private equity in mental health care

the question worth asking about any care model is simple: what does it get paid for? if it gets paid per day, per admission or per patient, expect more days, more admissions and more patients. private equity has spent the last decade buying mental health and addiction care. this page puts the research on what happened next beside that question, with what the studies found in both directions.

the wave

in 2010, 32 behavioral health facilities were part of an acquisition. in 2021, 1,330 were. across those twelve years 2,806 facilities changed hands, and private-equity-backed buyers accounted for about 60 percent of them.^[1] a second team counted 176 PE acquisitions in 2022 alone, covering more than 5,000 locations, and put PE at about 17 percent of behavioral health facilities on average across states.^[2] a third, counting differently, found PE owned 6.2 percent of mental health facilities and 7.1 percent of addiction facilities nationally.^[3] the numbers disagree on the level. they agree on the direction.

what the studies found, in both directions

every study on this table is observational. none is a randomised trial, most use deal databases that undercount, and several cover short windows. read the pattern, not any single cell.

psychiatric hospitals: fewer nurses, fuller beds, better scores

by 2021, 87 of the 617 freestanding psychiatric hospitals in the US, 14.1 percent, were PE owned. compared with other hospitals, they had fewer registered nurses per patient day (0.12 vs 0.15) and half the medical social workers (0.02 vs 0.04), and their beds were fuller, with occupancy 7.7 points higher. length of stay did not differ.^[4]

the other direction is in the same paper. PE hospitals reported far fewer hours of restraint, slightly fewer 30-day readmissions and more follow-up visits after discharge. the authors’ conclusion: “no evidence of lower quality among PE-owned facilities was found, although existing measures are limited.” those measures are reported by the hospitals themselves. one year, cross-sectional.^[4]

addiction treatment: more patients, shorter treatment

private equity owns 562 of the 1,932 opioid treatment programs in the country, 29.1 percent, through 11 parent companies. in 14 states it owns more than half, and in montana, nebraska and south dakota it owns all of them.^[5] in the median county where PE bought in, it bought 67 percent of the market. methadone supply and county opioid deaths did not change after acquisition.^[6]

at clinics prescribing buprenorphine, acquisition brought about 66 more patients per clinic per quarter, and 90-day retention fell 6.2 percentage points, 180-day retention 7.9 points.^[7] more people through the door, fewer staying. in addiction treatment, staying is most of what works.

the case for PE here is real: acquired treatment centers became 25 percentage points more likely to accept medicare and 15.4 points more likely to accept medicaid, which opens doors for people who had none.^[8] the case against is also real: in secret-shopper calls, PE residential programs quoted daily rates 15.6 percent higher and were less likely to offer detox.^[9] and PE-owned facilities cluster in counties with nearly twice the opioid death rate, which shows where the market is, not that PE causes deaths.^[10]

youth residential treatment: the senate report

in 2024 the senate finance committee published its investigation of residential treatment facilities for children run by four operators: universal health services, acadia healthcare, devereux advanced behavioral health and vivant behavioral healthcare. two are publicly traded, devereux is nonprofit, and vivant was founded in 2021 by the co-founder of sequel youth and family services, in which altamont capital, a private equity firm, bought a majority stake in 2017.^[11]

the committee quotes that co-founder on the business model: “you can make money in this business if you control staffing.” in 2015 sequel spent 62 percent of revenue on staff and made an operating profit of $30 million to $32 million.^[11] a publicly traded operator’s finance chief told investors that “broadly increasing occupancy” was its “most significant opportunity.” over 40 percent of that operator’s facilities had an average stay longer than six months in 2020 to 2022, and 35 of its facilities had double-digit restraint rates per 1,000 patient days in 2022, with the highest at 78.9. the committee also records that 36 of its 59 facilities reduced restraint from 2018 to 2022.^[11]

volume-driven care is bigger than private equity

the largest enforcement matters in inpatient psychiatry involve publicly traded chains, not PE firms, and they are about the same incentive. in 2020 universal health services agreed to pay $117 million to the federal government and states to resolve allegations that its behavioral health facilities admitted people “who were not eligible for inpatient or residential treatment,” failed “to properly discharge beneficiaries when they no longer needed” it, kept “improper and excessive lengths of stay,” understaffed, and improperly used “physical and chemical restraints and seclusion.” the agreement is “neither an admission of liability” nor a concession by the government.^[12]

in 2024 acadia healthcare paid $19.9 million, with no admission, to resolve an investigation into “medical necessity, admission eligibility, discharge decisions, length of stay and patient care issues.” it paid $17.0 million in 2019 over lab billing at seven west virginia opioid treatment centers. as of july 2026 it discloses open criminal and SEC subpoenas about admissions, length of stay and billing, and states that no findings have been made.^[13]

autism therapy

from 2015 to 2024, PE bought 574 autism service sites in 147 deals, four in five of them between 2018 and 2022, and entered first where diagnosed autism was most common. nobody has yet published what happened to the children’s care afterwards; the authors say it is “unclear” whether access improved.^[14] this is an evidence gap, and we label it as one.

