Private Equity Investments In Health Care: An Overview Of Hospital And Health System Leveraged Buyouts, 2003–17

Cerullo, Marcelo; Bindal, Mohini; Rauh-Hain, Jose Alejandro; Ho, Vivian

doi:10.1377/hlthaff.2020.01535

Cited by 51 publications

(67 citation statements)

References 22 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%

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%

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

et al. 2022

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“…Proponents of PE acquisition often assert that revenue generation from target hospitals via taxation is a societal boon, while the patients they serve may benefit from economies of scale, management expertise, and an incentive to implement cost-effective care. 5 , 7 , 29 , 30 , 31 Critics assert that PE firms, unlike other for-profit institutions, have an inherent incentive to favor short-term returns rather than long-term investments (eg, information technologies and care redesign) that would otherwise meaningfully improve population health. 29 , 32 In certain aspects of health care services, the latter view has been bolstered by important research 13 , 14 , 33 , 34 in nursing homes and outpatient clinical practices.…”

Section: Discussionmentioning

confidence: 99%

“…Hospitals acquired by PE firms via primary or add-on leveraged buyout between 2003 and 2015 were identified using previously described methods. 5 These hospitals were linked to financial data reported on Healthcare Cost Report Information System–Medicare Cost Reports and geographic location information (eg, physical address) contained in the Medicare provider of services files to determine patient county of origin, hospital service area (HSA), and hospital referral region. All non–federally owned hospitals with noncritical access that were not acquired by PE firms during this period were considered potential controls.…”

Section: Methodsmentioning

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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“…Operational features reflecting financial performance (total revenues, operating and total margins) and stated mission (for-profit status, teaching status), were also extracted. 23 Operating margins were defined as the net revenues from patient care and other operations, minus total operating expenses, divided by net revenues.…”

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 Investments In Health Care: An Overview Of Hospital And Health System Leveraged Buyouts, 2003–17

Cited by 51 publications

References 22 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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