Private equity's slow creep into doctors' offices
Add Axios as your preferred source to
see more of our stories on Google.
Photo: Thomas Barwick/Getty Images
Private-equity firms accelerated their acquisitions of doctors' practices between 2013 and 2016, according to a new JAMA study.
Why it matters: "Private equity firms expect greater than 20% annual returns, and these financial incentives may conflict with the need for longer-term investments in practice stability, physician recruitment, quality, and safety," the author writes.
- "There may be additional pressures to increase revenue streams (eg, elective procedures and ancillary services), direct more referrals internally, and rely on lower-cost clinicians," she adds.
By the numbers: 355 physician practices were acquired by private-equity firms over the time period, a small portion of total practices. But industry reports suggest that the growth kept up in 2017 and 2018.
- The most commonly acquired medical groups were anesthesiology, multi-specialty practices and emergency medicine.
Between the lines: The role of private equity in health care has fallen under heavier scrutiny recently, as Congress examines the billing practices of physician groups that are frequently private equity-owned.
- Private equity might have made things worse for itself when it became involved in the surprise billing debate via physician staffing firms that it backs.
- These groups have poured millions of dollars into ads urging Congress not to pass a surprise billing solution that'd be more costly to providers.
Go deeper:
