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Businesses Medicine

Who Employs Your Doctor? Increasingly, a Private Equity Firm. (nytimes.com) 120

Posted by msmash from the closer-look dept.
In recent years, private equity firms have been gobbling up physician practices to form powerful medical groups across the country, according to a new report. The New York Times: In more than a quarter of local markets -- in places like Tucson, Ariz.; Columbus, Ohio; and Providence, R.I. -- a single private equity firm owned more than 30 percent of practices in a given specialty in 2021. In 13 percent of the markets, the firms owned groups employing more than half the local specialists. The medical groups were associated with higher prices in their respective markets, particularly when they controlled a dominant share, according to a paper by researchers at the Petris Center at the University of California, Berkeley, and the Washington Center for Equitable Growth, a progressive think tank in Washington, D.C.

When a firm controlled more than 30 percent of the market, the cost of care in three specialties -- gastroenterology, dermatology, and obstetrics and gynecology -- increased by double digits. The paper, published by the American Antitrust Institute, documented substantial private equity purchases across multiple medical specialties over the last decade. Urology, ophthalmology, cardiology, oncology, radiology and orthopedics have also been major targets for such deals. "It's shocking when you look at it," said Laura Alexander, director of markets and competition policy for the Washington Center, who said private equity firms dominated only a handful of markets a decade ago. By looking at individual markets, the researchers were able to document the local impact. "National rates mask this much more acute problem in local markets," she said.
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Who Employs Your Doctor? Increasingly, a Private Equity Firm. More

Who Employs Your Doctor? Increasingly, a Private Equity Firm.

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  • What did you expect in 'merka (Score:4, Informative)

    by Anonymous Coward on Thursday July 13, 2023 @11:26AM (#63682689)
    The business of 'merka IS business. AKA Greed. EOF.

    • Capitalism thrives on competition. (Score:5, Informative)

      by Brain-Fu ( 1274756 ) on Thursday July 13, 2023 @12:08PM (#63682793) Homepage Journal

      In order to reap the benefits of capitalism, there must be open competition. That's what keeps quality up and prices down. Monopolism (and cartel formation) eliminate competition and thus ruin capitalism. And that is exactly what is happening here.

      The correct answer is government intervention. This upsets people who have an irrational faith in free markets, or who believe that completely-unregulated markets are somehow a necessary component of capitalism. Even Adam Smith wrote about this very problem, and how government intervention is necessary to break up monopolies and cartels and keep everyone competing.

      All we are seeing here is history repeating itself. The way forward is clear: break them up.

      • Breaking it up is a short-term solution, but not a great one. We should be looking at *why* being purchased by private equity is so attractive to a company.

        In my experience there are two main factors:

        1. SEC compliance is cumbersome, expensive, and potentially treacherous. I've worked with companies who have been fined for violating a regulation the SEC couldn't clearly explain how to be in compliance with.

        2. Shareholders have unrealistic expectations. A few years ago Tesla had a larger market cap than GM. T

      • In order to reap the benefits of capitalism, there must be open competition. [...] The correct answer is government intervention. This upsets people who have an irrational faith in free markets, or who believe that completely-unregulated markets are somehow a necessary component of capitalism.

        There's one more consideration. Different markets have varying sensitivities to supply and demand and correspondingly competition. For true commodities, especially where the specific commodity is considered discretionary and can be either forgone or substituted, supply and demand have a significant influence on prices. However, the less that a product or service is discretionary, the more supply and demand influence wanes.

        Many forms of health care are close to being largely unaffected by supply and deman

      • The desired end point of capitalism is monopoly.
        Welcome to merica

      • The correct answer is government intervention.

        Well, except the person in the government responsible for intervening just had their child sent to a private school on someone else's dime along with attending some exotic vacations. And the person responsible for catching the corruption of the first person failed to investigate because they were on a yacht near the Bahamas scuba diving with models. It sure is nice being on the inside. Very comfortable. It sucks for everyone else, but the world is a cruel place and other folks just aren't as important as I

  • Financial predators (Score:5, Insightful)

    by denelson83 ( 841254 ) on Thursday July 13, 2023 @11:30AM (#63682697)

    That is what private equity firms really are.

    • Re: (Score:3, Funny)

      by cayenne8 ( 626475 )
      I couldn't get past the paywall of the NYT.

      Does anyone know what equity firm is leading the way on these purchases?

      I'd like to invest, sounds like a money maker....

    • Locusts.

      Call them what they really are. They gobble up everything and when there's nothing left to pillage, they leave a desert behind.

