The study reached a number of conclusions about the impact of private equity, or PE.

PE acquisitions of physician practices are increasing. PE firms increasingly have been acquiring physician practices across a number of physician specialties since 2012, increasing from 75 deals in 2012 to 484 deals in 2021, or a more than sixfold increase in only 10 years.
PE firms are amassing high market shares in local physician practice markets. At the local level, individual PE firms are acquiring competitively significant shares of physician practice markets.
PE acquisitions are associated with price and expenditure increases. In 8 of the 10 physician practice specialties studied, statistically significant price increases were associated with PE's acquisition of a practice.
Price increases associated with PE acquisitions are exceptionally high where a PE firm controls a competitively significant share of the local market.
Increased attention to the competitive impacts of PE in physician markets is urgently needed. The vast majority of the PE acquisitions studied took place without federal antitrust scrutiny and with limited state antitrust scrutiny. The market share and price results reported indicate that more scrutiny of PE's impact on competition is warranted.
Changes to the Hart-Scott-Rodino requirements of federal antitrust law, reimbursement policies and tax policies are needed. At a minimum, federal antitrust reporting requirements must be adapted to modern business models, including PE, to ensure regulators have the information they need to evaluate the competition impacts of these deals.

Private equity's role in health care provider markets is an ongoing and evolving challenge, and there are no signs that PE's interest in health care markets is waning, the study found. Although the pandemic caused a temporary leveling off in overall PE investment, PE investments in physician practices have resumed their previous pace as the pandemic has abated. PE funds still are sitting on enormous stores of uninvested capital, physician practices have been financially and psychologically battered by the COVID-19 crisis and all of the incentives that drive providers away from independent practice and toward other ownership models persist.

Instant Insights /

'System on steroids': Study delves into impact of private equity on health care

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