Private Equity Acquisition of Physician Practices

Casalino, Lawrence P.; Saiani, Rayhan; Bhidya, Sami; Khullar, Dhruv; O’Donnell, Eloise

doi:10.7326/l19-0256

Cited by 24 publications

(20 citation statements)

References 6 publications

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“…Private equity firms seek high annual returns of 20% or more. 16 The pressure to generate high short-term profits could lead to PE firm–owned nursing homes reducing staffing, services, supplies, or equipment, which may have an adverse association with quality of care, 3 , 17 whereas non-PE for-profit nursing homes may have business strategies with longer time horizons. Nursing homes purchased by PE firms may be responsible for the debt used by the PE firm as part of a leveraged buyout to acquire the facilities, thereby reducing their financial resources.…”

Section: Introductionmentioning

confidence: 99%

Association of Private Equity Investment in US Nursing Homes With the Quality and Cost of Care for Long-Stay Residents

et al. 2021

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Key Points Question Is private equity acquisition of nursing homes associated with the quality or cost of care for long-stay nursing home residents? Findings In this cohort study with difference-in-differences analysis of 9864 US nursing homes, including 9632 residents in 302 nursing homes acquired by private equity firms and 249 771 residents in 9562 other for-profit nursing homes without private equity ownership, private equity acquisition of nursing homes was associated with higher costs and increases in emergency department visits and hospitalizations for ambulatory sensitive conditions. Meaning This study suggests that more stringent oversight and reporting on private equity ownership of nursing homes may be warranted.

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Section: Introductionmentioning

confidence: 99%

Association of Private Equity Investment in US Nursing Homes With the Quality and Cost of Care for Long-Stay Residents

et al. 2021

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“…However, available data are limited to single specialties or come from industry reports or opinion articles. A dearth of evidence and the use of nondisclosure agreements at early stages of negotiation have constrained the ability to evaluate this phenomenon empirically . In this study, we describe physician group practices acquired in 2013-2016 across specialties.…”

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confidence: 99%

Private Equity Acquisitions of Physician Medical Groups Across Specialties, 2013-2016

Zhu

Hua

Polsky

2020

JAMA

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Acquisition of physician practices by private equity firms has accelerated, 1,2 with unknown implications for care delivery and patient outcomes. However, available data are limited to single specialties or come from industry reports or opinion articles. A dearth of evidence and the use of nondisclosure agreements at early stages of negotiation have constrained the ability to evaluate this phenomenon empirically. 3 In this study, we describe physician group practices acquired in 2013-2016 across specialties. Methods | We identified US physician group practice acquisitions by private equity firms using the Irving Levin Associates Health Care M&A data set, 4 which includes manually collected and verified transactional information on a broad set of health care mergers and acquisitions. We excluded practices bought by entities not classified as private equity firms at the time of acquisition. We verified practice names, locations, specialties, and group practice status via Google searches. We linked acquisitions to the SK&A data set, a commercial data set of verified physician-and practice-level characteristics (eg, specialty, credentials, practice ownership, size, and locations) for US office-based practices. Transactions Key limitations include that the data are based on publicly announced transactions and therefore underestimate total acquisitions, particularly of smaller practices, and that available data lag behind the rapid pace of private equity acquisitions.

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“…Next, ophthalmologists may view PE as an opportunity for portfolio diversification, similar to the perception seen in dermatology [2,24]. Lastly, ophthalmologists have evaluated PE investments to experience stable growth in the past few years, perhaps due to the shortage in provider supply [23,25]. Overall, many strategies are employed by PE firms that can lead to benefits for practices, clinicians, and patients.…”

Section: Key Pointsmentioning

confidence: 99%

Contractual considerations in the private equity era

Patel

Nijm

2022

Current Opinion in Ophthalmology

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Private equity (PE) has grown rapidly in medicine. The reintroduction of PE in ophthalmology has necessitated a greater understanding of the potential contractual relationships with PE firms from both a practice owner and an employee physician perspective. There are contractual obligations that need to be met as PE agreements are designed to ensure clear investment patterns and abide by legal mandates. A practice owner entering into a PE contract needs to consider how the practice is being valued, what their obligations are to the PE entity after the sale has been completed to attain full compensation and understand their new role at the practice. On the other hand, employee ophthalmologists must carefully evaluate the compensation package being offered in terms of the type of equity, vesting of shares, obligations to the PE firm under the agreement such as a noncompete clause, and what occurs under a subsequent sale of the practice. Overall, contractual considerations in the private equity era need to be carefully evaluated in order to ensure the agreement is in the best interest for the clinician, practice, and their patients.

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Private Equity Acquisition of Physician Practices

Cited by 24 publications

References 6 publications

Association of Private Equity Investment in US Nursing Homes With the Quality and Cost of Care for Long-Stay Residents

Association of Private Equity Investment in US Nursing Homes With the Quality and Cost of Care for Long-Stay Residents

Private Equity Acquisitions of Physician Medical Groups Across Specialties, 2013-2016

Contractual considerations in the private equity era

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