Private Equity Investment in Behavioral Health Facilities: What It Means and How We Combat It

Cory Bernstein, J.D., and Eileen O’Grady

In recent years, for-profit private equity firms have bought inpatient psychiatric and behavioral health inpatient treatment settings. Facing limited regulatory oversight, these firms stealthily acquire behavioral health facilities and implement their business model emphasizing immediate returns on investment. Here, private equity firms profit by cutting costs, exploiting government programs, reducing service quality, and ultimately endangering residents.

Combining their research and field experience and building off respective presentations at the 2021 National Disability Rights and Consumer Voice Conference, Disability Rights New Jersey’s Cory Bernstein and Private Equity Stakeholder Project’s Eileen O’Grady will detail the role and dangers of private equity investment in behavioral health settings.

This workshop has the following learning objectives:

• Understand the private equity business structure and factors leading to their interest in behavioral health-related investments
• Discuss and provide real world examples of how private equity’s investment model exploits and harms residents, who are overwhelmingly people of color
• Examine how these activities persist through regulatory shortcomings and systemic racism
• Identify and examine successful advocacy against private equity operated Sequel Youth and Family Services as a model for future efforts
• Offer advocacy-centered policy recommendations on combatting private equity investment in behavioral health