It is not just the overt capital infusion that has increased cost without improved care it is also the down stream effects of EMRs and how they played into promoting PE and consolidation. EMRs were not built for sharing health information and data. Their primary goal was billing/coding/cost. When hospital systems began seeing what physicians billed they saw a lucrative market to tap into, to own. By owning doctors they could maximize encounter billing and mandate the practice of internal churn where patients are run through a gauntlet of tests within the hospital’s own system. Along with stronger insurance contracts their negotiating positions strengthened and the cost of care continued to increase. The ACA is largely to blame for this.
Break up consolidation and limit PE and perhaps the cost will plateau, but its unlikely it will go down.
PE is omnipresent. On a regular basis, I learn that some huge company is owned by a PE firm. And of course, their tentacles have reached well beyond corporate America. Who could have imagined, for instance, that they would be targeting medical practices? PE has a rather checkered reputation, some of which is deserved. I find that a PE ownership model of a medical practice to be inherently problematic. The core missions of both entities collide. Can it work? While I think it is possible, these arrangements are riddled with conflicts that would be very difficult to manage. I think that if patients were fully knowledgeable about how PE ownership impacts their care, they would have deep concerns.
Bemoaning the entry of private equity into medicine is putting the cart before the horse. The worm in the apple was government intervention into the medical payment system. The subsequent descent into bureaucratization and corporatization was the inevitable result. This was predicted by a number of older physicians I spoke with when I entered medical practice 50+ years ago. They said that loss of autonomy would be a certain consequence. Opportunities to bilk the government would be an irresistible lure for charlatans and they would eventually take over. Indeed, it has evolved right along the lines they predicted.
Sorry, you're letting your politics obscure your view. Since the 1960s the medical system in the US has turned from healthcare of patients to enriching the ruling class. It was, at first , a slow shift. It's picked up great speed and is now barreling to self destruction. Governmental policies had very little to do with it except to offer a little public funding the rulers could capture. Loss of autonomy occurs when you work for a (crony-capitalist) employer. We used to be small businessmen. Now we're providers. The medicine we knew was glorious. You could help people and make a decent living. Now most of us wouldn't recommend it to our children.
I suspect there are more visits because patients are required to make separate appointments for every concern they have.
And some is fake. When I go for a blood test, fully covered by my insurance, my clinic lists it as an office visit (a 2 minute visit) and charges it as an office visit. The lab test is covered. The "visit" has a copay. There are 4 million people in my healthcare network. It adds up.
I don't think medicine, government or education should be considered businesses or have profit motives. Private equity seems to, by its nature, lead to conflicts between profit and the best possible care for the patients.
Dr Dixit doesn't get to a key point until the very end, autonomy. Autonomy is a key issue for human beings, including doctors. Sure , we lose some of it qhwn we go from solo physician to multi-doctor groups, but we still want to retain the right to do what we believe best for our patients.
The trouble with private equity is that despite all the talk of improving efficiency their bottom line - is the bottom line. Milton Friedman argued in the 70's that "the social responsibility of business is to increase its profits". INot to make the best product --as it was for many corporations in the 50's. For private equity, good medical care is not an end, it is a means to the end. And we know from the track record of priate equity, when they buy up an entity, they saddle it with debt, pay themselves handsome dividends, and raise the price, be it for mattresses, health care, or whatever.
Good luck Meehir, I wished we could just "turn back the clock" so to speak and and let the primary physician have the autonomy. People are getting sicker and sicker and to not give the physicians the time to be with the patient is the worst. Sure you may have more billing, see more patients, but what is the "benefit"????? Wellness visits in the elderly is a scam.
owned vs not VC owned but employed vs not employed
Hospitals and venture capitalists who employ (own) primary care practices view pcps as aggregators of populations and the almost sole objective is to increase capacity and throughput to the detriment of continuity and the doctor- patient relationship. It does not matter to them who sees the patient as long as they keep the patient enrolled and in- network
When I was in private practice ( until 2018 when I moved to Ca) I worked harder and made less money but had more energy, self- satisfaction, and sense of professionalism than when I became employed by a hospital system
Thank you for the great article. I hope that you consider primary care as we need people like you to carry on .
