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Healthcare firms regularly seek capital from public and private markets; however, our understanding of their responses to new investors is incomplete. We undertake a novel investigation of ambulatory surgery center (ASC) behavior change following three distinct financial events involving private equity. We show that list prices grow by up to 50% for the same mix of services and that private equity strongly crowds-in physician ownership. Some private insurers avoid private equity owned ASCs, leaving them more reliant on Medicare business. Overall, capital infusions affect the financial engineering of ASCs but typically not treatment styles––though heterogeneity exists across investment sources.

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This research was funded by NIA K01AG061274 and conducted by RAND Health Care.

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