nursing homes, where the evidence is oldest

the strongest single finding: for short-stay medicare patients, PE ownership raised mortality 11 percent, about 22,500 additional deaths over twelve years, with frontline nursing-assistant hours down 3 percent.^[15] for long-stay residents, another study found more avoidable emergency visits and hospital stays and 3.9 percent higher costs, and no change in antipsychotic use.^[16] earlier work found “little evidence” that quality worsened after purchase.^[17] for how antipsychotics are used in nursing homes regardless of owner, see antipsychotics in nursing homes.

the scorecard across health care

a 2023 BMJ systematic review of 55 studies of PE across health care found that of 12 studies measuring cost to patients or payers, none found lower costs and nine found higher. on quality, 12 of 27 found harm, 3 found benefit, 9 were mixed and 3 neutral. overall, 21 studies found some harm and 12 some benefit, and the pattern was less conclusive in the better-designed studies. it included no mental health settings, which is part of why this page exists.^[18]

what it adds up to

the ownership label matters less than the payment. a hospital paid by the bed-day has a reason to fill beds and keep them filled; a clinic paid per patient has a reason to add patients faster than it adds staff; a facility whose margin is its staffing line has a reason to cut it. private equity adds a short holding period to those incentives. the studies above show that pressure in staffing, retention and price, and they also show access gains and quality scores that did not fall. both are true at once.

if someone you love is going into a program, you do not need to read a balance sheet. ask who owns it, how many nurses are on at night, what has to be true for discharge, asked on day one, and for addiction care, how many patients are still in treatment at 90 days.

