Roger Strode Quoted on Private Equity Investment in Medicare Advantage

Foley & Lardner LLP partner Roger Strode is quoted in the STAT News article, “Private equity investment in Medicare Advantage drops,” commenting on the reduced level of private equity investment in Medicare Advantage-related companies.

Even though private equity deals are mostly funded through equity, Strode said that debt is necessary to create returns. Right now, money is so expensive that these deals may not attract investors.

“Once interest rates begin to settle down, you’re going to see a lot of industries that have a big uptick,” Strode explained. “There’s just so many people sitting around with capital that they’d like to employ, but if they need debt to employ that equity, they’re not going to do it because the rates are too high.”

Strode noted that the practice of consolidating small companies, making them more profitable — even through taking on debt — and selling them to bigger ones will always exist. “As long as for-profit medicine is out there, someone is going to fill this void,” Strode added.

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