Private Equity Acquisitions Research Articles

Abstract 4138609: Patient Care Experience Worsens After Private Equity Acquisition of US Hospitals: Implications for Cardiovascular Outcomes

Background: Patient care experience is strongly associated with outcomes among individuals with cardiovascular disease. There is growing concern that the recent and precipitous rise in private equity acquisitions of US hospitals may worsen patient-centered care, and ultimately, cardiovascular outcomes. However, little is known about how private equity acquisitions of hospitals impact patient care experience. Research Question: To evaluate whether the acquisition of US hospitals by private equity firms was associated with changes in measures of patient-reported experience compared with matched control hospitals (not acquired by private equity) between 2007-2019. Methods: This cohort study identified 74 US acute care hospitals newly acquired by private equity firms and 298 matched control (non-acquired) hospitals from 2007 to 2019. CMS Hospital Compare files were used to obtain patient experience measure scores for each hospital from Hospital Consumer Assessment of Healthcare Providers and Systems (HCAPHS) survey results. A quasi-experimental difference-in-differences design was used to evaluate changes in patient experience measures at private-equity acquired hospitals compared with matched control hospitals 3 years before vs 3 years after acquisition. Results: The percentage of patients rating hospitals as a 9 or 10 out of 10 at private equity acquired hospitals and control hospitals is shown in the Figure. There was a differential decrease in patient ratings (of 9 or 10 out of 10) at hospitals acquired by private equity firms compared with control hospitals (-2.4 percentage points [95% CI -3.9, -0.9]). A similar trend was seen in the percentage of patients that would definitely recommend the hospital, with a differential decrease at private equity-acquired hospitals relative to control hospitals (-2.2 percentage points [95% CI -3.6, -0.7]). For both measures, the relative decrease in patient care experience at private equity hospitals compared with control hospitals steadily grew with each subsequent year after acquisition. Conclusion: In this national study, patient-reported care experience worsened after private equity acquisition of US hospitals, which has important implications for cardiovascular care and outcomes.

The sectoral consequences of private equity acquisitions: Spillovers in wages and employment

The sectoral consequences of private equity acquisitions: Spillovers in wages and employment

Assessing Private Equity Involvement in Ophthalmology: Parallels with the Past, Concerns for the Future

PurposeTo discuss the history and current state of private equity in ophthalmology and explore potential implications for ophthalmology practices, physicians, and patients. DesignPerspective. MethodsReview of selected articles in ophthalmology and non-ophthalmology medical literature and commentary based on the authors’ experiences. ResultsInvestment in ophthalmology appeals to private equity firms because of high procedural volumes, fragmented private practices, opportunities for real estate ownership, and an aging population in need of eye care. As a result, acquisition of private practices by large private equity companies has swelled since 2015. Metropolitan areas and practices that possess ambulatory surgical centers or a high proportion of retina surgeons receive the greatest investment. However, little objective data exists regarding the benefits of this trend. Initial research suggests that private equity ownership may negatively impact patient care through greater costs, shorter appointments, and fewer Medicare/Medicaid patients seen. Skeptics of private equity also highlight concerns that include financial risk falling primarily on the acquired practice itself, a short-term business approach that rewards profit maximization, and the erosion of physician autonomy. Furthermore, young ophthalmologists express reservations about working for private equity firms. 78% of trainees indicated they would not consider employment by a private equity owned practice and 81.4% of vitreoretinal fellows voiced concerns about autonomy and job security. Proposed legislation aimed at limiting private equity acquisitions is currently under review at the statewide level, adding additional uncertainty to the future of private equity involvement in ophthalmology. ConclusionAlthough investment by private equity offers potential financial rewards and operational improvements for practices, it also raises significant concerns reminiscent of those experienced by physician practice management companies in the 1990s. Nonanecdotal data is needed to assess the benefits and future of private equity involvement in ophthalmology.

