Reports from the American Medical Association, and from UC Berkeley researchers in collaboration with the nonprofit American Antitrust Institute and the Washington Center for Equitable Growth, find that the ongoing decline of independent physician practices, and the increasing private equity ownership of medical practices, are central in skyrocketing patient costs, and in difficulty of access to effective healthcare.
The collaborative report
provides "convincing evidence that incentives to put profits before patients have grown stronger with an increase in private equity ownership of physician practices," said lead author Richard Scheffler, PhD, of UC Berkeley in a statement.
The report also noted that private equity acquisitions of physician groups have risen sixfold in just a decade, increasing from 75 deals in 2012 to 484 deals in 2021….
[emphasis added]
The AMA report found private practices decreased by 13 percentage points —46.7%, down from 60.1%— 2012 to 2020. The the percentage of physicians working in private equity-owned groups remained unchanged, leaving the question of where physicians gone from private practice ‘went’ …
…among factors that may be driving physicians out of independent practice: ■ Medicare reimbursement that may not be keeping pace with rising inflation … except by fraud [dklink]•[dklink] large medical companies and insurances can perpetrate that strangle CMS finances for small ones ■ Medicare Advantage scams [dklink]• wooing patients away with attractive benefits (that may or may not ever materialize once the patients are locked in) ■ CMS paying higher fees for services performed in hospital-affiliated practices than for the same services performed in independent practices ■ the multi-decades domino collapse of small hospitals with whom small physician practices would otherwise partner, etc…. |
...but their absence represents a growing loss to Americans of healthcare providers insufficient to population size.
Unfortunately, federal and state agencies generally have not tracked acquisitions of medical practices, even though some government functions do involve oversight [no pun intended] concerns:
The US Senate Finance Committee, which oversees most federal health spending, held a June hearing examining the causes and consequences of <big>increased corporate ownership in healthcare</big>, including a look at physician practices.
<big>"It's increasingly clear that consolidation in healthcare is not lowering costs or increasing the quality of Americans' healthcare," </big> Senate Finance Chairman Ron Wyden (D-OR) told Medscape via email. "For private equity in healthcare in particular, there needs to be more transparency around ownership so the effect on these business relationships can be better understood."…
[emphasis added]
In the field of finance, private equity (PE) is an investment fund, usually a limited partnership, which invests in and restructures private companies. A private-equity fund is both a type of ownership of assets (financial equity) and is a class of assets (debt securities and equity securities), which function as modes of financial management for operating private companies that are not publicly traded in a stock exchange...
<small>SOURCES and FURTHER READING:</small>:
- Medscape Rising Patient Costs Tied to Private Equity Ownership
- RetireGuide.com 49+ US Medical Bankruptcy Statistics for 2023: “Medical bills are the most common reason for bankruptcies in the U.S….”
- as early as 2015 WSJ The ObamaCare Effect: Hospital Monopolies —Last year saw 95 hospital mergers and acquisitions, a frenzy encouraged by the Affordable Care Act. — h/t kosak MissKT
- PublicSeminar-TheNewSchool The National, Bipartisan Loathing of Hospital Monopolies: State legislators of all political leanings are fed up — Feb 16, 2023 — h/t kosak MissKT
- sample: Bain & Company Healthcare Private Equity Outlook: 2023 and Beyond: Investors will get creative to get deals done.
- sample: hcpea."ORG"
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Document Library dealtrackers...
Additional links on the diary’s and related issues are welcome in the comments.