Agree with your point completely. Once physicians stop being the chief decision-makers and stop being "small business-owners," the practice and quality of medicine changes vastly. I know there are so many other factors as to why physicians have felt the pressure to consolidate (insurance negotiations, EMR costs, staffing, etc.), but I still hope there is room for the small business-owner type of physician to make a renaissance. Thanks for your comment–I definitely am keeping primary care towards the top of the list
Practice at a level that is good enough not to result in legal action that costs more money. And if you are motivated to practice at a higher level that fullfills your reason for entering the profession in the first place and allows you to sleep at night then that's on your dedicated self. The unfortunate global reality:(
Are we really engaging in a serious intellectual inquiry when asking the question “What effect will the entry of private equity have on primary healthcare delivery?” I think the answer is evident in what has happened to the U.S. economy writ large over the past 40 years. The shift from stakeholder to shareholder capitalism, concentrated market shares created by acquisitions and mergers, and the extractive strategies of private equity entities have led to an unprecedented shift of wealth and political power upward away from workers to a new American oligarchy that has hollowed out our middle class. And the process is magnified with every passing generation. “Milking more money from payers” is a given, but I cannot concede it is “not hurting anyone.”
I love that as a medical student you are aware of the issue of PE in medicine and thoughtfully looking into its effects on our healthcare system. We definitely need more of that in order to truthfully assess where we are and where we can improve. As a medical student 30 years ago I was not exposed to anything related to the business of medicine.
I think the biggest metric missed in this assessment is patient and physician satisfaction. It is not possible to give the kind of care patients deserve in a 10 minute visit. Since PE looks at medicine as a transaction meant to yield them a return on their investment, that isn’t their focus. That has become painfully obvious to both patients and physicians.
You can also just group PE and hospital-owned practices into the same group. The issue is the same at both. There is a bill in Congress right now being considered to limit PE from purchasing practices. At first glance that might seem like a good idea, however, that will just shift more practices into the hospital-owned category. Six of one, half dozen of the other (and a few bankruptcies away from a single payor, government run healthcare system. Ask a vet how well that system works at the VA). Still not fixing our broken system.
I have been in practice for 25 years in Family Medicine. This type of transactional focus on medicine has ruined our healthcare system. Physicians are unhappy and leave. Mid-levels move around from specialty to specialty to seek greener pastures (which exposes patients to lack of experience in care due to lack of training- a whole other issue). Due to lack of providers, patients are herded in and out of appointments like cattle so more can be squeezed into a day. This is leading to an unsustainable model.
Patients don’t care that you got them in and out of your office like you checked a box on your to do list. They want someone to listen to them and address them as a person not just one quick issue. That is something that isn’t being measured as a metric to whether PE is beneficial or not because it doesn’t generate money. In fact, that’s likely the part that would subtract from their profits.
I left my previous practice which went from a multi-specialty physician owned group to a PE owned group after 20+ years. I now own a Direct Primary Care Practice with another colleague and we couldn’t be happier. Our patients thank us every day for listening and actually caring for them. That is the biggest piece of the puzzle missing from the current hospital or PE owned systems. That is the true metric we need to be striving to improve.
Thanks for sharing Dr. Stamm. I agree with much of what you wrote. Our current ecosystem rewards capital infusion into private practices, which comes with the side effects of the actors giving the capital wanting to make a return. I tried to get at this idea of whether PE is all that much worse than what hospitals do, but you explained it much more succinctly. Personally, I think these trends of the corporatization and financialization within healthcare is concerning for how we'd ideally practice medicine, especially primary care, and a big reason that I am potentially interested in adopting alternative models such as DPC during my career.
Always happy to talk about DPC! It's growing steadily across the country and hopefully continues to grow. I would highly recommend attending the DPC Conference in July to learn more. You can apply for scholarships to attend.
Thank you for an interesting article. Thank you for researching this topic. It is an important one. I would be interested to see all-cause mortality related to PE ownership. Preventative care documentation is not equal to increasing health among the population.
I am generally against PE in healthcare. I don't think it is a good thing when people are more interested in making money than making sure people are well-cared for. I wonder what hospitals those involved in PE use??