questions people ask

sources

1. Thornburg B, et al. Acquisitions of behavioral health treatment facilities from 2010 to 2021. Health Affairs Scholar 2024;2(7):qxae080. “the frequency of behavioral health facilities involved in acquisitions increased substantially, from 32 facilities in 2010 to 1330 in 2021. The total number of facilities involved in acquisitions was 2806”; “Private equity-backed acquisitions accounted for around 60% of all acquisition activity (N = 1678 facilities PE, N = 1128 facilities other for-profit).” PMID 38989063. https://pubmed.ncbi.nlm.nih.gov/38989063/
2. Singh Y, Cantor J, Fuse Brown E, Whaley C. Private equity penetration in behavioral health in the United States, 2010-2022. Journal of General Internal Medicine 2025;40(7):1690-1692. “PE acquisitions in behavioral health increased from 1 acquisition with 38 locations in 2010 to 176 acquisitions spanning over 5000 individual locations by 2022”; “Across all states, 16.90% of facilities (SD = 12.24%) were acquired by PE by 2022.” Funded by Arnold Ventures. PMC12052728. https://pmc.ncbi.nlm.nih.gov/articles/PMC12052728/
3. Zhu JM, Greenberg E, King M, Busch S. Geographic penetration of private equity ownership in outpatient and residential behavioral health. JAMA Psychiatry 2024;81(7):732-735 (with erratum). PE-owned practices “constituted 6.2% of all mental health facilities (652 of 10 324) and 7.1% of all SUD facilities (1152 of 16 174) nationally.” The estimates differ from source 2 because the two studies count facilities differently. PMC11063916. https://pmc.ncbi.nlm.nih.gov/articles/PMC11063916/
4. Shields MC, Yang Y, Busch SH. Private equity among US psychiatric hospitals. JAMA Psychiatry 2025;82(7):701-708. “By 2021, of the 617 freestanding psychiatric hospitals in the US, 87 (14.10%), representing 4660 beds (6.30%), were PE owned”; lower staff per patient day for registered nurses (0.12 vs 0.15) and medical social workers (0.02 vs 0.04); lower reported restraint hours (0.03 vs 0.24 per 1000 patient hours), 30-day readmissions 19.40% vs 20.16%, 7-day follow-up 29.34% vs 26.28%, 30-day follow-up 52.92% vs 49.08%; occupancy 7.66 points higher; no significant difference in length of stay. “No evidence of lower quality among PE-owned facilities was found, although existing measures are limited.” Cross-sectional, 2021. PMID 40397464. https://pubmed.ncbi.nlm.nih.gov/40397464/
5. Zhu DT, Song Z, et al. Private equity ownership of US opioid treatment programs. JAMA Psychiatry 2025;82(2):204-206. “We identified 1932 OTPs across 50 states. Of these, 562 (29.1%) were PE owned. PE-owned OTPs belonged to 1 of 11 parent companies”; “In 14 states, PE firms owned over 50% of OTPs, with 100% PE ownership in 3 states (Montana, Nebraska, and South Dakota).” PMC11800012. https://pmc.ncbi.nlm.nih.gov/articles/PMC11800012/
6. Singh Y, et al. Private equity acquiring large shares of the opioid treatment market without changing market-level methadone supply. Health Affairs 2025;44(9):1181-1189 (erratum April 2026). “PE firms acquired 67 percent of the OTP market in the median county with any acquisition”; methadone shipments to acquired programs rose 13 percent but “this was not statistically significant after adjustment”; “County-level methadone shipments and opioid mortality remained unchanged.” 2006-2019. PMID 40893070. https://pubmed.ncbi.nlm.nih.gov/40893070/
7. Holdaway T, et al. Private equity acquisition and buprenorphine prescribing. JAMA Network Open 2026;9(3):e260250. 90 acquired vs 2,374 never-acquired facilities, 2019 Q3 to 2021 Q2: “a mean increase of 65.66 (95% CI, 30.57-100.76; P < .001) patients receiving buprenorphine per facility quarter”; “decreases of 6.24 (95% CI, -11.47 to -1.00; P = .02) percentage points in 90-day retention and 7.91 (95% CI, -13.96 to -1.86; P = .01) percentage points in 180-day retention.” Overlaps the pandemic. PMID 41770562. https://pubmed.ncbi.nlm.nih.gov/41770562/
8. Reimer J, King M, Busch SH. Private equity acquisition of substance use treatment centers increases probability of public health insurance acceptance. Health Affairs 2025;44(11):1378-1385. “PE acquisition increased the likelihood that establishments accepted Medicare by 25 percentage points off a base of 30.1 percent and increased the likelihood that establishments accepted Medicaid by 15.4 percentage points off a base of 62.6 percent”; no differential change in offering common medication treatments. 321 acquired vs 1,926 comparison establishments, 2009-2022. PMC13138564. https://pmc.ncbi.nlm.nih.gov/articles/PMC13138564/
9. Havlik JL, et al. Private equity-acquired residential treatment facilities vs other for-profit facilities. JAMA Health Forum 2026;7(4):e260414. Secret-shopper calls to 341 residential substance use facilities (127 PE-acquired): “Mean (SD) daily rates were 15.6% higher at PE facilities ($910.73 …) compared with non-PE facilities ($779.87 …)”; PE facilities less likely to offer detox (74.8% vs 88.8%). Quoted prices, not paid claims. PMID 41931287. https://pubmed.ncbi.nlm.nih.gov/41931287/
10. Holdaway T, et al. Private equity investment in SUD treatment facilities and opioid- and alcohol-related mortality. Psychiatric Services, online 11 September 2026. “Counties with (vs. without) PE ownership had nearly twice the opioid mortality rate (21.8 vs. 11.1 per 100,000 population)”; PE-owned facilities were more likely in urban areas. Cross-sectional: shows where PE goes, not that it causes deaths. PMID 42723009. https://pubmed.ncbi.nlm.nih.gov/42723009/
