Whether it’s for an annual check-up or to deal with a medical issue, we all want to believe that our healthcare providers are motivated only by a desire to help us reach our full potential.
But somebody is behind the scenes paying your doctor, right? So if we want to find out exactly what factors play a role in modern medicine, it’s important to find out who’s writing those checks.
The impact of private equity firms
Just like in many other sectors of the economy, a growing number of doctor’s offices are owned by private equity firms that invest in hopes of making a profit.
Here’s a brief rundown of the situation:
- In about one-fourth of local markets, these firms own more than 30% of all practices.
- That includes 13% of markets where more than half of the offices are under private equity control.
- The higher that percentage goes, the more insurers and patients pay for healthcare.
Across those markets where private equity firms control 30% or more of physician practices, the cost of gastroenterological, dermatological, and OB-GYN care is considerably higher than elsewhere.
How experts perceive the issue
As Laura Alexander of the Washington Center explained, doctor’s offices in only a select number of markets were being scoped up by these firms just a few short years ago.
Now, instead of small practices owned by the doctor, faceless entities are in control. It can make sense from a business standpoint and, if done correctly, can even improve the quality of care.
But these investors must be held accountable for their decisions … and that’s often not the case.
Health economics professor Richard Scheffler put it succinctly: “We’re seeing a fundamental change in how medicine is being practiced in the U.S.”