Private Equity Acquisition of Physician Practices—Looking for Ethical Guidance From Professional Societies

Private Equity Acquisition of Physician Practices—Looking for Ethical Guidance From Professional Societies

Private Equity Acquisitions Of Hospices Are Increasing; Ownership Remains Opaque.

Private equity ownership across the US health care system is rapidly increasing, yet ownership structures are complex and opaque. We used an economic data set tracking mergers and acquisitions linked to Medicare data to identify private equity hospice acquisitions. Given the influence of for-profit ownership on hospice quality, transparent data on private equity investment are fundamental to ensuring high-quality end-of-life care.

Hospital Assets Before and After Private Equity Acquisition

This study assesses changes in hospitals’ capital assets after private equity acquisition.

Private Equity Acquisitions of Outpatient Cardiology Practices in the United States, 2013-2023

Private Equity Acquisitions of Outpatient Cardiology Practices in the United States, 2013-2023

Protecting Patients And Society In An Era Of Private Equity Provider Ownership: Challenges And Opportunities For Policy.

Private equity (PE) acquisitions in health care delivery nearly tripled from 2010 to 2020. Despite concerns around clinical and economic implications, policy responses have remained limited. We discuss the US policy landscape around PE ownership, using policies in the European Union for comparison. We present four domains in which policy can be strengthened. First, to improve oversight of acquisitions, policy makers should lower reporting thresholds, review sequential acquisitions that together affect market power, automate reviews with potential denials based on market concentration effects, consider new regulatory mechanisms such as attorney general veto, and increase funding for this work. Second, policy makers should increase the longer-run transparency of PE ownership, including the health care prices garnered by acquired entities. Third, policy makers should protect patients and providers by establishing minimum staffing ratios, spending floors for direct patient care, and limits on layoffs and the sale of real estate after acquisition (forms of "asset stripping"). Finally, policy makers should mitigate risky financial behavior by limiting the amount or proportion of debt used to finance PE acquisitions in health care.

Private equity investment in health care delivery, Australia, 2008-2022.

To examine the scale of private equity investment in Australian health care delivery assets (clinics, hospitals, imaging facilities, other doctor-led health care services). Extraction of information about private equity acquisitions of hospitals, clinics, imaging centres and invitro fertilisation facilities in Australia, 2008-2022, from a commercial database (PitchBook), supplemented by information from publicly available online media sources. Number and value of private equity acquisitions of health care assets, 2008-2022; numbers of clinic parent company and clinic acquisitions, 2017-2022. A total of 75 private equity acquisitions of health care delivery assets in Australia during 2008-2022 were identified; the annual number rose from three acquisitions in 2008 to eighteen in 2022. During 2008-2010, five of seven acquisitions were of invitro fertilisation providers; during 2020-2022, 22 of 39 acquisitions were of clinics or clinic groups, including eleven of eighteen in 2022. The total value of the 39 acquisitions for which purchase price could be ascertained (52%) was $24.1 billion. During 2017-2022, the clinic specialty with the greatest number of private equity acquisitions was general practice (256 of 446 clinics purchased within acquisitions). Seven companies owning ophthalmology clinics (24 clinics) were acquired by private equity. Four private equity acquisitions during 2017-2022 included 60 oncology clinics, all related to a single clinic group. The number of private equity acquisitions of Australian health care delivery assets increased during 2008-2022. Doctors should be aware of the motivations and dynamics of private equity companies, as they are increasingly likely to interact with these firms and assets owned by these firms.

Study Reveals Alarming Impact of Private Equity Acquisitions on Hospital Patient Care

Study Reveals Alarming Impact of Private Equity Acquisitions on Hospital Patient Care

AOA Critical Issues Symposium: The Dynamic Environment of Health Care.

The dynamic health-care environment continues to undergo disruptive change. As the health-care system emerges from the pandemic, underlying issues have progressively become critical. Private equity acquisition is dramatically increasing, and consolidation in the entire health-care system limits choice and access. Challenges in the workforce and supply chain persist, adding pressure on already strained health-care organizations. Innovative solutions are required to provide equitable value-based access to orthopaedic care.

