess, why this to connect it to the larger issue of cost in the United States?

HOWARD FORMAN: So, it’s more about picking the right populations and figuring out what is the cost in different populations. And so this particular paper, the actual outcome of it is less the point for me, but for people to consider that very often we will look at something and say, “This drug therapy works.” But then when doctors prescribe it, as you know, doctors can prescribe — once something’s approved, they can prescribe it for anything.


HOWARD FORMAN: When you broaden the number of things you can prescribe something for, you very often get to a point where it’s no longer as effective, it’s no longer as cost-effective in those populations. So, for me, the issue really is answering those questions. And for this, it’s marginally, this is not an outrageous expense, the populations we looked at. Sometimes they will be, sometimes the answer is going to be, in order to cover this population, it’s going to cost a million dollars per extra year of life. The public should be thinking about what that means.

JOEL BERVELL: One thing that you said got me thinking. I think a lot about what the role a clinician should be in this space. For me, taking your class changed the way I see health care, right? The way I’m going to think about prescribing medications to my future patients, the way I’m going to be interacting with people or prescribing different things. What role should physicians have when thinking about the economics of health care right now? Do you think doctors need to be trained more in this? I mean, I might be putting words in your mouth, but I mean, you started the M.D./M.B.A. program at Yale.

HOWARD FORMAN: Oh yeah, no, yeah, I’m biased about this. I don’t believe everybody should get an M.B.A. I don’t believe everybody has to be doing what I do or even what you do, but I do think basic understanding about the facts of the matter are key. I find there are a lot of physicians that almost enjoy the naivete of thinking that this practice is more lucrative because it’s more efficient, without recognizing that the reason why it’s more lucrative is because you’re not taking care of poor patients.

I would love medical students to at least consider that when they’re making decisions. You choose a specialty because you enjoy it, and you might choose a practice because it’s the right practice for you, but do not snow me or anybody else about the fact that the practice just operates really smoothly without revealing the fact that the practice may not see disabled patients, or it may not accept Medicaid patients, or it may be a one-floor walk-up. There’s so many things that practices do subtly that influence their profitability, and I think people need to understand what they’re getting into.

JOEL BERVELL: Absolutely. One of the conversations that I remember that we had in your class was about spending in the United States and how it should be quantified. And I kind of want to return back to the questions you asked us, which is: What is a human life worth, and what is a year of human life worth? And can we or can we not quantify it?

HOWARD FORMAN: Yeah. So, I don’t think we should ever say what a year of life is worth in a sort of esoteric way, but I do think we have to factor it in. And here’s the thought experiment that I would ask your listeners to consider. If we were to spend $10,000 to extend everybody’s life by one year, it’s definitely affordable. It’s very expensive, by the way, but it’s affordable. If you could tell me that we could extend everybody’s life by a full year of true quality, right? If we could do that, it is worth it.

Once you get up to $100,000 and you do the math, it’s budget breaking, right? But it’s still, you could actually make some arguments about it. And if you do the math, $100,000, 320 million people, I know it’s more than that, but the math works a little easier that way. You’re talking about $32 trillion. Well, $32 trillion spread out over an 80-year life expectancy, $400 billion a year, a massive amount of money. But you could imagine that being added in, if everybody got an extra full quality of life and it added to the productivity of the nation, there would be a lot of effects from it.

Once you push up to a million, there’s nobody in their right mind that can explain how that works because now you’re talking about not $400 billion over the next 80 years, you’re talking about $4 trillion a year for the — there’s no way to make that math work. So, we know that somewhere in the range of $100,000 or higher, you’ve got to consider what costs are in the context of human benefit.

JOEL BERVELL: Yep. I know myself and many others who are in health care believe one of the best solutions to the affordability problem is to create a level playing field with something like Medicare for All. I know that’s easy to say, but it’s a really hard conversation in this country where one, many people enjoy access to elite care in hospitals, and two, there’s political will on one or the other side to make things either work or not work for Medicare for All. So, how do we start the conversation now, after the ACA, and how far in the future do you think it might be before we get there?

HOWARD FORMAN: Yeah. So, this is a great question, and if I could wave a wand and import the National Health Service of England or something akin to Medicare for All here, I would do it. And I know I would be vilified by a lot of physician groups and others for saying that, but I sincerely believe that. Because it takes away one of the biggest problems in our health care system, which is that we’re not all on a level playing field and that people that do not have resources are treated absolutely differently than people with vast resources. And when it comes to health care, that has never been acceptable to the majority of people.

As you point out, it’s one thing to say it, you could even poll it and it’ll poll well, but actually doing it is almost impossible. People do not want to — they love where they get to go get their health care, and about half of the public, or if you include Medicare, much more than half the public, has access to whichever private doctors they want to see, whichever private hospitals they want to see. And then one in four or more Americans are going to federally qualified community health centers or other state, local, federal facilities to get health care, and they get a different level of care. It may actually be good outcomes, but it’s still a different level of care.