    • Re:Financial predators (Score:4, Interesting)

      by mysidia ( 191772 ) on Thursday July 13, 2023 @12:31PM (#63682883)

      They aren't the only ones.. All large businesses are predators; just some more obvious than others, and ought to be addressed swiftly by regulators - if only the regulators cared.

      Services necessary to maintain health and treat medical conditions are vital, and business conduct should be regulated strictly - Especially medical groups; they shouldn't be allowed to coordinate prices.

      There should be legal caps on the profit margin for each service, a maximum percentage take for each entity on the work done by that entity with a higher allowed rate for the individual professional than groups or organizations (And similar profit cap margin on the supply of each necessary product or material by suppliers).

      • I get my medical care through the VA, and when I have any dealings with outside providers, they send the bill to the VA. Later, I get a statement, telling how much they charged, how much the VA paid and how much I owe. Recently, I had a routine procedure done by an outside service because the VA decided that it was quicker than waiting for them to have an opening for me. The statement I received showed that the service charged $470, the VA paid $180 and I owed $0.00. That's because in order for those pr

        • Re: (Score:2)

          by mysidia ( 191772 )

          If they are willing to accept $180 for their work, what can the difference between that and the $470 they billed be, but pure, excessive profit?

          The difference can be a loss. It's possible the provider lost a lot of money (Was forced to spend more money in cost than they are allowed to bill the customer) on that particular transaction.

          Medicare has a similar rule - the payment for services is dictated to a standard amount by the program, Member providers are not allowed to charge patients for the shortfall,

          • So you correctly point out that price regulation leads to inflated prices, then you say the solution is more price regulation. Nice logic.

            • Re: (Score:2)

              by mysidia ( 191772 )

              So you correctly point out that price regulation leads to inflated prices

              It is not price regulation that leads to them -- it's Unbalanced regulation: Rules that provide preferential treatment for some people and not others. The "inflated prices" Are in the areas where Prices are Not Controlled. Essentially: The customers that don't have the pricing protection will end up subsidizing the customers that do.

          • Do you really believe that service would be accepting referrals from the VA if they were losing money on the transaction? They'd either only accept referrals on procedures that they mae a profit on, or not at all.

            • Re: (Score:2)

              by mysidia ( 191772 )

              Do you really believe that service would be accepting referrals from the VA if they were losing money on the transaction?
              Yes.

              They'd either only accept referrals on procedures that they make a profit on, or not at all.

              Chances are they don't have that option. It can be that it is Profitable for them overall to receive referrals from that entity, But they are Not allowed to cherrypick which ones they want -- Very likely if a referral come back as refused, then they lose All future business not just the u

    • You are damned if you do, and damned if you don’t hear - people are selfish and greedy and none of our models fully account for that. Capitalism is simply the route that is the least worst of them all.

      Translation: private equity simply means private ownership. Compare this to the regulatory model of lawyers - I can go out and hire a bunch of doctors, and as long as I (not being a doctor) do not provide actual medical services or advice, is fine. The same is not true for lawyers. This is why you kno

  • I though /. was more international? I guess not?

  • When you're old, good chance you'll die (Score:4, Insightful)

    by rsilvergun ( 571051 ) on Thursday July 13, 2023 @11:37AM (#63682713)
    in hospital because an overworked nurse couldn't get to you in time. Or maybe you're doctor, under pressure to keep within his alloted time per patient, misses that cancer.

    Without overwhelmingly strong unions they can't demand enough staff. And you're health and life are on the chopping block.

    This is all pretty obvious, but the question is, are you going to change how you vote? Right now there's a huge culture war going on. A moral panic around trans/drag queens. A lot of folks here on this forum are voting based on that moral panic.

    When you're lying in a hospital bed unable to breath and there's no one coming, that'll be why. Or maybe it'll be another culture war issue. Maybe CRT will get you. Or mask wearing. Or maybe they'll just scare you with dodgy crime statistics like they did to my mom (she died pretty young of lung cancer from highly addictive smokes).

    Unless this changes how people vote none of this matters.
    • Neither side has done anything to address the problem, which is a shortage of medical professionals. We have all these people borrowing $100K+ for college debt and somehow too few getting trained where they are needed most. There are too few residency slots, period.

      To be fair, Obamacare did start out with some provisions to actually reduce costs instead of just redistributing them. But people rejected this with cries of "Death Panels!" (This is the Republican equivalent of liberal jouranlists who writ

      • Re: (Score:2)

        by sfcat ( 872532 )

        Neither side has done anything to address the problem, which is a shortage of medical professionals.

