Private Equity Acquisition And Responsiveness To Service-Line Profitability At Short-Term Acute Care Hospitals

Cerullo, Marcelo; Yang, Kelly Kaili; Roberts, James W.; McDevitt, Ryan C.

doi:10.1377/hlthaff.2021.00541

Cited by 17 publications

(22 citation statements)

References 27 publications

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“…Although the amount of rigorous evidence on how private equity acquisition affects physician practices is growing, it remains limited. Despite the rapid rise of private equity acquisition of nursing homes, [4][5][6][7] hospital systems, [8][9][10][11] and physician practices, 1,4 little empirical evidence is available on how private equity influences utilization, spending, and other practice patterns among physicians. Private equity investment in nursing homes has been associated with an increase in short-term mortality and changes to staffing.…”

Section: Introductionmentioning

confidence: 99%

“…6,7 Early research has found hospital acquisitions to be associated with a small increase in charge-to-cost ratio and net income, 10 a higher likelihood of providing more profitable hospital-based services, and mixed effects on quality. 9,12 It is unclear whether these findings generalize to physician practices, which have different business structures, service lines, and management practices.…”

Section: Introductionmentioning

confidence: 99%

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Association of Private Equity Acquisition of Physician Practices With Changes in Health Care Spending and Utilization

et al. 2022

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IMPORTANCE Private equity acquisitions of physician practices in the US have been increasing rapidly; however, the implications for health care delivery and spending are unclear.OBJECTIVE To examine changes in prices and utilization associated with private equity acquisitions of physician practices across multiple specialties. DESIGN, SETTINGS, AND PARTICIPANTSThis was a difference-in-differences event study of US physician practices specialized in dermatology, gastroenterology, and ophthalmology that were acquired by private equity firms from 2016 to 2020. Within each specialty, each private equity−acquired (PE-acquired) practice was matched with as many as 5 control practices based on the preacquisition number of unique patients, encounters, risk score, share of services billed out-ofnetwork, and spending. The PE-acquired practices were compared with matched controls through year 2 after acquisition, using a difference-in-differences event study. Data analyses were performed from March 2021 to February 2022. EXPOSURES Private equity acquisition of physician practices.MAIN OUTCOMES AND MEASURES Measures of spending and utilization, including the charge and price (amount paid) per claim, new and unique patients, and total encounters. RESULTSCompared with the 2874 control practices, the 578 PE-acquired physician practices exhibited an average increase of $71 (+20.2%) charged per claim (95% CI, 13.

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Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Association of Private Equity Acquisition of Physician Practices With Changes in Health Care Spending and Utilization

et al. 2022

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“…Another explanation may be that all short-term ACHs, PE-acquired or not, are subject to the same regulatory oversight, accreditation, and quality reporting environment. 39 Although PE ownership has been associated with operational changes, 40 it is possible that extant regulatory tolerance for adverse outcomes prevents drastic cost-cutting measures that result in worse clinical care. At the same time, there may not be clear avenues for quality improvement in the 4 other medical conditions examined in the present study.…”

Section: Discussionmentioning

confidence: 99%

Association Between Hospital Private Equity Acquisition and Outcomes of Acute Medical Conditions Among Medicare Beneficiaries

et al. 2022

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Key Points Question What is the association between private equity (PE) acquisition of short-term acute care hospitals and measures of comorbidity, mortality, readmission, length of stay, and spending among Medicare beneficiaries admitted to the hospital with 1 of 5 acute medical conditions? Findings In this cross-sectional study of more than 21 million Medicare beneficiaries with 5 different acute medical conditions who were hospitalized at short-term acute care hospitals, PE acquisition was associated with significantly lower inpatient mortality (−1.1 percentage points) and lower 30-day mortality (−1.4 percentage points) among patients admitted with acute myocardial infarction. However, PE acquisition was not associated with significant differences in other dimensions of quality and spending or with differences across other medical conditions. Meaning The study’s findings suggest that PE acquisition has mixed consequences for patient-level outcomes overall but is associated with moderate and consistent improvement in mortality among Medicare beneficiaries hospitalized with acute myocardial infarction.

