As private equity becomes increasingly involved in the health care industry, an alarming trend has emerged: private equity-owned medical practices are prioritizing their own financial benefit over delivering high-quality care that patients can afford.
A recent study published in JAMA Health Forum found that compared to other practices, private equity-backed practices had longer patient wait times, more patient visits, and charged higher costs overtime.
The No Surprises Act remains essential for stopping price-gouging by private equity-backed providers. As the implementation of the No Surprises Act continues, additional regulations and guidance must be developed to ensure the legislation serves its intended purpose.
Politico Pro published a recent article summarizing the study. Read the full article below:
Private equity-owned practices saw higher prices, more visits than counterparts, study says
By Daniel Payne
Medical practices purchased by private equity often charged more and saw more patients more often compared to practices not acquired by private equity, according to a new study published Friday.
Compared with other practices, private equity-controlled practices charged an average of 20 percent more per claim and increased the amount per claim allowed by payers like insurance by 11 percent in the months after acquisition, the study said.
The authors — from Johns Hopkins University, Harvard University and Oregon Health & Science University — compared nearly 600 private equity-controlled practices with almost 2,900 other ones, focusing on those that specialized in dermatology, gastroenterology and ophthalmology. Though there were no significant changes in patient risk reported, more visits and higher prices followed acquisitions, on average, the study found.
Private equity-acquired practices saw about 26 percent more unique patients compared to the control group.
Existing patient visits longer than 30 minutes increased about 9 percent, part of the 16 percent increase in appointments.
There was some variation among specialties in the report. The prices insurance paid per claim in dermatology practices were unaffected post-acquisition, though they increased in gastroenterology and ophthalmology offices.
Still, private equity purchases were “associated with increases in health care spending and several measures of utilization, and some evidence of greater intensity of care.”
The acquired practices remained consistent with other practices in these metrics before being purchased by private equity, the study said. In the two years after being purchased, though, there were statistically significant differences.
But those differences didn’t include patient risk, which was not significantly changed in the eight quarters after acquisition, according to the study. There were “modest differences” in selected outcomes within specialties.
The research comes amid more policymaker interest around private equity’s increased investment in health care in recent years.
“This study contributes evidence for potential overutilization and higher spending of care that will be important for policy makers to monitor,” the authors wrote. “Other consequences of private equity acquisitions, including quality of care, patient satisfaction, and the physician practice experience, remain key areas for future research.”