        That's not a bug, its a feature. The AMA restricts the number of spots in medical schools precisely to make sure doctor's salaries stay high. It could be fixed, but it never is.

      • Called affordable Care act. It had all kinds of subsidies for training nurses. And Joe Biden has repeatedly tried to enforce antitrust laws and been shut down by Trump appointed judges.

        If one side isn't doing enough it's because the other side keeps getting elected by folks like you. There is literally a name for it. It's called the contract with America and it was newt gingrich's plan to stymie anything good the Democratic party could do for you so that you would blame both sides and let the Republican

        • Re: (Score:2)

          by madbrain ( 11432 )

          I think you misspoke, it's the contract ON America.

        • The only thing the "Affordable" care act did was to massively increase healthcare costs. It was a big giant government handjob to corporate health groups.

          The only small positive it had for the consumer was to eliminate the pre-existing condition exclusion from insurance plans, which insurance companies had been massively abusing. However this does create a perverse incentive for healthy young people to not get insurance if it's too costly for them, since they could always sign up for insurance later on if t

    • Re: (Score:1)

      by GlennC ( 96879 )

      ... the question is, are you going to change how you vote?

      You assume that voting will change anything.

      Thanks to the "Team Red" and "Team Blue" duopoly, it no longer matters how you, I, or anyone else votes.

      • it no longer matters how you, I, or anyone else votes.

        What's your replacement then? If you can't provide one, then the OP's consequences still apply: You die alone in some hospital bed because some rich asshole wouldn't allow the doctors and nurses to help you so he could make more money.

        FYI: Yes, it does matter how everyone votes. The problem is that, like everything else in the US, people don't give a fuck about it. If you vote to keep the "other" guy out, then you are part of the problem. If you refuse to vote for someone else when the previous one you vo

    • Unions are very strong for nurses. Whatâ(TM)s happening right now is that those nurses are quitting the union and becoming independent traveling nurses, bouncing between medical systems and charging upwards of $50/hour. Youâ(TM)d have to be either pretty bad or stupid right now (or both) to stay in the union and not become part of either a contracting group or the best go completely independent.

    • This is all pretty obvious, but the question is, are you going to change how you vote?

      Ok. I am listening. How do I change how I vote to get reasonable outcomes? I swear to fucking God if you fucking tell me to vote pure Democrat, I am going to get REALLY upset at you. We have had full Democrat legislatures and I failed to see any difference in the overall corruption. The only thing that changes is the flavor and presentation of the corruption.

      So, how do I vote to get reasonable outcomes?

  • Single-payer universal healthcare (Score:5, Insightful)

    by dskoll ( 99328 ) on Thursday July 13, 2023 @11:38AM (#63682717) Homepage

    Single-payer universal healthcare is about the only thing that will rein in medical costs.

    Physicians can form private practices. But they bill the government who pays at prescribed rates. Get the profit motive out of the equation.

    • Single-payer is a great chant, but not the best system. Let's start saying "Universal healthcare" instead. The German model has been described as a good fit for the USA to transition to UH, and it's not single-payer. SP is just a government monopoly. There's a lot of room for reform, even in our government run programs (we have VA, Medical, and Medicaid), but one big single-payer program has fundamental flaws, so we need to think a bit harder about what will really fix things. Single-payer in the USA r

  • ... in the US (Score:4, Insightful)

    by Rosco P. Coltrane ( 209368 ) on Thursday July 13, 2023 @11:41AM (#63682725)

    In most of the EU, doctors are paid by the state, directly or indirectly. in full or partially. That's not to say that doctors aren't on the take there, but at least it's not a fully private, die-if-you-can't-pay sort of a system where the medical professionals are increasingly used as vehicles to collect monetizable patient's private health data.

    • In most of the EU, doctors are paid by the state, directly or indirectly. in full or partially. That's not to say that doctors aren't on the take there, but at least it's not a fully private, die-if-you-can't-pay sort of a system where the medical professionals are increasingly used as vehicles to collect monetizable patient's private health data.

      In some places they also have a private clinic that charges for visits; and given pay differentials medical professionals leave lower paying members states for higher paying ones, creating shortfalls. They may not be on the take, but they follow the money. Not a bad system, but not a panacea either.

    • Re: (Score:2)

      by Entrope ( 68843 )

      Here in the US, almost all doctors are partially or entirely paid by our governments -- there are probably way more who work directly for the government than who don't accept government payments. About half [cms.gov] of all US healthcare spending is by governments -- 34 percent federal, 15 percent state and local.

      • In the USA the percentage of health care professionals employed by government is small. Even in California they are a tiny minority. Most of that health care spending is not on salaries, it is on private care.

