Investor-bought PCPs carry on like nothing much has changed—with caveats

Private-equity acquisitions of primary-care provider practices neither alter hospitalization rates nor affect acute-care outcomes, according to new research out of Brown University. 

Senior study author Yashaswini Singh, PhD, MPA, and colleagues made the findings upon comparing Medicare records of more than 24,300 patients of PE-acquired primary-care practices with the records of around 122,000 matched controls. 

The team found that patients seeing PE-acquired physicians experienced a small reduction in emergency department visits (1.36%), but the finding was inconsistent across differentiating variables. 

Further, contrary to popular perceptions, PE acquisitions seemed not to push practices toward selecting healthier patient populations to serve.  

The authors note their relatively early study period, 2016 to 2022, acknowledging that many PE scoop-ups of primary-care practices occurred during and after 2020. 

Still, consistently across various sensitivity tests, PE acquisitions in primary care “did not yield meaningful changes in all-cause or preventable hospitalizations for the traditional Medicare population,” the authors report. “These findings highlight the heterogeneity [we found] in patient outcomes following PE acquisition across care settings.”

JAMA Health Forum published the study May 8. 

Qualifiers and considerations 

In their discussion, Singh and colleagues qualify their findings as needing careful interpretation in light of several methodological considerations. 

One such consideration is that potentially preventable hospitalizations and emergency department visits “may require longer follow-up periods to detect meaningful changes.” 

Another: While the outcomes uncovered by the present research are not rare in absolute terms, affecting millions of Medicare beneficiaries annually, the base rates within individual PCP practices “may limit statistical power, particularly given PE’s recent entry into primary care.” 

The researchers call special attention to their finding that patients with PE-acquired PCPs experienced a marginal reduction in emergency department visits. 

“Although this finding was directionally consistent across all specifications, results were not significant on incorporating different follow-up periods and without patient fixed effects,” Singh et al. write. 

This variation likely reflects several factors, they add, including potential differences in unobserved patient composition between PE-acquired and control practices as well as heterogeneity in PE firm strategies and implementation timelines. 

“Given the variation across model specifications and the modest reductions in ED visits,” the team reports, “we interpret our findings as suggestive of minimal short-term impact rather than definitive evidence of patient benefit.”

Private equity’s growth in healthcare warrants ongoing watchfulness  

Singh and fellow researchers further urge their readers not to construe the present findings as evidence that PE acquisitions of physician practices should proceed without oversight. 

“Previous research has identified specific concerns emerging from PE’s ‘platform and add-on’ model of consolidation that has been shown to increase healthcare prices without improving quality or patient care,” they write, citing numerous prior studies.

They also point to their own prior research showing that PE-acquired PCP practices negotiate 8% higher commercial prices relative to independent practices.

“Given that PE investments do not drive measurable improvements or immediate harm to outcomes in the short term, future research must examine whether this cost-quality mismatch persists or worsens over longer time horizons,” Singh et al. write. 

More: 

‘Key priorities for policy include mandatory disclosure requirements for acquisitions to promote ownership transparency and facilitate timely detection of patient concerns, as well as greater antitrust enforcement of PE’s platform and add-on model of consolidation that can alter the competitive landscape of primary care through incremental acquisitions that drive higher prices and workforce disruptions.’

The paper is posted in full for free.