You throw everybody in the pot and say everybody’s equal, the majority of people in this country will feel that they’ve made sacrifices, and it’s very easy politically to fight against that. And so, I think getting to Medicare for All or a National Health Service with a wave of wand isn’t going to happen, but I do think we can get there through incremental reform. And by the way, Medicare for All is only one. Medicaid for All could also work.


HOWARD FORMAN: Medicaid does a very good job when you consider what they do for 90 million people right now, when you include the CHIP program, it’s phenomenal. We need to get more strength behind the idea that if we can get everybody covered first, then we can start to figure out how do you grow either Medicaid or Medicare to encompass more of the population? And maybe we can get there in 10 or 15 years.

JOEL BERVELL: Mm-hmm. Who should be convening these conversations? Is it physicians, is it patients, is it advocates? Is it the federal government? Is it state, local municipalities?

HOWARD FORMAN: So, I’ll give a shout-out to someone who I think has done a great job with this, and it’s not just one person, but I’ll mention one person for the moment is Dave Chokshi, who worked at Health and Hospitals Corporation, then went on to a commissioner of health of New York. And he and his team and Mitch Friedman, who’s the CEO of Health and Hospitals right now, have done a really good job of basically saying, “The city hospitals in New York do a fantastic job of delivering health and health care, even beside these rich institutions that they’re within blocks of, like Langone, Columbia, Mount Sinai, LIJ North Shore. All of these sit within a mile or two of a city hospital, and yet, the city hospitals do a fantastic job at what they do.”

I think we need more people to point this out. We need more people to realize that the bells and whistles of a flat panel TV in your room are not the things that will improve the society. The things that improve society are higher vaccination rates, higher compliance with best practices, surgeries with low complication rates, lower hospital-acquired infections, and so on.

JOEL BERVELL: Absolutely. Before I let you go, I have to ask this question. You’re a radiologist and obviously I’ve been on social media shining a light on racial disparities in health care and medicine. I have to ask about a recent article that you coauthored, entitled “Even in Radiology, Race Matters.” Could you explain for listeners what your findings were there?

HOWARD FORMAN: Yeah. So look, this is an editorial about a research paper done in the VA health system around certain types of interventions done there. And shockingly, with some pretty good correction for things, they found that if you’re a Black person, you’re getting worse care. Even correcting for income, correcting for other factors, same facilities, you’re getting worse care in many cases.

We know race matters in medicine. I will admit, I probably read something about it before 1998, but I can remember the first student paper written for me in my class in 1998 that talked about what we then called racial disparities in health care, and we now talk about in context of health equity. This is a problem, again, 25 years later, we’ve made very little progress.

In our editorial, we reminded people that just a year ago, the New England Journal of Medicine pointed out that as recently as the 1960s, radiology technologists were told to use higher milliamperage, higher X-ray beams, to penetrate the skin of Black people, despite the fact that there is no factual basis to this. And we know this follows in recommendations that have been made across specialties about how people have perceived Black people to be somehow biologically different from white people. When we’ve proven now over time and time and time again, it’s not the case.

So, we pointed some of these things out, and it’s just troubling to see that even as we take two steps forward, we’re still one step back. And we need more work on this. We need to understand what it is. It’s not just about explicit or implicit racism. It’s about structures within the way we deliver health care. It’s about the endowment that we allow people to accumulate in society that influences their access to health care and health. We have so much more work to do in this regard.

JOEL BERVELL: Absolutely. I couldn’t have said it better. Dr. Forman, thank you, thank you, thank you so much for being on The Dose. This was so fun to be able to have a conversation.

HOWARD FORMAN: Well, I mean, I couldn’t be happier to talk to you. I’m so proud of what you’re doing, and I just hope you keep up the great work.

JOEL BERVELL: Thank you so much. I’m following in your footsteps, so I really appreciate all you’ve done.

This episode of The Dose was produced by Jody Becker, Mickey Capper, and Naomi Leibowitz. Special thanks to Barry Scholl for editing, Jen Wilson and Rose Wong for art and design, and Paul Frame for web support. Our theme music is “Arizona Moon” by Blue Dot Sessions. If you want to check us out online, visit There, you’ll be able to learn more about today’s episode and explore other resources. That’s it for The Dose. I’m Joel Bervell, and thank you for listening.

Show Notes

Howard Forman, M.D., M.B.A., FACR

Why Culturally Competent Care for Women of Color Matters

Even in Radiology, Race Matters

Cost-Effectiveness of Chimeric Antigen Receptor T-Cell Therapy in Adults with Relapsed or Refractory Follicular Lymphoma

Publication Details



“Private Equity Promised to Revolutionize Health Care. Is It Making Things Worse?,” Nov. 3, 2023, in The Dose, hosted by Joel Bervell, produced by Jody Becker, Mickey Capper, and Naomi Leibowitz, podcast, MP3 audio, 28:45.