        • Re: (Score:2)

          by Entrope ( 68843 )

          I was responding to a comment that said "doctors are paid by the state, directly or indirectly. in full or partially." The same is true for almost all US doctors. Read the rest of the thread -- lots of people explain how Europe has privately employed doctors even with government payment.

          • In many areas of the US there's only a minority of services that accept the free government insurance, and very long waiting lists. Even in California it's extremely uneven. I was actually able to be seen pretty quickly in Lake and Mendocino county for free, but up here in Humboldt it turns out it's a bit of a nightmare even if you have insurance from an employer.

      • The problem of the US system is its inefficiency. A lot of money (both in absolute terms and compared to GDP) for poor results (as measured by life expectancy, infant mortality, preventable deaths, etc.).

  • Believe in my power. I will keep you alive until you are broke.

  • Who ? (Score:2)

    by tizan ( 925212 )

    Who employs Dr Who ?

  • Oligopolies almost always suck (Score:3)

    by Tablizer ( 95088 ) on Thursday July 13, 2023 @12:02PM (#63682779) Journal

    A few "big hardware" industries may really need "economies of scale" (size) to be effective, but the vast majority don't. Oligopolies & Monopolies almost always result in higher prices and slack service. They merge to avoid competition, not become more competitive.

  • In our area? (Score:3)

    by nightflameauto ( 6607976 ) on Thursday July 13, 2023 @12:10PM (#63682797)

    In our area it's mostly Denny Sanford. Though there is one alternative left that isn't outright owned by Sanford, they're impacted by Sanford's practices pretty significantly. Medical staffers that I know prefer to work for the alternative, as the big name is big on procedural bullshit like most business owners. Clocking every patient visit and making sure no one gets "too much time" or "too much attention." Right-sizing / efficiency studies constantly pouring over each other trying to keep costs / times low and fast, and trying to keep medical staff stretched as thin as they can possibly stretch them time-wise so as not to "overpay" for staff to just sit around.

    It's a brutal grind, and a lot of folks are fed up doing it. Doctors, nurse practitioners, registered nurses.

    When the main hospitals are owned by the same company that owns the biggest medical insurance provider, the arena, the convention center, the main sports complexes, and a big chunk of the downtown? It's hard to see the medical and insurance industry as anything other than another profit center for the fat-cats that own it.

    Oh, and about those pesky "no collusion between insurer and hospital" problem? Funny how Sanford's medical division and Sanford's insurance division, working together, manage to continually raise insurance premiums year after year after year by astronomical amounts, as well as the cost of nearly every medical procedure. I'm sure there's zero collusion there.

  • Utah (Score:5, Interesting)

    by laie_techie ( 883464 ) on Thursday July 13, 2023 @12:13PM (#63682811)

    I've lived in Hawaii and Utah. When I moved to Utah, I was alarmed and saddened by the state of healthcare. Virtually every hospital is owned by an insurance company. Insurance companies are supposed to use actuary tables and their client base to determine deductibles and co-pay and advocate for its clients, but why would they negotiate a lower cost to clients when whatever the patient pays to the hospital goes into the insurance company's coffers?

    I was affected by a layoff last year and had to take a child to the ER for respiratory problems. That visit with no insurance set me back $500. The job I later found offers insurance through the company which owns that hospital. My copay to go to the ER is $500 - the same as if I didn't have insurance.

    • You’re lucky it was only $500. Typically just walking into an ER will set you back $5000. I have insurance but it’s something like a $10,000 deductible. Worthless for minor problems but required for anything major. Financially I would be better off not having insurance and then simply declaring bankruptcy for anything major.

      • Re: (Score:2)

        by kackle ( 910159 )
        I recall health insurance used to be called "major medical insurance". I presume that was to handle the situations that would otherwise bankrupt the patient.
      • That's a load of bullshit. I've been to the ER without insurance 3 times in the last 2 years; the cheapest visit was just over $800, the most expensive just under $1,500. Why in the world would you like and make up a minimum which is an order of magnitude greater?

        • That's a load of bullshit. I've been to the ER without insurance 3 times in the last 2 years; the cheapest visit was just over $800, the most expensive just under $1,500. Why in the world would you like and make up a minimum which is an order of magnitude greater?

          That particular visit to a pediatric ER without insurance was $500. My son had this particular breathing problem in the past, so it was already known he needed a specific steroid to open his airway. Based on medical regulations a doctor needs to see a patient before giving a prescription for that steroid. The visit was less than an hour.

