Regulatory Framework for Private Equity and Corporatization in Health Care: A Position Paper From the American College of Physicians

The growing involvement of private equity in the health care sector raises important questions about its effect on cost, quality, access, and the physician workforce. Private equity investment in health care is associated with increased costs and, in some settings, adverse effects on care delivery and outcomes. Rising costs, administrative burdens, workforce shortages, and declining reimbursement have made independent practice increasingly difficult, contributing to physician transitions to corporate ownership models. Physicians employed by private equity-owned health care organizations may also experience challenges due to the evolving dynamics of their work environment. State and federal regulators, as well as lawmakers, should consider implementing policy interventions to address these challenges. Although corporate investment may improve efficiency and, in limited instances, care delivery, private equity in this sector raises important questions about its role and effects. This American College of Physicians (ACP) position paper builds on the previous ACP position paper on financial profit in medicine, which explored the growing influence of corporate interests and private equity investment in the health care industry. This paper examines the effect of private equity investment on clinical autonomy, health care costs, quality, access, equity, and innovation. It emphasizes the need for more vigorous enforcement of regulatory measures and policy solutions to preserve the quality of patient care and protect the physician workforce. It also offers recommendations to strengthen oversight, transparency, and accountability related to private equity's effects on clinical autonomy, care delivery, and organizational decision making. Finally, it discusses the potential opportunities and challenges associated with private equity investment in health care, including increased consolidation and corporatization.