Workforce Composition In Private Equity–Acquired Versus Non–Private Equity–Acquired Physician Practices

A Policy Framework for the Growing Influence of Private Equity in Health Care Delivery

“…First, private equity firms operate on a shorter timeline, often acquiring and selling a clinical entity within approximately 5 to 10 years. This emphasis on rapid returns on investment is thought to be consistent with the finding that private equity firms increase prices, increase volume, shift to higher-margin services, and reduce labor costs, including physician staff shortly after acquisition . Firms may acquire multiple clinical organizations in a region to increase market power, which boosts commercial prices and increases their valuation.…”

“…This emphasis on rapid returns on investment is thought to be consistent with the finding that private equity firms increase prices, increase volume, shift to higher-margin services, and reduce labor costs, including physician staff shortly after acquisition. [1][2][3][4] Firms may acquire multiple clinical organizations in a region to increase market power, which boosts commercial prices and increases their valuation. Among 578 physician practices acquired by private equity firms between 2016 and 2020, prices increased by 11%, and volume increased by 16% after acquisition.…”

Private Equity Purchases of Retina Practices: Their Focus on Profit Is a Threat to Healthcare

“…A 2023 study in Health Affairs comparing 223 PE-owned practices and 995 matched non-PE practices showed increased physician turnover in PE-owned practices. 3 A major potential risk to the house of cards that represents PE buyouts of medical practice is an initiative by the Federal Trade Commission announced on January 5, 2023, to eliminate all non-compete clauses. This initiative is currently accepting public comments but is strongly supported by the Biden administration.…”

Private equity in ophthalmology: taking the long view

“…Placing the evidence about private equity's effects within this context suggests profit-driving consistent with what has been observed with other consolidated entities. A robust body of work – across different sectors of healthcare – suggests that private equity ownership is associated with higher spending and utilization of care [17 ▪▪ ,18,19 ▪ ,20 ▪▪ ]; changes in payer mix towards commercially insured populations; and reductions in staffing [21 ▪ ,22], without definitive improvement – and often with reductions – in the quality of care provided [20 ▪▪ ,23]. An analysis of private equity acquired dermatology practices found 5–17% increases in commercially insured patient volume per dermatologist, and 3–5% increases in prices for routine medical visits, without statistically significant changes in spending or utilization of specific procedures [18].…”