The Looming Future of Private Equity in Plastic Surgery.

Private equity acquisition of independent private practices has grown dramatically in the last decade, with private equity firms increasingly investing in surgical specialties that practice in outpatient ambulatory centers. This trend has slowly started to creep into plastic surgery; therefore, understanding the concepts of private equity ownership in healthcare and its benefits and risks is critical. This article provides a fundamental economic background on private equity, describes its current state in healthcare, including trends in plastic surgery, and provides recommendations for plastic surgeons considering private equity acquisition.

The immediate effects of private equity acquisition of urology practices on the management of newly diagnosed prostate cancer.

Some worry that physician practices acquired by private equity may increase the use of services to maximize revenue. We assessed the effects of private equity acquisition on spending, use of treatment, and diagnostic testing in men with prostate cancer. We used a 20% sample of national Medicare claims to perform a retrospective cohort study of men with prostate cancer diagnosed from 2014 through 2019. The primary outcome was prostate cancer spending in the first 12 months after diagnosis. Secondary outcomes included the use of treatment and a composite measure of diagnostic testing (e.g., imaging, genomics) in the first 12 months after diagnosis. Multilevel modeling was used to adjust for differences in patient and market characteristics. The effect of practice acquisition on each outcome was assessed using a difference-in-differences design. There were 409 and 4021 men with prostate cancer managed by urologists in acquired and nonacquired practices, respectively. After acquisition, prostate cancer spending was comparable between acquired and nonacquired practices (difference-in-differences estimate $1182, p = 0.36). Acquisition did not affect the use of treatment (difference-in-differences estimate 3.7%, p = 0.30) or the use of diagnostic testing in men who were treated (difference-in-differences -5.5%, p = 0.12) and those managed conservatively (difference-in-differences -2.0%, p = 0.82). In the year following acquisition of urology practices, private equity did not increase prostate cancer spending, the use of treatment or diagnostic testing in men with prostate cancer. Future work should evaluate the effects of private equity acquisition on practice patterns and quality over a longer time horizon.

Acquisition of Urology Practices by Private Equity Firms and Performance in the Merit-based Incentive Payment System.

Private equity is increasingly engaged in the acquisition of urology practices. The implications of strategies to enhance practice value deployed by these firms for patients are unclear. We conducted a retrospective study of urologist performance in the MIPS (Merit-based Incentive Payment System) program for 2017 to 2020 using national Medicare data from the Quality Payment Program file. The primary outcome was the overall MIPS score. Secondary outcomes included MIPS component scores (ie, quality, interoperability, improvement activities, cost) and the percentage of urologists receiving a bonus payment. Generalized estimating equations were used to estimate the relationship between private equity acquisition and outcomes using a difference-in-differences framework. Between 2017 and 2020, 181 urologists were in a urology practice acquired by private equity with MIPS data available the year before and after acquisition. Compared to urologists in practices not acquired by private equity, those in acquired practices had worse overall MIPS performance after acquisition (difference-in-differences estimate, -14 points, P = .04). The decrease in the overall score was driven by worse performance in the quality score (difference-in-differences estimate, -28 points, P < .001). Finally, acquisition resulted in a decrease in the percentage of urologists receiving bonus payments (difference-in-differences estimate, -43%, P < .001). Private equity acquisition of urology practices was associated with significantly lower MIPS performance. As private equity acquisition of urology practices becomes more prevalent, key stakeholders should ensure that the quality of patient care is maintained and that the involvement of for-profit entities in health care is being made transparent to patients.

