Private Equity Acquisition of Physician Practices

Ideas and Opinions15 January 2019Private Equity Acquisition of Physician PracticesLawrence P. Casalino, MD, PhD, Rayhan Saiani, MD, Sami Bhidya, MS, Dhruv Khullar, MD, MPP, and Eloise O'Donnell, MPHLawrence P. Casalino, MD, PhDWeill Cornell Medicine and New York Presbyterian Hospital, New York, New York (L.P.C., R.S., D.K.)Search for more papers by this author, Rayhan Saiani, MDWeill Cornell Medicine and New York Presbyterian Hospital, New York, New York (L.P.C., R.S., D.K.)Search for more papers by this author, Sami Bhidya, MSNew York Presbyterian Hospital, New York, New York; and Weill Cornell Medicine, New York, New York (S.B., E.O.)Search for more papers by this author, Dhruv Khullar, MD, MPPWeill Cornell Medicine and New York Presbyterian Hospital, New York, New York (L.P.C., R.S., D.K.)Search for more papers by this author, and Eloise O'Donnell, MPHNew York Presbyterian Hospital, New York, New York; and Weill Cornell Medicine, New York, New York (S.B., E.O.)Search for more papers by this authorAuthor, Article, and Disclosure Informationhttps://doi.org/10.7326/M18-2363 SectionsAboutFull TextPDF ToolsAdd to favoritesDownload CitationsTrack CitationsPermissions ShareFacebookTwitterLinkedInRedditEmail Acquisition of physician practices by private equity firms has increased dramatically during the past few years (1). Such acquisitions are a significant phenomenon with unknown consequences for physicians and patients, although they have received little attention from researchers and policymakers.We describe this phenomenon and explore its implications, based on review of the gray literature and the very limited peer-reviewed literature. We interviewed 21 knowledgeable individuals around the United States, including consultants; attorneys; investment bankers; and leaders of private equity firms, physician practices, and health insurers.Private equity firms invest in many industries using capital provided by pension funds, sovereign ...References1. Herschman GW. Physician groups should consider strategic options as mergers, acquisitions boom. MGMA Connex. 2018;(May);26-8. Google Scholar2. Pavarini PA, Schaff MF. New barbarians at the gate? What private equity wants from medical practices and how to advise clients. Presented at American Health Lawyers Association Physicians and Hospitals Law Institute, Orlando, Florida, 1–3 February 2017. Google Scholar3. Resneck JS. Dermatology practice consolidation fueled by private equity investment: potential consequences for the specialty and patients. JAMA Dermatol. 2018;154:13-4. PMID: 29164229 doi:10.1001/jamadermatol.2017.5558 CrossrefMedlineGoogle Scholar4. Hafner K, Palmer G. Skin cancers rise, along with questionable treatments. The New York Times. 20 November 2017. Accessed at www.nytimes.com/2017/11/20/health/dermatology-skin-cancer.html on 28 November 2018. Google Scholar5. Irving Levin Associates. 2018. Accessed at https://healthcare.levinassociates.com on 28 October 2018. Google Scholar6. Casalino LP. The Medicare Access and CHIP Reauthorization Act and the corporate transformation of American medicine. Health Aff (Millwood). 2017;36:865-9. PMID: 28461353 doi:10.1377/hlthaff.2016.1536 CrossrefMedlineGoogle Scholar7. Reinhardt UE. The rise and fall of the physician practice management industry. Health Aff (Millwood). 2000;19:42-55. PMID: 10645072 CrossrefMedlineGoogle Scholar8. Robbins CJ, Rudsenske T, Vaughan JS. Private equity investment in health care services. Health Aff (Millwood). 2008;27:1389-98. PMID: 18780929 doi:10.1377/hlthaff.27.5.1389 CrossrefMedlineGoogle Scholar9. Burns LR, Pauly MV. Transformation of the health care industry: curb your enthusiasm? Milbank Q. 2018;96:57-109. PMID: 29504199 doi:10.1111/1468-0009.12312 CrossrefMedlineGoogle Scholar10. Burns LR, Goldsmith JC, Sen A. Horizontal and vertical integration of physicians: a tale of two tails. Adv Health Care Manag. 2013;15:39-117. PMID: 24749213 CrossrefMedlineGoogle Scholar Author, Article, and Disclosure InformationAffiliations: Weill Cornell Medicine and New York Presbyterian Hospital, New York, New York (L.P.C., R.S., D.K.)New York Presbyterian Hospital, New York, New York; and Weill Cornell Medicine, New York, New York (S.B., E.O.)Financial Support: By the Physicians Foundation Center for the Study of Physician Practice and Leadership at Weill Cornell Medicine. The Foundation did not suggest the topic or participate in the research or the writing of the manuscript.Disclosures: Disclosures can be viewed at www.acponline.org/authors/icmje/ConflictOfInterestForms.do?msNum=M18-2363.Corresponding Author: Lawrence P. Casalino, MD, PhD, Livingston Farrand Professor of Public Health, Chief, Division of Health Policy and Economics, Department of Healthcare Policy and Research, Weill Cornell Medicine/New York Presbyterian Hospital, 402 East 67th Street, Room LA 217, New York, NY 10065-6304; e-mail, email protectedcornell.edu.Current Author Addresses: Dr. Casalino and Ms. O'Donnell: Department of Healthcare Policy and Research, Weill Cornell Medicine/New York Presbyterian Hospital, 402 East 67th Street, Room LA 217, New York, NY 10065-6304.Dr. Saiani: New York Presbyterian Hospital, 525 East 65th Street, New York, NY 10065.Mr. Bhidya and Dr. Khullar: Weill Cornell Medicine, Department of Healthcare Policy and Research, Weill Cornell Medicine/New York Presbyterian Hospital, 402 East 67th Street, New York, NY 10065-6304.Author Contributions: Conception and design: L.P. Casalino, R. Saiani, D. Khullar, E. O'Donnell.Analysis and interpretation of the data: L.P. Casalino, R. Saiani, S. Bhidya, D. Khullar, E. O'Donnell.Drafting of the article: L.P. Casalino, R. Saiani, S. Bhidya, D. Khullar, E. O'Donnell.Critical revision of the article for important intellectual content: R. Saiani, D. Khullar.Final approval of the article: L.P. Casalino, R. Saiani, S. Bhidya, D. Khullar, E. O'Donnell.Provision of study materials or patients: E. O'Donnell.Statistical expertise: S. Bhidya.Obtaining of funding: L.P. Casalino.Administrative, technical, or logistic support: S. Bhidya, E. O'Donnell.Collection and assembly of data: L.P. Casalino, R. Saiani, S. Bhidya, D. Khullar, E. O'Donnell.This article was published at Annals.org on 8 January 2019. PreviousarticleNextarticle Advertisement FiguresReferencesRelatedDetailsSee AlsoPrivate Equity Acquisition of Physician Practices Lawrence P. Casalino , Rayhan Saiani , Sami Bhidya , Dhruv Khullar , and Eloise O'Donnell Private Equity Acquisition of Physician Practices Sailesh Konda , Joseph Francis , Kiran Motaparthi , and Jane M. 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Grant-Kels, MD 15 January 2019Volume 170, Issue 2Page: 114-115KeywordsDatabasesDermatologyDisclosureHealth careHealth care policyHealth economicsHealth services researchHospital medicinePublic policyUrology ePublished: 8 January 2019 Issue Published: 15 January 2019 Copyright & PermissionsCopyright © 2019 by American College of Physicians. All Rights Reserved.PDF downloadLoading ...