Private equity firms that have acquired doctor-owned medical practices appear to be taking steps to squeeze out more profits, according to a new study.
After being acquired by a private equity firm, the clinic saw more patients and charged more visits among a large population with commercial insurance. JAMA Health Forum By researchers at Oregon Health & Science University and other institutions.
Researchers examined the practices of a total of 578 physicians specializing in dermatology, gastroenterology, and ophthalmology acquired by US private equity firms between 2016 and 2020.
“The reason this is a concern for patients and policy makers is that private equity is often subject to profit margins of 20% or more,” said the senior author. Jane M. Zhu, MD, Associate Professor, Osu Medical University School of Medicine (general medicine and geriatrics). “In order to do that, we need to generate higher revenues or reduce costs. The increase in private his equity in these doctors’ practices could be a sign of the continued corporatization of healthcare.” .”
It is not clear whether these practices impair patient clinical outcomes. But the findings highlight parallels with the rapid growth of private his equity acquisitions in nursing homes and hospital systems.
“Private equity investments in nursing homes are associated with increased short-term mortality and changes in staffing,” the authors write, citing previous studies.
In a new study, researchers found an increase in the total number of patients seen in these clinics. The study also reviewed commercial claims data showing an increase in the proportion of visits longer than 30 minutes, even though case complexity remained similar to pre-acquisition cases.
“These billing patterns could mean more efficient documentation of services provided. Alternatively, it could mean insurers upcoding or upcharging to make more profit It’s possible,” said Zhu.
She believes more evidence is needed on how private equity affects practice patterns.
Policy makers are watching these trends.
For example, in Oregon, legislators are advocating for proposed mergers, acquisitions, and other businesses to ensure the state’s goals for health care equity, reduced consumer costs, increased access, and better care are met. Established a healthcare market surveillance program to consider transactions.
A recent estimate by the same research team found that about 5% of doctors are currently employed by private equity-owned clinics. Researchers cite quality of care and patient satisfaction as important areas for future research as this trend continues.
“Private ownership of physician practices adds a distinctly private and market-driven impact to the wider trend of physician consolidation by health care systems and insurance companies,” they concluded. “This study contributes evidence of potential overuse and higher healthcare costs that will be important for policy makers to monitor.”
In addition to Zhu, co-authors include: Yashaswini Singh, MPAWhen Dr. Daniel Polsky, MPP, Johns Hopkins University. When, Zirui Song, MD, Ph.D.When Dr. Joseph D. BruchHarvard Medical School.
This work was supported by the National Institute for Healthcare Management Foundation and the NIH Director’s Early Independence Award, DPS-ODO24564. The content is solely the responsibility of the authors and does not necessarily represent the official views of the National Institutes of Health.