Private equity investment in Germany's primary care sector

Abstract Background A major reform of the primary care sector in Germany that included a new law on health system financing in 2004 introduced new tools to be used by “entrepreneurial doctors”. These new tools provided opportunities for corporate investments into primary care, including through private equity funds (PEFs). Since then, there has been a stark increase of private investments. Methods A review of academic and grey literature, media reports and relevant organizational websites. Results Investments by PEFs in Ambulatory Health Care Centres (in German: Medizinische Versorgungszentren, MVZs) have increased continuously in recent years, and latest estimates suggest that in 2020 about 750 of overall 3800 MVZs were owned by PEFs. However, exact and robust data on how many MVZs are owned by PEFs do not exist, as there are no (legal) requirements for disclosures of these investment and ownership structures in Germany. Often, investors are located in tax havens, making the identification of ownership difficult. In addition, a PEF investing into an MVZ may include one health care facility, several dozens or over 100, depending on how well developed the network is (sometimes including long-term care facilities), further complicating an understanding of ownership status. The public debate on private equity investments in Germany's health system has been intensifying in recent years and a number of concerns have been raised, leading to calls by medical chambers for stricter regulation. Federal Minister of Health, Karl Lauterbach, announced in late 2022 that a law prohibiting private equity acquisitions of MVZs would be forthcoming in 2023. Conclusions The involvement of PEFs in Germany's ambulatory health care centres has increased substantially in recent years, leading to increasing public concerns and calls for stricter regulation.

An update on private equity acquisitions in dermatology, 2013 to 2022

An update on private equity acquisitions in dermatology, 2013 to 2022

Private Equity and Radiology: Productive Partnership or Inherently Misaligned?

Private equity acquisition of medical groups and health care organizations is becoming increasingly important in medicine and is a trend that is likely to continue for the foreseeable future. Some question the ethical implications of private equity acquisitions, since the clear goal of such organizations is maximizing profitability, which may or may not be in the best interests of either the patient population or the provider group. This article will describe the role of private equity in the medical marketplace, with a focus on the role of private equity in radiology and interventional radiology specifically. Additionally, this article will explore this growing trend in the radiology marketplace and its anticipated effects upon patient care and professional satisfaction for radiologists.

Increases in Medicare Spending and Use after Private Equity Acquisition of Retina Practices

Private equity (PE) firms increasingly are acquiring physician practices in the United States, particularly within procedural-based specialties such as ophthalmology including retina. To date, the potential impact of ophthalmology practice acquisitions remains unknown. We evaluated the association between PE acquisition and Medicare spending and use for common retina services. Retrospective difference-in-differences analysis using the 20% Medicare fee-for-service claims dataset from January 1, 2015, through December 31,2019. Eighty-two practices acquired by PE during the study period and matched control practices. We used novel data on PE acquisitions of retina practices linked to the 20% sample Medicare claims data. Retina practices acquired by PE between 2016 and 2019 were matched to up to 3 non-PE (control) practices based on characteristics before acquisition. Private equity-acquired practices were compared with matched control practices through 6 quarters after acquisition using a difference-in-differences event study design. Data analyses were performed between August 2022 and April2023. Medicare spending and use of common retina services. Relative to control practices, PE-acquired retina practices increased the use of higher-priced anti-vascular endothelial growth factor (VEGF) agents including aflibercept, which differentially increased by 6.5 injections (95% confidence interval, 0.4-12.5; P= 0.03) per practice-quarter, or 22% from baseline. As a result, Medicare spending on aflibercept differentially increased by $13 028 per practice-quarter, or 21%. No statistically significant differences were found in use or spending for evaluation and management visits or diagnostic imaging. Private equity acquisition of retina practices are associated with modest increases in the use of higher-priced anti-VEGF drugs like aflibercept, leading to higher Medicare spending. This finding highlights the need to monitor the influence of PE firms' financial incentives over clinician decision-making and the appropriateness of care, which could be swayed by strong economic incentives. Proprietary or commercial disclosure may be found in the Footnotes and Disclosures at the end of this article.

Commercial determinants of human rights: for-profit health care and housing.

Commercial determinants of human rights: for-profit health care and housing.

Private Equity Acquisition of Oncology Clinics in the US From 2003 to 2022

This cross-sectional study examines private equity–backed acquisitions of medical and radiation oncology clinics in the US from 2003 to 2022 using financial databases and publicly available data.