PE firms targeted specialty practices that serviced more commercially insured patients compared to their non-PE counterparts.
Following an acquisition by a private equity (PE) firm, dermatologists were paid prices 3% to 5% higher for routine medical visits compared to non-PE dermatologists, according to a Health Affairs study published Monday afternoon.
In addition to being paid higher prices, researchers from Weill Cornell Medicine also found that PE-owned dermatologists saw a greater volume of patients compared to non-PE dermatologists, ranging between 4.7% to 17% higher.
The research was based on commercial claims from the Health Care Cost Institute from 2012 to 2017. PE firms targeted specialty practices that serviced more commercially insured patients compared to their non-PE counterparts.
Researchers also found that one-in-11 dermatologists worked in a PE-owned physician practice by 2017.
This is the latest research regarding the impact of PE on healthcare, specifically as it relates to buying physician practices.
There were more than 350 physician practice acquisitions by private equity firms between 2013 to 2016, according to a JAMA study released in February 2020.
The report's authors concluded that while there was "no significant consistent impact" on dermatology spending, lawmakers and practice leaders should focus on tracking PE acquisitions in the sector.
"Increased attention to private equity acquisitions of physician practices on the part of policy makers, researchers, and leaders in dermatology is warranted by the rapid growth of these acquisitions; the debt that the acquisitions place on practices; the financial problems of some large private equity–acquired practices; and the lack of data on the quality of care, on patient experience, or on long-term results in private equity–acquired practices compared with other practices," the authors wrote.
Jack O'Brien is the Content Team Lead and Finance Editor at HealthLeaders, an HCPro brand.