11. US Senate Committee on Finance. Warehouses of Neglect: How Taxpayers Are Funding Systemic Abuse in Youth Residential Treatment Facilities. June 2024. Investigation with the HELP Committee from July 2022 into facilities run by Universal Health Services, Acadia Healthcare, Devereux Advanced Behavioral Health and Vivant Behavioral Healthcare; over 25,000 pages of company productions. “In 2017, Ripley sold a majority stake in Sequel to Altamont Capital”; Ripley, co-founder of Sequel and Vivant, quoted: “you can make money in this business if you control staffing”; “As of 2015, Sequel had an operating profit in the $30-million to $32-million range, with revenues of $210-million to $230-million. Sixty-two percent of revenue was spent on staffing”; UHS CFO: “broadly increasing occupancy [of our behavioral business] is the most significant opportunity we see”; Medicaid was 39 percent of UHS behavioral health revenue and 53.9 percent of Acadia’s revenue in 2023; “over 40 percent of UHS facilities had an average LOS longer than six months” in 2020 to 2022; “35 UHS facilities had a double digit restraint rate per 1,000 patient days, with the highest being 78.92,” while 36 of 59 UHS facilities reduced restraint use from 2018 to 2022. The report relies partly on news reporting for background; figures quoted here are the committee’s own or the companies’. https://www.finance.senate.gov/imo/media/doc/rtf_report_warehouses_of_neglect.pdf
12. Settlement Agreement between the United States (DOJ, on behalf of HHS-OIG, TRICARE, OPM and VA), Universal Health Services, Inc., UHS of Delaware, Inc. and relators, July 2020; filed as Exhibit 10.1 to the UHS Form 8-K. Recital D alleges false claims for inpatient behavioral health services from 2006 through 2018 “resulting from UHS’s (i) admission of beneficiaries who were not eligible for inpatient or residential treatment, (ii) failure to properly discharge beneficiaries when they no longer needed inpatient or residential treatment, (iii) improper and excessive lengths of stay, (iv) failure to provide adequate staffing, training, and/or supervision of staff, (v) billing for services not rendered, (vi) improper use of physical and chemical restraints and seclusion”; “UHS shall pay to the United States and the Medicaid Participating States One Hundred Seventeen Million Dollars ($117,000,000)”; Recital F: “neither an admission of liability by UHS nor a concession by the United States that its claims are not well founded.” The 8-K puts the civil resolution of the behavioral health investigation at $127 million including two related relator cases. https://www.sec.gov/Archives/edgar/data/352915/000156459020032190/uhs-ex101_17.htm
13. Acadia Healthcare, Form 10-K for fiscal 2024 (filed 27 February 2025): the federal investigation “focused on claims not eligible for payment because of alleged violations of certain regulatory requirements relating to, among other things, medical necessity, admission eligibility, discharge decisions, length of stay and patient care issues”; on 23 September 2024 a civil settlement “with no admission of liability or wrongdoing,” $19.9 million paid to the federal government and four states. Form 10-K for fiscal 2019: $17.0 million paid in 2019 over how seven West Virginia opioid treatment centers billed Medicaid for lab claims. Form 10-Q for Q2 2026: grand jury subpoenas from the DOJ Criminal Division re-issued in December 2024 on “admissions, length of stay and billing practices,” and SEC subpoenas; the company states no findings have been made. https://www.sec.gov/Archives/edgar/data/1520697/000095017025029095/achc-20241231.htm
14. Arnold DR, et al. Private equity in autism services. JAMA Pediatrics 2026;180(3):341-343. “Between 2015 and 2024, we identified PE-acquired 574 ASD service delivery sites, stemming from 147 acquisitions”; 79.6 percent of acquisitions in 2018-2022; entry was more likely in areas in the top third of autism prevalence; the authors write it “is unclear if this is leading to increases in availability and accessibility to ABA services.” No outcome data. PMC12771383. https://pmc.ncbi.nlm.nih.gov/articles/PMC12771383/
15. Gupta A, Howell ST, Yannelis C, Gupta A. Owner incentives and performance in healthcare: private equity investment in nursing homes. Review of Financial Studies 2024;37(4):1029-1077. Abstract: “after instrumenting for the patient-nursing home match, we find that PE ownership increases mortality by 11%.” Working paper (NBER w28474, August 2023): “about 22,500 additional deaths occurred due to PE ownership over the twelve-year sample period”; “a 3% decline in hours per patient-day supplied by the frontline nursing assistants.” Short-stay Medicare patients, 2000-2017. https://doi.org/10.1093/rfs/hhad082
16. Braun RT, et al. Association of private equity investment in US nursing homes with the quality and cost of care for long-stay residents. JAMA Health Forum 2021;2(11):e213817. Against other for-profit homes: ambulatory-care-sensitive emergency visits up 11.1 percent, hospitalizations up 8.7 percent, costs up 3.9 percent ($1,081 a year per resident); “Private equity acquisition was not significantly associated with antipsychotic use (−0.2 percentage points; 95% CI, −1.7 to 1.4 percentage points; P = .83).” PMC8796926. https://pmc.ncbi.nlm.nih.gov/articles/PMC8796926/
17. Stevenson DG, Grabowski DC. Private equity investment and nursing home care: is it a big deal? Health Affairs 2008;27(5):1399-1408. “we found little evidence to suggest that nursing home quality worsens significantly following purchase by private equity companies.” https://doi.org/10.1377/hlthaff.27.5.1399
18. Borsa A, Bejarano G, Ellen M, Bruch JD. Evaluating trends in private equity ownership and impacts on health outcomes, costs, and quality: systematic review. BMJ 2023;382:e075244. 55 studies. Costs: “No studies showed lowered costs to patients or payers (ie, a beneficial impact), whereas nine showed increased costs … and three found no differences.” Quality: of 27 studies, 12 harmful, 3 beneficial, 9 mixed, 3 neutral. “21 studies in total identified at least some form of harmful impact, whereas 12 identified some form of beneficial impact.” Less conclusive when limited to moderate-risk-of-bias studies. No behavioral health settings were included. PMC10354830. https://pmc.ncbi.nlm.nih.gov/articles/PMC10354830/

not cited, on purpose: the department of justice press releases for the universal health services and acadia matters (justice.gov blocked automated reads on the day this page was built, so the executed settlement agreement and the companies’ own SEC filings are cited instead), and any figure we saw only in news coverage.

related: what the drug fraud settlements add up to · who makes money in health care

adam