With regards to private equity investment in physician practices, variations exist across geographic regions and medical specialties, in accordance with research announced by the National Institute for HEALTHCARE Management (NIHCM) Foundation this week.
Of the six specialties reviewed, the proportion of physicians employed in private equity-acquired practices was highest in dermatology (7.5%) and gastroenterology (7.4%), and in the Northeast region (6.8%), reported Yashaswini Singh, MPA, of Bloomberg School of Public Health at Johns Hopkins University in Baltimore, and colleagues.
Other specialties that saw an increased percentage of physicians employed in private equity-acquired practices included urology (6.5%), ophthalmology (5.1%), obstetrics and gynecology (4.7%), and orthopedics (1.9%), the team noted in JAMA Health Forum.
While private equity penetration was highest in the Northeast, it had been lowest in the Midwest (3.8%). The states that had the best private equity penetration were Arizona (17.5%), NJ (13.6%), Maryland (13.1%), Connecticut (12.6%), and Florida (10.8%). Washington, D.C., had the best penetration of most areas, at 18.2%.
“These acquisitions don’t happen randomly,” Singh told MedPage Today.
Given that the original legwork is complete, and the study team can easily see where there’s concentrated private equity activity, there exists a new group of questions to comprehend, she said. Included in these are determining what regulatory and economic environments may facilitate such activity, along with the implications for healthcare spending and patient outcomes.
“Because some private equity acquisitions consolidate physician practices into larger organizations, geographic concentration of private equity penetration could be connected with reduced physician competition, that could result in increased prices,” the researchers wrote within their study.
The target is to identify unintended spillover ramifications of private equity acquisitions, Singh noted. If those are advantageous, such as for example large influxes of capital that improve technology, infrastructure, or patient wait times, then it could be desirable to incentivize policies that foster such acquisitions. Simultaneously, it is important to absorb any unwanted effects, such as for example diminished quality of care or usage of care.
Because of this cross-sectional study, the researchers examined 2019 data from the IQVIA OneKey database, which include physician and practice info on 9.7 million medical researchers. The info were compiled from the American Medical Association Physician Masterfile and proprietary data collection.
The 2019 data included 97,094 physicians over the six specialties, of whom 4.9% worked in private equity-acquired practices.
Private equity penetration was calculated at a healthcare facility referral region and state level because the estimated percentage of physicians practicing in the six specialties who belonged to private equity-acquired practices.
Among 200 hospital referral regions, a mean of 5.6% of physicians were in private equity-acquired practices.
The researchers acknowledged that the info might not have captured all private equity acquisitions, potentially underestimating the prevalence of physician practice penetration. Furthermore, usage of secondary data from OneKey can include sampling and measurement error.
Jennifer Henderson joined MedPage Today being an enterprise and investigative writer in Jan. 2021. She’s covered the healthcare industry in NYC, life sciences and the business enterprise of law, among the areas.
This work was supported by the National Institute for HEALTHCARE Management Foundation and a grant from the NIH, Office of the Director, NIH Director’s Early Independence Award.
Singh reported no conflicts of interest. Co-authors reported relationships with the National Institute for HEALTHCARE Management, the NIH, Extend Health, the National Institute on Aging, the Laura and John Arnold Foundation, the study Triangle Institute, Google Ventures, Value-Based Insurance Design Health, and the International Foundation of Employee Benefit Plans.