Private equity firms are swiftly acquiring physician practices, gaining significant market share in many cities and boosting medical prices in an array of specialties, according to an academic study released Monday.
English
Physician Practices Acquired by Private Equity Firms Lead to Increased Pricing
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The report found that “PE acquisitions are associated with price increases in 8 of 10 specialties, and that these price increases are particularly high in [metropolitan areas] where a single PE firm controls more than 30% of the market.”
For example, prices for gastroenterologists jumped 14 percent, for oncologists they rose 16 percent and for ophthalmologists it was 9 percent, according to the research from the University of California at Berkeley and the Washington Center for Equitable Growth. Price hikes were higher when a private equity-owned practice controlled a large share of the market. The study found that the number of metropolitan areas in which a private equity firm served half or more of a market rose from a handful in 2012 to 50 in 2021.
A recent Washington Post story chronicled the price hikes that followed a private equity venture into anesthesia.
The study authors urged federal regulators to more closely examine the effects of private equity investments in medical groups.
“The vast majority of [private equity] acquisitions in this report took place without federal antitrust scrutiny and with limited state antitrust scrutiny,” the authors wrote.
In recent months, antitrust enforcers at the U.S. Department of Justice and the Federal Trade Commission have talked of applying more scrutiny to private equity acquisitions of physician practices.
