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Private Equity Firm vs. Privately Owned Anesthesia Partners

February 23, 2023

As the healthcare system faces ongoing perioperative challenges, many hospitals, hospital groups, outpatient surgery centers, and academic clinics are looking to work with an anesthesia management partner. And with good reason – the right partner can make a significant impact, from improving billing and collections to recruiting and placing top talent. But, in an industry full of promises, how do you know which one will stand behind their word? How do you know which partner is the right fit?

Most anesthesia management partners make the same assurances, but they can be quite different when you take a deeper look. For example, many of these companies are backed by private equity firms with multiple investor groups. Others, like Premier Anesthesia, are privately owned by healthcare companies dedicated to the needs of their clients.


Should it matter how a partner is financed?

It may not seem on the surface that how a management partner is financed makes a difference; however, when you take a deeper dive, the end goal of who this partner is indebted to – investor needs versus hospital needs – actually creates quite a disparity.

The bottom line is that different methods of funding are bound to create various incentives. How a business is financed influences how decisions are made, how much investment is given to process improvements or research, and the overall long-term commitment to customers. This contrast in values can significantly impact the medical facility and its patient care.


What is the difference between a company that is privately owned vs. one backed by an equity firm?

Privately owned anesthesia management companies have a personal attachment to the services they provide. By being invested in the actual business and believing in what they do, the company’s motivations are solely based on boosting its reputation by meeting and exceeding client needs. Management is hands-on, working towards the long-term success of the organizations they serve. Growing the business means focusing on customer satisfaction and offering the flexibility to scale as needs change.

The sole purpose of a private equity firm is to make money. They want to bring in more revenue than what they invested. These initiatives are often on a short timeline, so the decisions made only look at short-term needs rather than longevity. In order to make money quickly, the firm must reduce the anesthesia management company’s working capital to generate free cash flow, which often includes cutting costs and hitting clients with hidden fees, leaving hospital leadership uncertain of overall expenses. Then they add in restrictive contracts, productivity-based compensation models, and other tactics to drive down clinical compensation. Management is incentivized to find ways to grow swiftly so that the valuation increases in order to eventually sell the management company – often to another private equity firm.

That doesn’t sound like a recipe for long-term success, not to mention a lack of placing any significance on hospital or clinical goals. There is no investment for enduring growth, no money spent on future technology or solutions, and no importance placed on the hospital or patient experience.


The Premier difference 

When you choose a boutique, privately owned anesthesia management company, you get a personal level of service. Because a private company isn’t controlled by escalating margins or investment strategies, decisions are made by hospital leadership, not investors or shareholders.

At Premier Anesthesia, we make it our goal to deliver concierge-level solutions that are aligned with the hospital or clinic’s needs. We are not only privately owned but are part of Jackson Healthcare – a company consistently ranked one of the best workplaces nationally and serving over 10 million patients yearly. If you would like to learn more about our custom solutions created to reach your anesthesia department’s long-term goals, contact us today.