          My current insurance has a $500 copay to visit the ER, but does not require meeting a deductible for that (deductible is required for specialists, surgeries, etc). A previou

      • Re: (Score:2)

        by labnet ( 457441 )

        The USA sounds like a corporate hell hole to live in.
        From lack of universal medical care , like in every other western country.
        to gun violence, homelessness, lack of worker rights (likes guaranteed annual holidays, at will employment), imperial measurements, taxes not included in advertised prices, poor consumer rights, crumbling infrastructure.
        Sounds like a 2nd world country now.

    • When I moved to Utah, I was alarmed and saddened by the state of healthcare.

      And you say that as someone coming from within America. Don't ever go to Europe and taste "socialism", you'll end up depressed in ways that your health insurance will not cover.

      • Re: (Score:1)

        by sfcat ( 872532 )

        My man, I have lived in both the US and Europe. The quality of life in Europe is far below the US. In fact, that's the thing I dislike about traveling to Europe for work, having to adjust to having a substantially lower standard of living. It is nice how cheap Europe is. However, it is a drag to not have the variety of food you have in the US and the taxes and regulations are beyond insane. And I have seen far more violence in Europe than the US even though I only lived in Europe for a brief time.

        It i

      • When I moved to Utah, I was alarmed and saddened by the state of healthcare.

        And you say that as someone coming from within America. Don't ever go to Europe and taste "socialism", you'll end up depressed in ways that your health insurance will not cover.

        I have experienced the socialist healthcare system of Brazil. I know it's not Europe, but it is an example from outside the USA. A son needed a medicine we can buy over the counter in the USA, but needs a prescription in Brazil. To see a free doctor had a wait time longer than our vacation, and to see a private practice was R$1000 (a month of minimum wage).

  • I recommend This guy [youtube.com]'s videos on the topic, it explains it very well.

  • And if you're not sure why it's bad... (Score:5, Interesting)

    by whitroth ( 9367 ) <whitroth@5-cen t . us> on Thursday July 13, 2023 @12:23PM (#63682865) Homepage

    The practice I went to for nine years started good. Then, an appointment I had was delayed by nearly an hour, as they had an all-hands meeting. That was followed by turnover among the support staff for years.

    For a long time, they had signs in the waiting room, "remember to bring all your concerns to your physician".

    The last couple years I was with them, that sign was not only gone... but when I went in for an annual physical, one year I was sent to another physician, another practice... and my primary care practice tried to bill me for *two* "interactions", one for the annual physical, and one for "finding something new" (which is the point of an annual physical).

    The year after I left them ('19) the practice dissolved. I'd been on the edge of calling the county attorney... because IMO that "two interactions" was the illegal practice of "unbundling" (this is /., you know how to look things up).

    H'ere's $1 that they'd been taken over by vulture capital.

  • Began recently a book detailing the issues with Private Equity. A significant source of their income is to take control (but in a way not actually own) and charge fees. Not only do costs go up, but regularly the product (for healthcare the quality of care) goes down. The fee charging smelled alot to me how the housing market collapse was fueled by selling bundled mortgages made money by the fees, not the ability of the loans to be paid

  • veterinarians too... NPR's Marketplace did a story on it.

    single payer is really the only solution to controlling medical costs. Hopefully we'll wake up to it eventually.. probably not in my lifetime.

  • I'm confused by this. Most patients are not "self-pay", so the cost of care is usually dictated by what insurance companies will pay, and not by free-market economics.

    It's true that larger companies are sometimes able to negotiate *slightly* higher reimbursement rates from insurance companies (when compared to small independent clinics), but the difference is not dramatic. So what's going on here?

  • Comically, Republicans were running about with their hair on fire opposing Obamacare on the grounds that it was some form of socialism, and the word "socialism" is a GREAT fundraising tool in the GOP, probably on the scale of political usefulness as the word "choice" for the DNC. Had John McCain not maintained a bitter feud with Trump and therefore strolled into the US Senate chamber and proudly thumbs-downed the repeal of Obamacare, we'd be in a different situation now with unknown counterfactuals, but mak

  • Real estate, rental units, whatever, Corporate America is the glory of the future, peons & you will like it.

  • Then tell us 2 data points. Great "reporting".

  • independent doctors (Score:3)

    by p51d007 ( 656414 ) on Thursday July 13, 2023 @05:48PM (#63683713)
    In my city, we have two big hospitals In the 90's, BOTH started gobbling up all the private doctors offices Now, even if you want to seek another doctor to see if the prices are lower/better you really can't because if you insurance is tagged to one of the two hospitals, no matter which doctor you see, they are probably billing the same.

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