Physician Practice Management and Private Equity: Market Forces Drive Change

Gilreath, Mark; Morris, Steven; Brill, Joel V.

doi:10.1016/j.cgh.2019.05.001

Cited by 17 publications

(23 citation statements)

References 2 publications

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“…21 Given that the PE owned management services organization ultimately has power to replace a practice's chief medical officer, PE firms have the ability to influence physician behavior. 1,5,6 Interventions to increase physician performance may include productivity reports, increased self-referrals for ancillary services and expanded roles of mid-level clinicians without sufficient physician supervision. 5,28 PE firms backing 2 of the 5 urology platforms identified in this study have already invested in the dermatology sector and it is expected that they apply similar strategies in the urology market; however, further research will be required to understand the impact of PE ownership on urology practice patterns.…”

Section: Discussionmentioning

confidence: 99%

Urology Practice Acquisitions by Private Equity Firms from 2011–2021

et al. 2022

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Introduction: Private equity firms have recently acquired several large urology practices in the United States. As little is known about these acquisitions, we sought to characterize trends in urology practice consolidation. Methods:We compiled urology practice acquisition data via financial databases, news outlets, practice websites, and Internet keyword search for the time period January 1, 2011 through March 15, 2021. For each acquisition, we determined the acquiring group, number of employed urologists, practice locations, and status of ancillary services (pathology, radiology, or surgery centers). We estimated workforce effects based on the 2019 American Urological Association workforce census.Results: We identified 69 independent practice acquisitions in the study period, including 19 (28.4%) by hospital systems, 7 (10.4%) by multispecialty physician groups, 23 (34.3%) by urology practices, and 20 (29.9%) by private equity-backed platforms. Private equity firms initially targeted large urology practices (mean of 60.8AE32.6 urologists) with ownership of ancillary services and consolidated local market share through acquisitions of smaller practices (mean of 15.9AE14.5 urologists). As of March 2021, we estimate that 7.2% of private practice urologists in the U.S. were employed by one of 5 private equity-backed platforms; over 25% of all urologists practicing in New Jersey and Maryland are employed by a private equity-backed platform.Conclusions: Private equity acquisitions have accelerated to become a dominant form of urology practice consolidation in recent years and have achieved significant market influence in certain regions. Future research should assess the impact of private equity investment on practice patterns, health outcomes, and expenditures.

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Section: Discussionmentioning

confidence: 99%

Urology Practice Acquisitions by Private Equity Firms from 2011–2021

et al. 2022

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“…Subsequently, there is an anticipated return on investment within three to six years through recapitalization. PE continues to affect practices in many subspecialities including radiology, dermatology, gastroenterology, and others as they continue to expand their presence[2, 5, 6].…”

Section: Introductionmentioning

confidence: 99%

“…For example, one recent study found that in Maryland and New Jersey, more than 25% of urologists were employed by a private equity backed platform company [1]. However, recent trend of private equity (PE) backed consolidation in ophthalmology and the healthcare system as a whole continues to raise concerns regarding patient care, physician autonomy, and overall health system costs [2,3]. In the typical PE model, firms invest into an ophthalmic management group, or platform company, which provides streamlined operational efficiency, revenue enhancement, and increased market share [4].…”

Section: Introductionmentioning

confidence: 99%

Private Equity Acquisition in Ophthalmology and Optometry: A Time Series Analysis of the Pre-COVID, COVID Pre-Vaccine, and COVID Post-Vaccine Eras

Patil

Vail

Cox

et al. 2022

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ObjectiveTo identify temporal and geographic trends in private equity (PE) backed acquisitions of ophthalmology and optometry practices in the United States from 2012 to 2021.DesignCross-sectional time series analysis using acquisition data from 10/21/2019 to 9/1/2021 compared to previously published data from 1/1/2012-10/20/2019. Acquisition data was compiled from 6 financial databases, 5 industry news outlets, and publicly available press releases. Linear regression models were used to compare rates of acquisition.Subjects245 PE acquisitions of ophthalmology and optometry practices in the United States between 10/21/2019 and 9/1/2021.MeasuresNumber of total acquisitions, practice type, locations, provider details, and geographic footprint.Results245 practices associated with 614 clinical locations and 948 ophthalmologists or optometrists were acquired by 30 PE-backed platform companies. 18 of 30 platform companies were new compared to our prior study. Of these acquisitions from 10/21/2019 - 9/1/2021, 127, 29, and 89 were comprehensive, retina, and optometry practices, respectively. From 2012 to 2021, monthly acquisitions increased by 0.947 acquisitions per year (p<0.001*). Texas, Florida, Michigan, and New Jersey were the states with the greatest number of PE acquisitions with 55, 48, 29, 28 clinic acquisitions, respectively. Average monthly PE acquisitions were 5.71 per month from 1/1/2019 - 2/29/2020 (pre-COVID), 5.30 per month 3/1/2020-12/31/2020 (COVID pre-vaccine, p=0.8072), and were 8.78/month 1/1/2021-9/1/2021 (COVID post-vaccine, p=0.1971).ConclusionPE acquisitions increased from 2012-2021 as companies continue to utilize both regionally focused and multi-state models of add-on acquisitions.

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“…The relentless consolidation of the US health care industry [ 1 ] has spread to the practice of gastroenterology, which, despite previous resistance [ 2 ] and persistent fragmentation [ 3 ], is belatedly being consolidated. In this issue of Digestive Diseases and Sciences , the authors of “Gastroenterology Practice Consolidation Between 2012 and 2020” [ 4 ] report that practice consolidation in gastroenterology has increased precipitously in recent years.…”

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confidence: 99%