19 Feb Private Equity Firms Increasingly Target Specialty Medical Groups for Investment
MedicalResearch.com Interview with:
Jane M. Zhu, MD, MPP, MSHP
Assistant Professor of Medicine
Division of General Internal Medicine
Oregon Health and Sciences University
Penn LDI Adjunct Senior Fellow
MedicalResearch.com: What is the background for this study?
Response: In recent years, private equity firms have been rapidly entering the health care sector, including by purchasing physician medical groups. There’s a lot of interest in this trend but very little empirical research to understand its scope, characteristics, and effects.
MedicalResearch.com: What are the main findings?
Response: We found that private equity acquisitions of physician medical groups are accelerating across multiple specialties over time. From 2013-2016, these acquisitions were most commonly found in anesthesiology, multi-specialty clinics, emergency medicine, family practice, and dermatology. Moreover, acquired medical groups seem to have relatively large footprints with multiple office sites and many physicians, consistent with a typical private equity investment strategy.
MedicalResearch.com: What should readers take away from your report?
Response: Who owns what in the healthcare sector has potential implications for providers and patients alike. This study highlights a trend that is occurring with greater frequency in the health care industry, as private equity firms increasingly target medical groups for investment opportunities.
This type of ownership information is not readily apparent and often not transparent when patients go to their doctors’ offices, but understanding the scope of such investments, and more broadly speaking, the role of profit in health care, is important for the public.
MedicalResearch.com: What recommendations do you have for future research as a result of this work?
Response: We need more research to understand how these purchases affect practice patterns and delivery of care. Private equity investment may lead to many practice efficiencies, but because of an emphasis on high returns on investment in the short run, one concern is that practice stability and patient care may be impacted in the longer-run. Research in this area has thus far been hindered by a number of factors, included limited data availability and the fact that these acquisitions have been quite recent, but we need longitudinal and robust data to evaluate these effects.
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