Primary care physicians are moving to hospitals and private equity, raising healthcare costs, study finds

Almost half of primary care physicians are affiliated with hospitals, and the increasing number of physician practices have been acquired and integrated by recent private equity companies. study By a brown researcher. Compared to independent companies, these integrated companies may lead to increased costs and limit patient access to primary care providers.

Between 2009 and 2022, the proportion of PCPs employed in hospitals rose from 25.2% to 47.9%, with 1.5% of PCPs “participating with PE companies,” the survey found.

The costs of hospital-related PCPs and private equity affiliated PCPs analyzed in the study were 10.7% and 7.8% higher than the practices of independent primary care physicians, respectively, Yashaswini Singh was the leading author of the study. There, according to Yashaswini Singh, an assistant professor of health services, policy and practice.

“These may seem like a small number, but if you add them together it’s a billion dollars overpayment,” Singh said.

In their study, Singh and other researchers used a commercial database to examine PCP employment trends to analyze the affiliation of employees with a total of 198,097 PCPs. Researchers relied on a collection of hand-compiled data, including press releases and websites, to verify the physician’s private equity alliance status.

The presence of private equity companies in the healthcare market has risen over the past decade due to the high profitability of the market, Singh said. Companies primarily use an integrated “platform and add-on” approach, she explained.

However, such an approach often results in increased costs without improving quality, Singh noted.

“Private equity has a very strong incentive to withdraw your investment in the short term, so the long-term trends in that particular investment strategy are even more important,” Singh said.

The team of researchers also analyzed over 226 million negotiation prices and determined healthcare costs associated with the primary care practices acquired. Generally, the price of the service is set by negotiation between the insurance company and the hospital or doctor group, so the larger group of insurers usually has more advantages for negotiating the lower prices of patients, Singh says I said that.

However, Singh says that cost differences have also been found in large national insurance companies, suggesting that they may not be able to use leverage to lower prices in negotiations.

“One reason they may not be using it is because they can give the higher prices that insurers are paying consumers in the form of higher premiums and out-of-pocket,” she said. I added.

Andrew Ryan, professor of health services, policy and practice and director of the Center for Advancement of Health Policy Through Research, expressed concern about increased costs due to hospital facility fees. .

“A clinic owned by a hospital will generate hospital facility fees, even if it does not involve hospital care,” Ryan said, and the fees “double the price of a visit.” He added that it can.

Rather than improving patient care and access or increasing physician income, these increased costs often lead to benefits insurers and business investors, Singh added.

Tom Bledsoe MD’88, primary care physician at East Providence Primary Care and former president of the Rhode Island Medical Association, warned of the risks of integration in Rhode Island’s for-profit health care systems .

Bledsoe, who has worked in primary care for 34 years, explained for a while that hospitals have “increased primary care practices to protect revenue streams primarily for more expensive services.”

“It risks monopoly and price hikes in other markets,” he added.

These concerns have already been amplified Few doctors Bledsoe said. He noted that a small number of doctors would like to run private practices. Management burdendriving more doctors to partner with hospitals and private equity companies.