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“…21 These data are routinely leveraged by the Medicare Payment Advisory Committee (MedPAC) to inform policy recommendations around hospital operations and financial incentives. 22 HCRIS data were used to ascertain hospital capacity and occupancy (total staffed beds, acute inpatient days, total discharges, and Medicare volume as a proportion of total volume) and staffing (total employee full-time equivalents [FTEs]). Operational features reflecting financial performance (total revenues, operating and total margins) and stated mission (for-profit status, teaching status), were also extracted.…”

Section: Study Populationmentioning

confidence: 99%

“…24,25 Financial features were examined for outliers and/or skew, and winsorized or adjusted. 22 9 Facilities were geocoded using a publicly available online tool (https://www.geocod.io) to identify hospital referral region, census divisions, and census regions. Data were extracted on October 9, 2021, from the Turquoise Health research dataset.…”

Section: Study Populationmentioning

confidence: 99%

Association Between Cancer Center Accreditation and Compliance With Price Disclosure of Common Oncologic Surgical Procedures

Zhang

Cerullo

Esposito

et al. 2022

Journal of the National Comprehensive Cancer Network

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Background: Cancer center accreditation status is predicated on several factors that measure high-value healthcare. However, price transparency, which is critical in healthcare decisions, is not a quality measure included for accreditation. We reported the rates of price disclosure of surgical procedures for 5 cancers (breast, lung, cutaneous melanoma, colon, and prostate) among hospitals ranked by the American College of Surgeon’s Commission on Cancer (ACS-CoC). Methods: We identified nonfederal, adult, and noncritical access ACS-CoC accredited hospitals and used the commercial Turquoise Health database to perform a cross-sectional analysis of hospital price disclosures for 5 common oncologic procedures (mastectomy, lobectomy, wide local excision for cutaneous melanoma, partial colectomy, prostatectomy). Publicly available financial reporting data were used to compile facility-specific features, including bed size, teaching status, Centers for Medicare & Medicaid wage index, and patient revenues. Modified Poisson regression evaluated the association between price disclosure and ACS-CoC accreditation after adjusting for hospital financial performance. Results: Of 1,075 total ACS-CoC accredited hospitals, 544 (50.6%) did not disclose prices for any of the surgical procedures and only 313 (29.1%) hospitals reported prices for all 5 procedures. Of the 5 oncologic procedures, prostatectomy and lobectomy had the lowest price disclosure rates. Disclosing and nondisclosing hospitals significantly differed in ACS-CoC accreditation, ownership type, and teaching status. Hospitals that disclosed prices were more likely to receive Medicaid disproportionate share hospital payments, have lower average charge to cost ratios (4.53 vs 5.15; P<.001), and have lower net hospital margins (−2.03 vs 0.44; P=.005). After adjustment, a 1-point increase in markup was associated with a 4.8% (95% CI, 2.2%–7.4%; P<.001) higher likelihood of nondisclosure. Conclusions: More than half of the hospitals did not disclose prices for any of the 5 most common oncologic procedures despite ACS-CoC accreditation. It remains difficult to obtain price transparency for common oncologic procedures even at centers of excellence, signaling a discordance between quality measures visible to patients.

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Private Equity Acquisition And Responsiveness To Service-Line Profitability At Short-Term Acute Care Hospitals

Cited by 17 publications

References 27 publications

Association of Private Equity Acquisition of Physician Practices With Changes in Health Care Spending and Utilization

Association of Private Equity Acquisition of Physician Practices With Changes in Health Care Spending and Utilization

Association Between Hospital Private Equity Acquisition and Outcomes of Acute Medical Conditions Among Medicare Beneficiaries

Association Between Cancer Center Accreditation and Compliance With Price Disclosure of Common Oncologic Surgical Procedures

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