A question - "Patients in acquired practices were more likely to see a greater number of distinct physicians and APPs" - is this meant to be a positive or negative outcome? I see it as a negative outcome. I like to see my primary doctor - he knows me, he knows my goals, he knows my history in a way it is difficult to get from reading a chart. We have a relationship. If I have to see a different doctor or APP every time I go to the doctor, that, to me, is a problem.
Thank you for your engaging comment. A couple of thoughts:
There have been some attempts to see if PE ownership impacts mortality. Our data was too noisy to make any conclusions one way or another, and I frankly think that seeing the impacts in primary care likely takes time to the point where the data is still catching up. There was one study published in Annals of IM (https://www.acpjournals.org/doi/10.7326/ANNALS-24-03471) last year that found increased ED mortality after PE acquires a hospital. Another study published in Health Affairs (https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.01102) found increased post-operative mortality for common inpatient surgeries after PE acquisition. And then a slightly older paper published in JAMA (https://jamanetwork.com/journals/jama/fullarticle/2813379) found an increase in adverse events but a small decrease in mortality for PE-acquired hospitals. All together, I think your question is very important, especially since no one has looked at it in the primary care setting to my knowledge.
I agree with you that when we shift the focus from taking care of patients to making money, things don't go well. To my knowledge, I haven't seen someone look at whether a PE-owned practice is part of a PE-owned hospital group, but there likely exists some overlap that would be interesting to examine.
In terms of PE acquired practices seeing more physicians and APPs, I think the interpretation varies depending on our priors. I am like you and see it as a negative outcome because I believe in the continuity of care and strength of relationship that you explain, but I'd wager that there are some who think primary care is moving to a team-based model and that this outcome is just a symptom of that phenomenon. Another way to interpret the data could be to conclude that there is physician turnover happening after PE acquisition, which I think could be a plausible explanation. We tried to address this by adjusting our models to look at changes within physicians as well, but I think it's a very reasonable alternative hypothesis.
I had the same question. It’s left as a neutral statement, but my unscientific gestalt is that this represents a loss to the patient and the physicians/APPs.
It is not just the overt capital infusion that has increased cost without improved care it is also the down stream effects of EMRs and how they played into promoting PE and consolidation. EMRs were not built for sharing health information and data. Their primary goal was billing/coding/cost. When hospital systems began seeing what physicians billed they saw a lucrative market to tap into, to own. By owning doctors they could maximize encounter billing and mandate the practice of internal churn where patients are run through a gauntlet of tests within the hospital’s own system. Along with stronger insurance contracts their negotiating positions strengthened and the cost of care continued to increase. The ACA is largely to blame for this.
Break up consolidation and limit PE and perhaps the cost will plateau, but its unlikely it will go down.
PE is omnipresent. On a regular basis, I learn that some huge company is owned by a PE firm. And of course, their tentacles have reached well beyond corporate America. Who could have imagined, for instance, that they would be targeting medical practices? PE has a rather checkered reputation, some of which is deserved. I find that a PE ownership model of a medical practice to be inherently problematic. The core missions of both entities collide. Can it work? While I think it is possible, these arrangements are riddled with conflicts that would be very difficult to manage. I think that if patients were fully knowledgeable about how PE ownership impacts their care, they would have deep concerns.
Bemoaning the entry of private equity into medicine is putting the cart before the horse. The worm in the apple was government intervention into the medical payment system. The subsequent descent into bureaucratization and corporatization was the inevitable result. This was predicted by a number of older physicians I spoke with when I entered medical practice 50+ years ago. They said that loss of autonomy would be a certain consequence. Opportunities to bilk the government would be an irresistible lure for charlatans and they would eventually take over. Indeed, it has evolved right along the lines they predicted.
Sorry, you're letting your politics obscure your view. Since the 1960s the medical system in the US has turned from healthcare of patients to enriching the ruling class. It was, at first , a slow shift. It's picked up great speed and is now barreling to self destruction. Governmental policies had very little to do with it except to offer a little public funding the rulers could capture. Loss of autonomy occurs when you work for a (crony-capitalist) employer. We used to be small businessmen. Now we're providers. The medicine we knew was glorious. You could help people and make a decent living. Now most of us wouldn't recommend it to our children.
"enriching the ruling class"???
You head is so deep in class warfare you can't see straight. Talk about politics.
No. I just happen to live in 21st century America.
