08 Sep Private Equity and Health Care: More Patients, More Charges

MedicalResearch.com Interview with:

Dr. Zhu

Jane M. Zhu, M.D., M.P.P., M.S.H.P.
Assistant Professor of Medicine
Division of General Internal Medicine and Geriatrics
School of Medicine
Oregon Health & Science University
Portland, Oregon

MedicalResearch.com: What is the background for this study?

Response: Private equity (PE) acquisitions of physician practices are accelerating across many specialties, but there is still little robust evidence on the effects of these acquisitions. Concerns about PE involvement is predicated on the fact that these firms expect high annual returns, which require either reducing costs or increasing revenue, or both. Using PE acquisition data from 2016-2020, linked to commercial claims data, we sought to understand what common mechanisms of revenue generation were being adopted after private equity acquisition of physician practices.

MedicalResearch.com: What are the main findings?

Response:  We found that across three procedural, office-based specialties – dermatology, GI, and ophthalmology– Private equity acquisition was associated with increased allowed amounts and charges, increased volumes of patients, and evidence of increased coding intensity.

MedicalResearch.com: What should readers take away from your report?

Response: The U.S. health care system is experiencing growing corporatization; Private equity is but one actor in this context. However, our analysis suggests that PE’s focus on maximizing investor returns appears to be associated with changes in practice patterns and increases in health care spending, with yet unknown consequences on quality of care and patient outcomes.

MedicalResearch.com: What recommendations do you have for future research as a results of this study?

Response: There is a critical and urgent need for more understanding of how private equity and other corporate acquisitions of health care entities affects access, quality, and health outcomes of care.

Citation:

Singh Y, Song Z, Polsky D, Bruch JD, Zhu JM. Association of Private Equity Acquisition of Physician Practices With Changes in Health Care Spending and Utilization. JAMA Health Forum. 2022;3(9):e222886. doi:10.1001/jamahealthforum.2022.2886

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Last Updated on September 8, 2022 by Marie Benz MD FAAD