You mean 19th Century Russia, right Putin?
It has nothing to do with politics---purely an economic argument. Full disclosure: I detest all politicians---no exceptions.
I suspect there are more visits because patients are required to make separate appointments for every concern they have.
And some is fake. When I go for a blood test, fully covered by my insurance, my clinic lists it as an office visit (a 2 minute visit) and charges it as an office visit. The lab test is covered. The "visit" has a copay. There are 4 million people in my healthcare network. It adds up.
I don't think medicine, government or education should be considered businesses or have profit motives. Private equity seems to, by its nature, lead to conflicts between profit and the best possible care for the patients.
Dr Dixit doesn't get to a key point until the very end, autonomy. Autonomy is a key issue for human beings, including doctors. Sure , we lose some of it qhwn we go from solo physician to multi-doctor groups, but we still want to retain the right to do what we believe best for our patients.
The trouble with private equity is that despite all the talk of improving efficiency their bottom line - is the bottom line. Milton Friedman argued in the 70's that "the social responsibility of business is to increase its profits". INot to make the best product --as it was for many corporations in the 50's. For private equity, good medical care is not an end, it is a means to the end. And we know from the track record of priate equity, when they buy up an entity, they saddle it with debt, pay themselves handsome dividends, and raise the price, be it for mattresses, health care, or whatever.
Good luck Meehir, I wished we could just "turn back the clock" so to speak and and let the primary physician have the autonomy. People are getting sicker and sicker and to not give the physicians the time to be with the patient is the worst. Sure you may have more billing, see more patients, but what is the "benefit"????? Wellness visits in the elderly is a scam.
I think the major issue is not VC
owned vs not VC owned but employed vs not employed
Hospitals and venture capitalists who employ (own) primary care practices view pcps as aggregators of populations and the almost sole objective is to increase capacity and throughput to the detriment of continuity and the doctor- patient relationship. It does not matter to them who sees the patient as long as they keep the patient enrolled and in- network
When I was in private practice ( until 2018 when I moved to Ca) I worked harder and made less money but had more energy, self- satisfaction, and sense of professionalism than when I became employed by a hospital system
Thank you for the great article. I hope that you consider primary care as we need people like you to carry on .
Agree with your point completely. Once physicians stop being the chief decision-makers and stop being "small business-owners," the practice and quality of medicine changes vastly. I know there are so many other factors as to why physicians have felt the pressure to consolidate (insurance negotiations, EMR costs, staffing, etc.), but I still hope there is room for the small business-owner type of physician to make a renaissance. Thanks for your comment–I definitely am keeping primary care towards the top of the list
Practice at a level that is good enough not to result in legal action that costs more money. And if you are motivated to practice at a higher level that fullfills your reason for entering the profession in the first place and allows you to sleep at night then that's on your dedicated self. The unfortunate global reality:(
Are we really engaging in a serious intellectual inquiry when asking the question “What effect will the entry of private equity have on primary healthcare delivery?” I think the answer is evident in what has happened to the U.S. economy writ large over the past 40 years. The shift from stakeholder to shareholder capitalism, concentrated market shares created by acquisitions and mergers, and the extractive strategies of private equity entities have led to an unprecedented shift of wealth and political power upward away from workers to a new American oligarchy that has hollowed out our middle class. And the process is magnified with every passing generation. “Milking more money from payers” is a given, but I cannot concede it is “not hurting anyone.”
I love that as a medical student you are aware of the issue of PE in medicine and thoughtfully looking into its effects on our healthcare system. We definitely need more of that in order to truthfully assess where we are and where we can improve. As a medical student 30 years ago I was not exposed to anything related to the business of medicine.
I think the biggest metric missed in this assessment is patient and physician satisfaction. It is not possible to give the kind of care patients deserve in a 10 minute visit. Since PE looks at medicine as a transaction meant to yield them a return on their investment, that isn’t their focus. That has become painfully obvious to both patients and physicians.
You can also just group PE and hospital-owned practices into the same group. The issue is the same at both. There is a bill in Congress right now being considered to limit PE from purchasing practices. At first glance that might seem like a good idea, however, that will just shift more practices into the hospital-owned category. Six of one, half dozen of the other (and a few bankruptcies away from a single payor, government run healthcare system. Ask a vet how well that system works at the VA). Still not fixing our broken system.
I have been in practice for 25 years in Family Medicine. This type of transactional focus on medicine has ruined our healthcare system. Physicians are unhappy and leave. Mid-levels move around from specialty to specialty to seek greener pastures (which exposes patients to lack of experience in care due to lack of training- a whole other issue). Due to lack of providers, patients are herded in and out of appointments like cattle so more can be squeezed into a day. This is leading to an unsustainable model.
Patients don’t care that you got them in and out of your office like you checked a box on your to do list. They want someone to listen to them and address them as a person not just one quick issue. That is something that isn’t being measured as a metric to whether PE is beneficial or not because it doesn’t generate money. In fact, that’s likely the part that would subtract from their profits.
I left my previous practice which went from a multi-specialty physician owned group to a PE owned group after 20+ years. I now own a Direct Primary Care Practice with another colleague and we couldn’t be happier. Our patients thank us every day for listening and actually caring for them. That is the biggest piece of the puzzle missing from the current hospital or PE owned systems. That is the true metric we need to be striving to improve.
Thanks for sharing Dr. Stamm. I agree with much of what you wrote. Our current ecosystem rewards capital infusion into private practices, which comes with the side effects of the actors giving the capital wanting to make a return. I tried to get at this idea of whether PE is all that much worse than what hospitals do, but you explained it much more succinctly. Personally, I think these trends of the corporatization and financialization within healthcare is concerning for how we'd ideally practice medicine, especially primary care, and a big reason that I am potentially interested in adopting alternative models such as DPC during my career.
Always happy to talk about DPC! It's growing steadily across the country and hopefully continues to grow. I would highly recommend attending the DPC Conference in July to learn more. You can apply for scholarships to attend.
Thank you for an interesting article. Thank you for researching this topic. It is an important one. I would be interested to see all-cause mortality related to PE ownership. Preventative care documentation is not equal to increasing health among the population.
I am generally against PE in healthcare. I don't think it is a good thing when people are more interested in making money than making sure people are well-cared for. I wonder what hospitals those involved in PE use??
A question - "Patients in acquired practices were more likely to see a greater number of distinct physicians and APPs" - is this meant to be a positive or negative outcome? I see it as a negative outcome. I like to see my primary doctor - he knows me, he knows my goals, he knows my history in a way it is difficult to get from reading a chart. We have a relationship. If I have to see a different doctor or APP every time I go to the doctor, that, to me, is a problem.
Thank you again.
Thank you for your engaging comment. A couple of thoughts:
There have been some attempts to see if PE ownership impacts mortality. Our data was too noisy to make any conclusions one way or another, and I frankly think that seeing the impacts in primary care likely takes time to the point where the data is still catching up. There was one study published in Annals of IM (https://www.acpjournals.org/doi/10.7326/ANNALS-24-03471) last year that found increased ED mortality after PE acquires a hospital. Another study published in Health Affairs (https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.01102) found increased post-operative mortality for common inpatient surgeries after PE acquisition. And then a slightly older paper published in JAMA (https://jamanetwork.com/journals/jama/fullarticle/2813379) found an increase in adverse events but a small decrease in mortality for PE-acquired hospitals. All together, I think your question is very important, especially since no one has looked at it in the primary care setting to my knowledge.
I agree with you that when we shift the focus from taking care of patients to making money, things don't go well. To my knowledge, I haven't seen someone look at whether a PE-owned practice is part of a PE-owned hospital group, but there likely exists some overlap that would be interesting to examine.
In terms of PE acquired practices seeing more physicians and APPs, I think the interpretation varies depending on our priors. I am like you and see it as a negative outcome because I believe in the continuity of care and strength of relationship that you explain, but I'd wager that there are some who think primary care is moving to a team-based model and that this outcome is just a symptom of that phenomenon. Another way to interpret the data could be to conclude that there is physician turnover happening after PE acquisition, which I think could be a plausible explanation. We tried to address this by adjusting our models to look at changes within physicians as well, but I think it's a very reasonable alternative hypothesis.
I had the same question. It’s left as a neutral statement, but my unscientific gestalt is that this represents a loss to the patient and the physicians/APPs.